What are the new directions in performance management?

With new technology and different generational aspirations in New Zealand businesses our performance management processes need to adapt and reflect the changes, writes John McGill.


How comprehensive are your performance management structures? As a fundamental part of any successful organisation, performance management is key to ensuring that employees understand their obligations and role within the business. However, this is one aspect that New Zealand enterprises have struggled with over the last few decades.

Performance management can be difficult for organisations in New Zealand – as traditionally many businesses didn’t have a function of assessment. It’s not something that we, as a society, gravitate to in terms of giving negative feedback in a positive way.

Essentially, New Zealanders find it easy to say positive things, but to manage people effectively, you need to be able to critique all levels of performance.

Inevitably, managers need to give effective messages to people about aspects of their performance or behaviour and how this relates to remuneration and rewards.


Technological influences

Over the last decade or so, automated technology has allowed businesses to undertake better performance management structures. However, even this has caused problems for many organisations.

Two years ago, there was a global reaction to performance management technology – it was too impersonal. It wasn’t just in New Zealand, but around the world.

Going into a computer system and ticking some boxes without people talking to each other was deemed an ineffective way to manage people. 

Businesses like Deloitte highlighted the issues and largely moved on from ranking scales and put emphasis on regular managers/employee meetings.

The idea was that these were conversations rather than one party giving another party a monologue.

As such, the ideal model for performance management has been forced to refocus on the person-to-person relationship where trust and communication will lead to better results for both parties. There is no substitute for transparency combined with the regularity of good conversations.

Perhaps all this should not come as a surprise to us. Technology is a tremendous enabler and game changer and our recent experience gives it a real role in performance management processes but it is by no means the only part of the process, something we were in danger of forgetting.

At Strategic Pay, we are following this debate internationally and engaging within our local communities to design the best performance management systems across various markets.


John McGill is the CEO at Strategic Pay. 

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