A Growing Psychosocial Risk in Australian Workplaces?
Over the past year, I’ve noticed a sharp increase in psychosocial complaints where the underlying issue isn’t harassment or interpersonal conflict, it’s performance management gone wrong.
At Worklogic, we often see cases where what started as a genuine attempt to manage underperformance has escalated into a complaint of bullying, stress, or psychological injury. In many of these cases, the issue isn’t that performance management took place, it’s how it was done.
The Shift in the Landscape
With the introduction of psychosocial risk regulations under the WHS framework, the bar for what constitutes a safe system of work has changed. Employers now have a positive duty to identify, assess, and control psychosocial hazards and this includes ensuring performance management is handled in a way that doesn’t increase a risk of harm.
Unfortunately, we also see an increasing perception that managers feel they’re “not allowed” to address poor performance for fear of a complaint, while employees may perceive legitimate management action as bullying — particularly if communication is poor, expectations are unclear, or emotions and stress are a factor.
Why Performance Management Becomes a Psychosocial Risk
In investigations, I often see three recurring themes:
Process gaps: There’s no documented feedback or the performance improvement plan lacks substance. Feedback is inconsistent and often times degrading or poor performance has not been addressed in a consistent and systematic manner in the early stages. In severe situations, performance management is being used to ‘push’ the employee.
Conversational tone: No one likes giving negative feedback and no one likes receiving it. The way in which the feedback is delivered is crucial and often it is not what is being said, it’s the way it’s being said that has led to a complaint being made. Allowing unmanaged emotion, frustration, sarcasm and defensiveness to creep into these difficult conversations increases a risk that something said will be misinterpreted or interpreted for what it was–poor communication.
Perceived unfairness: The employee believes they’re being singled out or that expectations shifted without notice. I see this generally where one standard is being held out for one while not the other. Or in other cases, expectations are not properly articulated or understood and then used as an assessment of performance.
Even where management action is reasonable, perception plays a powerful role in how employees experience the process and then how that informs any complaint they might make.
Three Ways to Reduce the Risk
Focus on communication, not confrontation
Performance management should feel like a constructive dialogue. Keep the discussion about facts and observable behaviours, not personality. Clear, neutral language helps reduce defensiveness and shows objectivity.
Use a consistent, transparent process
Psychosocial risk increases when the process looks arbitrary. Make sure all managers follow a consistent framework for addressing performance issues — from documenting concerns (early and throughout) to setting measurable and realistic improvement goals. This transparency helps employees understand that they’re being treated fairly, not singled out. Provide them support to achieve the goals.
Train and support managers before they act
Managers are often promoted because they’re technically good, not because they’re skilled at handling difficult conversations. Before any formal performance management begins, equip them with tools to manage conflict and performance, regulate tone, and respond empathetically to situations like these. Doing so protects both the employee’s wellbeing and the manager’s confidence; and reduces risk.
The Takeaway
Performance management isn’t the problem — poorly executed performance management is. When handled thoughtfully, it can improve culture, productivity, and trust. When mishandled, it becomes one of the most common triggers for psychosocial risk claims.
At Worklogic, we help organisations identify and manage psychosocial risks through practical solutions — from reviewing performance management processes and training leaders, to investigating complaints when things go wrong. Our purpose is to help you build confidence when handling people issues while also ensuring a safe place to work and reducing risk.