Why is performance management thinking stuck in the past?


Being agile, manoeuvrable, and flexible are success factors for the modern high performing company.

Agility – more than ever – is the driver of organisational performance and the keystone of performance management. It can be defined as the ability to be continually proactive, to assess the limits (or indeed, risks), of existing approaches. Agility is about ensuring that employees have a change-ready mindset to enable them – and ultimately the organisation – to keep moving, changing, adapting.

Research suggests a link between an agile enterprise and its performance management practices. The top traits of such a business can include a high-performance culture, flexibility in management practices and resource allocation, organisational structures supporting collaboration, and rapid decision-making and execution.

Out with the old, in with the old

What’s commonly referred to as Taylorism or scientific management, began over 100 years ago on the factory assembly lines of several businesses, including the Ford Motor Company. Taylor’s philosophy was very successful at yielding high profit margins.  Though work itself has radically transformed from the factory assembly lines of the early 20th century the older management philosophy is still ubiquitous.

What’s more, it is deeply embedded in the psyche of modern management. Even though the work people do today is unrecognisable from the factory work of the early 20th century, management as a profession remains ultra-conservative.

Taylorism continues to have a profound and ongoing influence on the traditional employment relationship. Performance management practices with a foundation in scientific management—such as specialisation and constructing work around jobs—have buttressed the conventional working relationship between management and workers and held businesses back from developing the nimbleness required to succeed.

First steps first

Changing well-entrenched performance management practices is ultimately futile without a fresh psychological contract between employer and employee – because otherwise these new practices will be unsustainable. So the challenge is transforming organisational culture, based on a different set of expectations for the role of manager and employee.

Performance, learning and culture go together. Speed and agility are hamstrung in a workplace culture based on the traditional employment relationship of “them and us”, where managers do the thinking and workers do the doing.

Simplicity is one of the primary attractions of “them and us” but this relationship is too basic to be effective in a climate of accelerated change and uncertainty. The springboard for agile performance is a new, more collaborative psychological contract.

If we continue to believe people are the competitive or adaptive advantage in business, we need to reflect on the assumptions we have about performance. Scrutinising how performance is managed is necessary, particularly now, when many of the time-honoured systems are asphyxiating the capacity to work with agility.

Dr Tim Baker is author of Performance Management for Agile Organizations: Overthrowing the Eight Management Myths That Hold Businesses Back.

Image Credit: Walt Disney Productions

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Max Underhill
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Max Underhill

Tim interesting article and I guess I agree with your “Out with the old, in with the old”. It is interesting that the Productivity Commission study on executive remuneration after the GFC commented that HR could be a science but the issue was the lack of willingness to apply this science. Modern performance management systems are developed from the strategic direction, consist of quantitative measures but involve and empower the employees whether the CEO or the delivery driver. The technologies and ability to measure and provide feedback has changed a little over the “100 years”. With the right definition of… Read more »

Tim Baker
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Tim Baker

Thanks Max.

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Why is performance management thinking stuck in the past?


Being agile, manoeuvrable, and flexible are success factors for the modern high performing company.

Agility – more than ever – is the driver of organisational performance and the keystone of performance management. It can be defined as the ability to be continually proactive, to assess the limits (or indeed, risks), of existing approaches. Agility is about ensuring that employees have a change-ready mindset to enable them – and ultimately the organisation – to keep moving, changing, adapting.

Research suggests a link between an agile enterprise and its performance management practices. The top traits of such a business can include a high-performance culture, flexibility in management practices and resource allocation, organisational structures supporting collaboration, and rapid decision-making and execution.

Out with the old, in with the old

What’s commonly referred to as Taylorism or scientific management, began over 100 years ago on the factory assembly lines of several businesses, including the Ford Motor Company. Taylor’s philosophy was very successful at yielding high profit margins.  Though work itself has radically transformed from the factory assembly lines of the early 20th century the older management philosophy is still ubiquitous.

What’s more, it is deeply embedded in the psyche of modern management. Even though the work people do today is unrecognisable from the factory work of the early 20th century, management as a profession remains ultra-conservative.

Taylorism continues to have a profound and ongoing influence on the traditional employment relationship. Performance management practices with a foundation in scientific management—such as specialisation and constructing work around jobs—have buttressed the conventional working relationship between management and workers and held businesses back from developing the nimbleness required to succeed.

First steps first

Changing well-entrenched performance management practices is ultimately futile without a fresh psychological contract between employer and employee – because otherwise these new practices will be unsustainable. So the challenge is transforming organisational culture, based on a different set of expectations for the role of manager and employee.

Performance, learning and culture go together. Speed and agility are hamstrung in a workplace culture based on the traditional employment relationship of “them and us”, where managers do the thinking and workers do the doing.

Simplicity is one of the primary attractions of “them and us” but this relationship is too basic to be effective in a climate of accelerated change and uncertainty. The springboard for agile performance is a new, more collaborative psychological contract.

If we continue to believe people are the competitive or adaptive advantage in business, we need to reflect on the assumptions we have about performance. Scrutinising how performance is managed is necessary, particularly now, when many of the time-honoured systems are asphyxiating the capacity to work with agility.

Dr Tim Baker is author of Performance Management for Agile Organizations: Overthrowing the Eight Management Myths That Hold Businesses Back.

Image Credit: Walt Disney Productions

2
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Max Underhill
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Max Underhill

Tim interesting article and I guess I agree with your “Out with the old, in with the old”. It is interesting that the Productivity Commission study on executive remuneration after the GFC commented that HR could be a science but the issue was the lack of willingness to apply this science. Modern performance management systems are developed from the strategic direction, consist of quantitative measures but involve and empower the employees whether the CEO or the delivery driver. The technologies and ability to measure and provide feedback has changed a little over the “100 years”. With the right definition of… Read more »

Tim Baker
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Tim Baker

Thanks Max.

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