In part two of this video series, the panel responds to the escalating performance management challenge, providing useful insight into how HR can balance the board’s commercial priorities with psychosocial safety.
In the second instalment of AHRI’s video series, The Game Plan, HR leaders Katriina Tähkä, Anoop Chaudhuri FCPHR and Christina King FCPHR return to continue tackling the performance framework dilemma introduced in Part 1 as the stakes get considerably higher.
Host Dora Peake FCPHR, Chief People Officer and member of the AHRI Victorian Council, picks up the scenario where it left off, guiding the panel through two more confronting phases: a boardroom standoff with the CEO and finance director and a sobering realisation six months down the track.
The scenario so far
An organisation’s refreshed performance framework has successfully ended rating inflation and introduced sharper differentiation between high- and low-performers. But a culture gap has emerged: managers, particularly first-time leaders, are paralysed by psychosocial safety concerns, defaulting to vague feedback that leaves employees confused and disengaged.
If you haven’t watched Part 1, we recommend watching it here first.
Now, the challenge escalates. Watch Part 2 below:
Phase 3: The executive dilemma
The panel is placed in a meeting with the CEO and finance director.
Finance wants to leverage the lower ratings to justify a smaller bonus pool. The CEO is unmoved: discomfort, in their view, is simply the price of high standards, and if people feel unsafe, that’s a performance issue, not a culture one.
How do you reframe this conversation?
Anoop Chaudhuri FCPHR: One of the things I would do is reframe the conversation into what is the commercial impact and the commercial outcome of this change. The conversation I want to have with the CEO and the finance director is: how might we look at this from a commercial lens and decouple this component, so that we can understand what’s the change?
I would approach the CEO one-on-one and have a conversation. and then go back and use a data-driven approach to have a commercial conversation about the change that we wanted to have.
Christina King FCPHR: For me, it’s really about talking the language of the CEO and the finance director, and demonstrating it as we go right to the bottom line in dollar terms, helping them understand what is the dollar value of improved culture in the organisation.
Perhaps giving some insights around what are the risks to the organisation, to the CEO as an officer of that organisation, around what it could look like if the business does not uphold a safe environment… everyone talks, particularly in Australia, being a fairly small work landscape, and we all know that if you’re splashed on the front page of a major newspaper, that is fodder for weeks to come.
Phase 4: The caution plateau
Six months on, the framework has delivered. Rating inflation is gone and the business has achieved strong fiscal discipline in remuneration spend. But the executive team has noticed something troubling which they’re terming a caution plateau.
People are meeting the new higher standards, but they’ve stopped taking the creative risks that fuel competitive advantage.
The performance framework has, unintentionally, bred a culture of fear. How would an HR leader go about addressing this?
Katriina Tähkä: It seems we think that there’s been some cost benefits, but what we’re hearing is that there’s human costs… I would straight away be looking at those managers that we’ve talked about along the way, and saying, what additional capability investment do we need to put into them to give them the confidence to break out of this cycle?
We’re going to have to think about the bigger picture, and what else do we need to communicate about why we did this in the first place. We didn’t do it just to save money. It was actually intended to elevate high performance and it was actually intended to build accountability for that elevation.
Anoop Chaudhuri FCPHR: If this is the end outcome, then if I was a CEO, I would be very concerned, because innovation and creativity is a lifeblood of any organisation around commercialisation of products, looking at new features and services.
Christina King FCPHR: If this business is wanting to breed a large group of high performers, then typically we would probably expect to be paying more to significant performers… are we in fact attracting those high performers and retaining them with that discipline on [remuneration] spend?
How can we get our ELT to really see that we have a way out of this caution plateau and perhaps that could be, on a practical level, engaging an external person to come in to present or workshop with the ELT around what is the value of innovation… [or] what is the cost for the organisation of continuing not to innovate?
That’s all for this episode of The Game Plan, but keep an eye out for more episodes, coming soon. Subscribe to AHRI’s YouTube channel so you never miss a future episode.
🧰 HR’s career resource kit
Turn the learnings from this video into action:
- Learning: Learn how to manage the complex landscape of psychosocial wellbeing in the workplace with this course from AHRI.
- Learning: Learn how to create the best environment for optimal performance with this course from AHRI.
- Support: Become an AHRI member for access to Ask AHRI where you can receive expert HR guidance for challenging workplace issues.
- Connect: Follow Dora Peake FCPHR, Anoop Chaudhuri FCPHR, Christina King FCPHR and Katriina Tähkä for more insights into their work.
