Evolution Of Performance Management System

The evolution of performance management system design over recent decades has not been a straight line.

Annual appraisal with a numeric rating was standard for a long time. Criticism accumulated, largely that it consumed enormous effort and changed very little, and a number of large organisations removed ratings entirely in favour of continuous conversations.

Several later reinstated some form of rating. The reason was practical rather than ideological. Without a rating, pay and promotion decisions still had to be made, and they were being made informally, invisibly and less consistently than before.

The durable lesson is that removing the artefact does not remove the decision. If you take ratings out, you need to say explicitly how pay decisions will now be made and evidenced.

The Fair Work Commission considers how decisions were reached. This is general information rather than legal advice, and obligations vary by state and territory.

See Sentrient’s performance management system and performance review software.