This chapter identifies the relevant challenges associated with each of the factors in the model. It examines the model of performance appraisal (PA) and performance management (PM) proposed by K. R. Murphy and A. S. Denisi provides the context for our analysis of the major features of the Australian PM system. In the 1950s, manufacturing activities increased to account for about one-third of gross domestic product, moving Australia to a degree of industrialization comparable to the United States and Canada. The changes in the Australian economy in the 1980s made it clear that the future success of organizations depended more than ever on the quality of the management of people. The chapter reviews the major proximal factors for PM that are of concern for researchers and practitioners in Australia. Research by C. Sheehan et al. also indicates widespread uptake of PM in Australian organizations.