OPINION: The Australian Public Service has demonstrated an ongoing interest in improving employee performance management, with several reports having been published over the past decade, most recently by the National Commission of Audit. However, despite much research and many processes being implemented, performance management has failed to deliver on its promises. Based on research undertaken in the APS between 2012 and 2014, this breakdown emerges from a disconnect between the espoused use of performance management as a tool to achieve strategic outcomes and its actual implementation within organisations. Three reasons are suggested for this: a lack of strategic focus, an assumption that performance management is really about underperformance only and a compliance approach to implementation.

An effective performance management system supports the attainment of organisational strategy by enabling individual, team and organisational alignment to outcomes, as well as ensuring employee accountability. Moreover, it an important tool as a lever for behavioural change; an individual's performance is the result of a series of activities over time; thus using periodic, ongoing reviews to give feedback and establish clear expectations should both encourage and shape future behaviours. Nevertheless, despite apparent awareness of (a) the importance of performance management per se and (b) its necessary links with strategy, most APS staff do not think that their performance review will help them to improve their performance.

One problem is the assumption that performance management means managing underperformance. This is demonstrated in the recent National Commission of Audit reports; despite claims that managing performance is a core management responsibility, where effective feedback will frame expectations and, consequently, employee behaviour in the phase one report, the phase two report is heavily focused on the problems with managing underperformance.

A similar emphasis emerged during the "strengthening the performance framework" project (joint research undertaken by the Public Service Commission and a team of academic researchers). Initially, there was a concern that, if the interview and research questions were focused on high performance, issues of underperformance would remain under-researched. However, this was not the case and underperformance emerged as the fifth-most discussed subject in this large-scale project. Within these conversations were stories of how hard it was to undertake underperformance processes, such that, if a manager had tried once, they would often says they would not do it again. Moreover, there were many examples of where performance management was seen by managers as merely as a control mechanism, checking up on agreed targets to prevent underperformance, rather than a tool to develop higher levels of performance. This control focus, plus a clear lack of interest in the process other than to manage underperformance, meant that any strategic orientation was often lost.
If performance management is to support strategy it will need to be seen to be core business; an ongoing process that enables an employee to understand their role, to be clear as to the purpose of their work and to encourage high performance levels in terms of both behaviours and output. However, participants in the research project suggested performance management was often perceived as a nuisance undertaken to be "compliant". Participants indicated that forms were seen as overly complicated, timings were sometimes problematic in terms of the planning cycle, and many managers would complain about the very existence of the system, thereby undermining the importance of the process. A series of emails would be sent out to remind managers and there would be a flurry of activity to make sure it was done so that managers could report that all their performance agreements were in place. This helps to explain the fact that 92 per cent of agencies report they undertake a process, but may also explain the lack of perceived usefulness of such agreements. When asked if there had been discussions as to what the performance management system needed to achieve, in terms of what changes or strategic outputs needed to be focused on that year, almost all the managers said no.

Where there was success, managers saw performance management as a tool to frame behaviour and develop high-quality output and outcomes in a strategic way. In these cases, they were not ignoring underperformance but, by using performance management as an ongoing practice aligned to their strategic goals, they were often preventing problems from occurring in the first place.

For performance management to be able to make a real difference to the long-term outcomes of public sector organisations, it must return to its strategic roots and be positioned as a tool designed for the particular needs of the organisation at a given time in a specified context. The first stage for performance management implementation necessitates determining what its outcome goals need to be over a period of time: one year, five years and so on. This provides senior leaders with the opportunity to discuss the purpose of the performance system itself and then set up briefings to explain to all those who actually undertake the performance reviews, what is required to reach these goals.

This process has two outcomes: first, it ensures that all involved understand the strategic relevance of performance management and, second, it signals the importance of the system because it is being led by senior leaders and not the corporate officers. Recognising the need for changes to the way in which they implement performance management, some agencies are already changing the nomenclature to focus on development and others are repositioning to stress the centrality of the conversation. However, these amendments alone cannot overcome the current problems; both the conversation and development need to reflect on the strategic needs or they risk being more window dressing. There will still need to be a decision as to the purpose of the process, or little will really change.

This is why a focus on high performance is advocated in the first instance; by determining the ideal outcome there can then be an identification of the skills, capabilities and behaviours necessary for the emergence of a high-performance culture, as well as providing a clearly articulated strategy for the effective management of underperformance. This will address the problem that, despite widespread acceptance that having a performance management system is important and that everyone needs one, the real reasons for undertaking it appear to have been lost over time. The required output has become the existence of performance agreements, rather than behaviours and output designed to achieve strategic goals.

However, I suggest that, as with many underperforming employees, it could be turned around. To perform well, an individual needs to know not only what to do, but why it matters – the context can, in some cases, provide the difference between an acceptable output and a potentially great one. Performance management has been allowed to turn into an often annoying and unhelpful yearly cycle with no one aligning it to strategy. It needs to regain a purpose before it is too late.

Deborah Blackman is a professor in public sector management strategy at UNSW Canberra.

This opinion piece from The Canberra Times is an edited extract from an article in the Australian Journal of Public Administration.