Performance Management - Office of Industrial Relations

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Managing Performance
What is performance management?
Performance management is a process that
allows an employer to deal with situations of poor
performance, behaviour, conduct or capacity that
impact on the organisation and the employee’s
ability to perform their purpose.
The process includes activities such as defining
work, setting goals, providing feedback and
encouraging development.
Performance management is about shared
responsibility and understanding of roles,
expectations and standards.
Why is performance management
important?
It is an opportunity that allows the organisation to
bring the employee back to the standards required
by focussing on issues that affect the performance
of the employee and colleagues.
effective and the employees should be aware of
and understand all aspects of the process.
What is the issue – performance or conduct?
It is important to understand what the issue actually
is – don’t forget that performance issues are very
different to conduct issues and there may need
to be a different process that is used to manage
different situations.
As an example – a performance issue would be an
employee who is working below the acceptable
standards under an employee’s job description or
performance and development plan.
Where as an employee who has unsatisfactory
conduct there would be significant or on going
difficulties with an employee’s conduct or behaviour
that is not consistent with the code of conduct,
policy, procedure or other instruction – and requires
immediate attention and resolution.
For many organisations, the thought of speaking
to an employee about an issue that arises can be
distressing. Many times, the issue will be ignored
with the thought that “the matter will fix itself”.
This is not always the case.
Stage 1 – Informal Preliminary Discussion
A matter that is not resolved can go on to be a
huge burden with regards to time and resources.
A performance management process will ensure
that all employees are working to the same end
result; the employees will know what is expected
of them, and what the process will be if their
performance falls below what is expected.
Allow the employee to provide their input in to the
issues, raise any concerns and discuss any relevant
options or solutions.
How do I performance manage my
employees?
There are no hard and fast rules that must be applied
when it comes to performance management,
however any process should allow for procedural
fairness and natural justice. Best practice tips
should be used to make the process simple, fair and
Any concern regarding an employee’s performance
should be addressed informally at an early stage to
avoid the situation escalating.
Choose a private and non–threatening place to
meet with the employee that is removed from any
distractions and interruptions.
It may also be advisable to offer the employee the
option of bringing a support person with them –
particularly if the issue is quite serious. A support
person may offer some comfort to the employee.
Always check the applicable industrial instrument,
the employee’s contract of employment and the
employer’s policies to ensure that any provisions
concerning performance management are met.
Clearly indicate what the issue/concerns are about,
whether it is about work underperformance or
inappropriate behaviour.
Explore the reasons for the performance/conduct
issue with the employee.
Allow the employee to discuss any issues that may
be affecting their performance, and consider their
response, but keep the discussion focused on the
actual issue of why the employee is having difficulty.
Always approach the discussion in a non judgemental
way, ask simple questions about whether there is
anything affecting the employee’s performance.
Consider and agree on:
• Inform the employee that their performance is still
unsatisfactory and determine an appropriate PIP.
A PIP may include:
• The clarification of role requirements and
expectations
• An undertaking by the employee to increase their
commitment to the performance of their duties
• On or off the job training to develop skills and
abilities
• The use of professional counselling services
• The use of a mentor
• Mediation services
• Any further assessment or information that may
be required
Stage 3 – Performance Improvement Period
• Any further resources necessary to manage a
health issue
Regular meetings should be scheduled to assess
and monitor the employee’s performance.
• Any reasonable adjustments and how these
might be implemented
The manager should provide regular feedback to
the employee regarding their performance.
• Explain and be clear regarding behaviour
expectations, including timeframes for
improvement
The employee should be offered support and
assistance (e.g. training or an employee
assistance program).
• Make arrangements for a review process
Stage 4 – Evaluation
• Document all discussions
• It is important that (if required) the employee
receive a formal written warning as a part of
the process and that this warning indicates
the move to stage 2 of the procedure, and
that there is a possibility that the employee –
without improvement, may be terminated.
Continue to monitor the performance of the
employee.
Stage 2 – Initiating the Performance
Improvement Plan
Where the employee’s conduct/performance has
not improved, initiate a performance improvement
plan (PIP).
Employer and employee will need to meet to
develop a PIP:
• Identify the standard of performance or
conduct required
At the end of the performance improvement period,
the manager and the employee should meet to
discuss whether the employee has successfully
completed the process.
If not, clear and concise reasons should be given to
the employee as to why there are on going issues.
A decision should then be made as to what
disciplinary action should be taken. This may include
further warnings or termination. If there has been
significant and sustained improvement this should
also be acknowledged.
Have a policy regarding performance
management!
It is an idea for each organisation to have a
reasonable policy or a procedure that is followed
for this process. All employees must not simply
know that the policy exists, but they must
understand the policy.
Any employee who will be in charge of performing
these reviews should also be well versed with
regards to best practice and the performance
management policies within the organisation.
Follow polices and procedures!
Once a policy is approved by the Board, it is
important that the policy is followed properly.
Many employers find themselves having issues
because the employer and or the board have not
followed their own policies and procedures.
Should I wait for the scheduled
performance reviews?
If an issue occurs before a scheduled performance
review, don’t wait – address the situation as soon
as possible. Always be aware that poor performance
or conduct of one employee can affect all employees
in your organisation.
What about termination of employment?
Termination of employment should always be a
last resort!
Before deciding to terminate ensure that:
• that there is a genuine issue that warrants a
termination in the circumstances
• Make sure that any performance management
and other relevant polices have been followed
• Refer to the appropriate modern award or
enterprise agreement – make sure these have
been complied with
• that appropriate warnings have been given and
that the warnings have been properly documented
• that procedural fairness have been given to the
employee – such as notice of meetings and
the offer of a support person and giving the
employee an opportunity to respond
What are the key elements of a
performance review?
• Give consideration to and take in to account
the employee’s response, length of service,
performance history and personal circumstances
• Be proactive and preventative
• Process needs to start from the outset;
• If necessary, seek legal advice in difficult
situations
• Develop detailed performance standards for
each position
If the decision is made to terminate an
employee...
• Recruit for performance and culture – always do
reference checks
• Provide a clear reason for termination, give the
correct notice (or payment in lieu of notice),
and pay all entitlements as per award/
agreement/contract and NES (National
Employment Standards)
• Clear communication of the acceptable standards
to all employees
• Make this a two-way process – make employees
aware of the standards and assist employees to
achieve them
• Make sure that managers etc are well trained and
are able to deal with these issues
• Regular performance feedback(both formal and
informal) as well as honest and regular feedback
• Thorough documentation of performance/conduct
issues as well as meetings and discussions
• Ensure that adequate records are kept – meeting/
discussions, warnings a letters of termination.
Where can I get more information?
For more information regarding performance
management, or for a copy of a draft performance
management policy please contact Rae or Chris
on 1300 361 968 or
atsi@industrialrelations.nsw.gov.au
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