Should managing performance be stressful?

Edge Legal

15 May 2023

In rejecting an employee’s claim for psychological injury from a reasonable performance assessment process, a recent Administrative Appeals Tribunal decision (Tierney and Comcare (Compensation) [2023] AATA 674 (5 April 2023) has highlighted that managing employee performance, when conducted appropriately, will provide Employers a solid defence to workers compensation claims. 

Although slightly different across jurisdictions, Workers Compensation Acts generally provide a defence to claims if the employer is taking management action reasonably.  This is usually the critical factor where a stress claim or other psychological injury allegedly arises from performance management process.

The Member in determining whether the administrative action was reasonable, said she could think of a "no more fundamental legitimate human resource management action than an assessment of an employee's performance".  She then went on to find that, even though the assessment was stressful, it didn’t make the process unreasonable.  

Whilst that confirmation will provide comfort to employers, should a performance management process really be stressful for both the manager and the recipient?  We certainly don’t think so but understand that managers often ‘armour up’ to prepare for conducting legitimate and necessary performance assessments and some employees genuinely dread any type of performance management whatsoever. 

So how do employers take the stress out of the performance management process?


  1. Dispense with formulaic performance appraisal systems;

  2. Reset expectations that focus on performance feedback as a gift not a punishment;

  3. Train your managers/employees how to give/ receive regular performance feedback;

  4. Regularly meet (weekly/ fortnightly) and discuss performance (high and poor);

  5. Keep accurate but informal records

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