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Is Performance Management Really Broken?

In their March 2014 paper titled ‘Performance Management is Broken’, Deloitte Touche Tohmatsu(1) reported that the ranking and ratings-based approach to performance management was damaging employee engagement and alienating high performers. Only 8% of companies cited in the report claimed that their performance management process created high levels of value. Disturbingly, 58% of companies said it was not an effective use of time.

 The Deloitte paper highlighted that organisations globally were replacing the rigid rating systems of performance management with coaching and development, rather than competitive annual evaluation and ranking systems.

“Employee retention and workforce capability are significant indicators of business success, the performance management process should focus on continuous coaching and development, rather than competitive evaluation. Managers who provide regular feedback and opportunities to improve are far more likely to field high-performing teams than those who retain once-a-year rankings.”

Performance management is not ‘broken’ but merely has lost relevance in its format and needs to be approached differently. It is more appropriate now to engage your employees in conversations and gain their buy-in and accountability through trust and respect.

At People Insights Group, we recognized this cultural shift early on. Having led high-performing innovation organisations and teams for twenty years, we’ve developed skills that recognise the factors that contribute to some individuals becoming high-performers, whilst others struggle. One of the keys as a leader is to develop coaching, listening and conversation skills to take all of your people and teams on the high-performance journey.

It is logical therefore to apply new methodologies and technology to performance management. At People Insights Group, we are focused on helping organisations to achieve cultural shifts, and to help leaders and individuals to develop and grow, in order to improve business performance.

Our innovative cloud-based PeopleInsightsTM online performance management solution is designed to help organisations achieve cultural shifts through ensuring that meaningful performance-based conversations based on trust, personal promises and development actually occur.

We help organisations to improve their leaders and managers’ abilities to coach, and to align their employees’ performance with strategic goals through developing a consistent definition of performance, and to manage contributions through collaborative performance-based conversations designed to ensure employees provide the greatest impact on an organisation’s success.


Performance management is not broken altogether, but needs significant transformational change.

About Gary Morgan

Gary Morgan, is Founder and CEO at People Insights Group, Managing Director at MPT Innovation Group and Adjunct Professor at Queensland University of Technology.

People Insights