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Australia – Hays: Broader performance management needed

30 May 2013

Managing performance in today’s business world requires a broader approach, according to recruitment firm Hays, which found that many companies think it is too hard or expensive to invest in the performance of their workforce as a whole.

Instead, they choose to focus on a small group of employees they label their high achievers, but this approach could limit organisations. The latest Hays Journal examines the traditional model of performance management and takes a look at some of the organisations taking a more innovative approach.

Dangers posed to an organisation by the traditional model include:

  • The difficulties of defining “top performance”.
  • Having a top tier that actively works to block the performance of others to maintain their position.
  • Setting stretch goals that are easy for the top tier to meet but near impossible for the mid-tier to meet.
  • Otherwise strong employees deliberately underperforming to avoid being set ever-harder goals.
  • Not safeguarding against a system that rewards an elite even when they deploy destructive behaviours to reach the top.

“We have seen a great deal of investment in talent management by organisations since performance management was introduced in the 1970s but the model of focusing on a small group of employees has stayed pretty much the norm,” said Nick Deligiannis, Managing Director of Hays in Australia and New Zealand.

“In today’s increasingly complex business environment some organisations are now challenging the narrow focus of the past. Innovative approaches include using a model of ‘continuous’ performance measurement rather than an annual review; measuring ‘capability’ rather than ‘potential’ and benchmarking staff performance in terms of work relationships,” he said.

“There are also organisations that believe investing in the larger group of average worker provides better returns than investing only in a small group of top performers,” he says. “This sort of innovative thinking is how these organisations stay ahead of the pack.”

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