Performance management

Business meeting
Danielle Foulis from local business Career Management Advisors dropped into BizHub to talk to us about "performance management" - a human resourcing issue that all employers will want to know more about.

Performance Management

First of all "what is performance management" we hear you ask.

Performance management is the process of managing employees to get the best results, getting what you are paying for and getting the outcomes that you are happy with. It can also often be tied to disciplinary actions, although it doesn't always have to be. In fact, being proactive with performance management can sometimes reduce the need for disciplinary action.

Performance management is part of the employment cycle - hiring, induction and training, ongoing performance management and review and end of employment.

Inducting a new employee

OK, you've found a person with the skills that you think will fit your business. You hire them and do all the paperwork.

Now comes the time when you induct them into the business and their role - train them and set expectations.

A lot of misunderstandings can be avoided if this induction period is managed well.

Be clear with communicating what you expect of them in their new role - (and depending on job) even simple things such as when they should start work and what they should wear.

What level of performance and standards are you expecting?

If you want your new employee to perform at the standard of your best employees, it is a good idea to have the new employee partner or be mentored by your best employee. They can assist in training, demonstrate good behavior and be a role model. If you don't appoint a "good" employee to be a mentor, quite often a poor performing employee will set themselves as a mentor and offer a lower than preferred standard.

During the induction and probationary period, it is important that the owner of the business build a good relationship with the new employee - even if they don't supervise them on a day-to-day level.

Meet regularly with the new employee to establish a good relationship, and get to know how they are going in the new role, if they need more training and how they are performing. Assist them to do their job better and let them know that they are going well if they are. This will provide the employee with confirmation that they are meeting your expectations.

Regular meetings will let them know that despite your absence (if you are not with them all of the time), you are taking an interest in how they are going. It also helps the employee feel comfortable to come to you if there are any issues they need help with and this open communication will lead to a positive work environment. It also helps to build loyalty from the employee when they have a positive relationship with the person who employs them.

A guide of how often to meet is once per week in the first month, then once per fortnight for the second month, then once per month during the probation period.

The probation period can last between 3 and 6 months, with many businesses opting for a 6 month probationary period. The added value in meeting with a new employee regularly during the probation period is that there should be no surprises at the end of the probation period as both the employee and you will know exactly how they have been tracking.

Poor performance and the conversation

A small business with less than 15 staff can dismiss an employee who has been in their job less than 12 months. In this instance, the employee cannot access unfair dismissal laws.

Some businesses may just want to dismiss an employee if they are performing poorly seeing this as the easier option - but before you are so quick to dismiss the person that you have spent valuable money and time hiring and training - shouldn't you have a conversation about why their performance has started to slip? If you don't ask, you'll never know and you may find out that there may be another issue within your business that could be resulting in the poor performance. It may be that there is poor communication or training in place to enable that person to perform at the standard you require. In that instance, getting rid of the person and having to find another suitable candidate may be more costly than organising some additional training.

In Danielle's twenty years' of experience in Human Resources, she has often found that the poor performance of an employee can be the result of poor training or even poor management. Making sure you gain an understanding of what is happening may lead to you gaining more insights about your own business and where there are gaps or opportunities for improvement. If you don't find out, you may find the cycle repeating with the next employee and nobody has the time to spend continuously recruiting and training new employees.

There are two ways to manage performance - informally and formally.

When having informal performance discussions, it can be a simple case of having a chat with the employee and mentioning you are a bit concerned about their performance and whether there is anything going on that you can help them with. This may be all that it takes to get an employee back on track. However, this is sometime not effective or the performance issues are too important or serious to take an informal approach. For examples, issues around safety should be dealt with quickly and formally.

When you need to have formal performance discussion, the following guide is useful:

  • Have a 3rd party present to act as a witness such a supervisor or business partner
  • Discuss concerns (or evidence) of lack of performance and seek reasons for why they haven't been performing
  • Agree on the next steps to rectify performance issues - e.g. extra training, getting to work on time. Setting a date to review whether the performance has improved is useful in keeping performance management on track.
  • State possible consequences. It is important to be clear with the employee that failure to meet performance standards or rectify the issue may lead to termination of employment
  • Employees have the right to respond, therefore don't walk into a performance discussion with a written warning in your hand - it implies you have no intention of listening or considering what the employee has to say
  • Employees have the right to bring a support person and it is good practice to offer this to them in situations where the performance discussion could lead to termination of their employment
  • Follow up with a written confirmation of what was discussed and this can act as a written warning

There are three potential outcomes that may follow from this awkward conversation:

  1. Improved performance
  2. Termination of employment
  3. Employee chooses to leave/resign (maybe not immediately but shortly after as they work out that they are unable to meet the requirements of the job)

Business owners need to have this conversation with poor performing employees, as uncomfortable as it may be.

Even if you are within your legal rights to sack an employee without discussing why, think about the message this might send to your other employees.

Poorly handled dismissals can lead to poor morale and a sense of injustice with remaining staff members. Everyone likes to work for employers who they believe are fair in the way they treat their staff. When employees feel nervous about their employer, and don't feel they can communicate openly with their employer, they will sometimes seek a Union to intervene.

It is therefore very good practice to ensure you have fair and open relationships with your employees.

It is up to the owner of the business to provide good leadership and communication - leading to positive relationships, a happy work environment and loyal employees.

Visit the Fairwork Ombudsman website to access more information about performance management and underperforming staff.

Meet the businessDanielle Career Management Advisors

Career Management Advisors is a local business specialising in human resources and career management for individuals.

Danielle brings a wealth of information gained while working in big business to her clients - making it possible for them to have access to their own human resource department.
Danielle tailors practical solutions including structuring human resource policies, employee contracts and conditions, and ensuring that the business meets their legal obligations.

Visit for more information about how Career Management Advisors can assist your business or career.