Formal performance reviews lacking in many Australian sectors

New data shows that fewer than two in five Australian employees say their organisation uses a formal and consistent performance management process, with significant differences across industry sectors.

According to research from ELMO Software based on responses from more than 1,000 Australian employees surveyed by YouGov, only 38% reported that their workplace has a consistent, formal review process with clear criteria and regular feedback. The findings highlight notable variation between industries, with healthcare and education sectors each seeing 46% of respondents confirming the existence of formal processes, compared with just 11% in retail and 17% in hospitality.

Pressure on retail and hospitality

The disparity in performance management practices means some Australian industries lag far behind others in the use of structured review systems. Among retail staff, just over one in ten (11%) say there is a formal, consistent process, while in hospitality the figure is 17%. This contrasts sharply with the higher rates seen in healthcare and education.

The research, conducted during the period from April to June 2025 and tracked in the ELMO Employee Sentiment Index, presents an uneven picture nationwide. Three in ten (29%) employees described their workplace process as only partly structured, with guidelines applied inconsistently. Another 15% said their workplace deals with performance management in a mostly informal way, depending on ad-hoc conversations and limited documentation.

Additionally, more than one in ten (9%) said their organisation has no formal performance process at all, while 8% were unsure if such a process exists where they work.

Transparency perceptions

Despite inconsistencies in processes, more than seven in ten respondents (72%) believe their performance is assessed using transparent and fair criteria, though only 27% strongly agree. This gap suggests that while many workers feel assessments are broadly fair, a clear and reliable structure is often lacking.

"It's encouraging that so many employees feel their performance is judged fairly, but when structures are patchy, trust can erode," said ELMO CEO, Joseph Lyons. "Our own data shows every single ELMO employee has completed a structured performance review process in the past year; not just because we have the right tech, but because our leaders recognise the value it brings."

Recurring feedback issues

The study also reveals shortcomings in how effectively feedback is provided to staff. Only 42% of employees said they receive helpful, constructive feedback often enough to support improvement and motivation. Meanwhile, 18% reported they rarely receive useful feedback, with a further 35% saying they only receive it occasionally.

The survey identifies generational differences in feedback experiences. Just 12% of Gen Z and 16% of Millennials said they rarely or never receive helpful feedback. This contrasts with 24% of Gen X and 29% of Baby Boomers, who said useful feedback is lacking.

"Our workplaces are more age-diverse than ever, bringing opportunities for diverse thinking and innovation," Lyons said. "But that potential is realised only if people feel supported through clear feedback cycles and recognition. Strong processes are a great start, but leaders must tailor their approach to make feedback impactful."

Impact on productivity and engagement

The survey results suggest employee engagement remains high: four in five (81%) say their work goals and expectations are clear, and three quarters (76%) report feeling motivated in their current roles. However, the identified gaps in performance management reinforce the challenges facing organisations seeking to boost productivity.

Data from ELMO's 2025 HR Industry Benchmark Report indicates that increasing productivity is the main priority for HR leaders this year. A lack of clarity around performance goals and assessment criteria emerged as the most significant barrier to achieving this aim.

Role of technology and human connection

Joseph Lyons sees a combined role for technology and personal leadership in addressing the identified problems.

"As we move rapidly into an AI-powered world, efficiency gains will continue, but they're only part of the story," he said. "AI can unlock people insights, giving leaders the space to focus on constructive conversations, engagement, and recognition. The organisations that balance technology and human connection will set themselves apart."

The ELMO Employee Sentiment Index serves as a quarterly pulse on the Australian workforce, tracking how employees perceive job security, wellbeing, and organisational processes across a range of industries.