How is Australian management really performing?
There’s a lot of good reasons to do a 360 performance review. One of the most critical is to make sure you’re getting an accurate picture of the real situation (and not just one person’s view).
It’s common sense that any performance review that’s only based on one viewpoint has the potential to go badly wrong. (if you’re interested, we touch on the other reasons you should be using 360 reviews in our detailed guide to 360 performance reviews).
As we saw in our recent look at the state of middle management, it’s very possible for two groups of people to have a very different take on performance. To recap:
- When you ask middle managers how they are performing, only 27% think middle management is underperforming.
- However, when you ask senior managers, 64% rate the skills of middle management as “below average”.
This finding got us interested about whether there was such disagreement about the broader performance of Australian management.
A broader look at the performance of Australian management.
To get a 360 view of Australian management, we went looking for data from the top, the middle and the front line. One of the best resources we found comes from the Australian Institute of Management (AIM). AIM have been publishing an annual management capability index since 2012. To compile this capability index, AIM asks managers from 420 different companies to rate their organisation’s management performance (“how well is the organisation performing vs. the capability of management”).
To get a comprehensive review, we’ve integrated this data with Glassdoor for front-line employees. There’s more detail on the methodology and logic below.
Without further ado, here’s our 360 review on Australian management:
The view from the top: The CEO perspective on Australian management.
AIM’s Management Capability Index (AMCI for short) shows that the average CEO thinks their organisation is operating at 72% of management potential. This is a concerning figure from the leader of the organisation (who is ultimately responsible for the performance of management). On average, CEOs are saying that their management team is leaving nearly 30% of potential performance on the table! It’s a major performance gap!
If you have some time (and you’re a HR nerd like me), the underlying data makes for fascinating reading. It reveals that CEOs think that Australian management are worst at “Results and Comparative Performance” (68%) with “Visionary and Strategic Leadership” also performing poorly at just under 70%.
The view from the middle: What do senior managers and middle managers think about Australian management?
Ratings of management performance continue to fall as we move down the hierarchy. The AMCI shows that Level 2 and 3 managers feel their organisations are only operating at 65% and 58% of management potential respectively.
These ratings are a strong criticism of overall management performance. In plain English, level three managers are saying that they think their company’s management team are capable of performing at almost twice current output!
Again, this isn’t a uniform picture across the board. Every level of management picks different management weaknesses:
- Level 2 managers are particularly critical of management performance on “Organisational Capability” (57%) and “Innovation” (just under 60%).
- Level 3 managers are significantly more critical of management performance on “People Leadership” (just 50%) and “Application of Technology” (again 50%).
The view from the frontline: Employees’ thoughts on Australian management via Glassdoor.
The thoughts of employees are not far removed from the management capability index. We’re using Glassdoor as a proxy for how front-line employees think management is performing.
On Glassdoor, employees are asked to give the company and management a rating out of five. For the ASX 100, the average rating is 3.09 out of 5. On a percentage basis, that converts to just under 62%. For comparison, 62% sits comfortably between level 2 and level 3 managers.
(Obviously we’re making a few assumptions here around Glassdoor. Primarily, that reviews are most likely to come from frontline employees. And although Glassdoor isn’t specifically reviewing management capability, the numbers are closely in line with the AMCI. On this point, we think it’s not hard to believe that on both the AMCI and Glassdoor ratings are reflecting the broader gap all employees experience (to some degree) between expectation and reality in organisational performance.)
What does it all mean? The key takeaways
For me, this data points to four interesting takeaways to think further about:
- Everyone agrees that there’s a massive gap between Australian management’s potential and what’s actually being achieved right now. This is a major national problem and productivity issue.
- CEOs think that management is doing better than anyone else in the organisation. It appears that there’s a real communications failure from Australian CEOs in making sure the rest of the organisation shares their (relative) optimism around the current performance of the organisation and management team.
- Middle managers are a major problem area for Australian organisations (whichever way we look at it, as we showed in this previous article). The data here shows that middle management is increasingly jaded about the broader performance of management and leadership.
- And finally, an interesting takeaway with much broader implications: Glassdoor looks to be a surprisingly good proxy for management capability.
How do these results stack up with your management experience? Any key takeaways that you think I’ve missed from the data? Jump on the comments or reach me at @cognology on Twitter.