The Guide to Performance Management

Discover top tips for managing performance in your business

First published on Friday, Sep 16, 2022

Last updated on Friday, Sep 16, 2022

5 min read

1. Performance Management Strategy

For most business owners, performance management implies managing an employee’s poor performance. In fact, performance management should be about inspiring employees to perform to the best of their ability! An effective performance management plan will ensure your employees stay motivated and productive. This will lead to reduced staff turn-over, replacement and associated costs in the longer term.

2. Performance Appraisals

Appraisals are for making and recording an assessment of an employee’s performance, potential and development needs at a specific moment in time in terms of company goals and objectives. Appraisals should provide an opportunity for discussion to take place regularly, in a more formal or structured manner, on the overall view of work, content, workloads and volume, to review achievements since the last appraisal and agree on objectives for the next. Templates are a great way to ensure the right points are discussed and well-documented.

Did you know? Research by Seek found that 94% Australian employees found regular, informal feedback to be of more value than annual formal performance appraisals (86%).

3. Managing Poor Performance

There are many reasons for poor performance, some of which have nothing to do with work. The employee could be unwell or be experiencing problems in their personal lives, in which case offering support in terms of extra time off. Some employees may lack the will to perform which is expressed in unacceptable behaviour, for example not complying with rules and procedures or being rude and disruptive in the workplace. Depending on the circumstances, disciplinary action may be required rather than performance management.

1. Define the Problem What’s the issue? An employee may not be aware they are performing poorly because they don’t understand what is expected of them in terms of goals or standards they are meant to meet. Review all the information you have (including any documentation) and when you have all the facts and identified the problem, develop a plan to resolve it. To streamline and simplify this process, consider cloud-based storage with a smart filing solution.

2. Meet with the Employee: Try and resolve any issues informally first rather than conducting a formal performance review. Provide a letter to confirm what you discussed and list the steps that you have agreed will be taken towards improvement.

3. Make a Plan: If the employee’s performance has not improved following an informal approach, you can take a more formal approach– and put them on a Performance Improvement or Management Plan (PIP/PMP). Issue the employee with a formal invitation in writing outlining what it is you intend to discuss. Following the initial meeting, if still appropriate to do so, you can invite the employee to a meeting to advise them that you have considered their responses and would like to implement a Performance Improvement or Management Plan (PIP/PMP). These documents may become quite detailed and tricky to create, templates can provide you with a simple guide to building these documents correctly. Make clear what your expectations are, set specific, realistic and achievable goals, and make sure any appropriate training and guidance on how to complete the tasks and duties within a given timeframe is included in the plan. Check-in with the employee regularly – hourly, daily, or weekly depending on the nature of the tasks – to see how they are tracking. Again, give the employee a letter confirming what you have discussed, letting them know they are now on a formal plan to manage their performance, together with a copy of the plan.

4. Monitor, Review & Document: You should get the employee’s feedback on the final plan before implementing it. Once it is in place you should review it to see what is working and what isn’t, maybe a different strategy or approach is required for certain tasks in future. Monitor the employee’s progress against the plan’s objectives and document everything in BrightHR to ensure you can review and reference appropriately.

5. Possible outcomes: If the employee is on a formal, documented PIP or PMP and there is no improvement within the initial timeframe, you should meet with them to review their progress. As these situations can be challenging to face, you may need to ask an ER professional for a non-bias opinion and advice on how to approach the conversation correctly. If there is no satisfactory explanation, you may consider issuing a formal written warning if appropriate, and then extend the plan. You should make it clear from the start what the possible consequences in the long-term are if the employee continually fails to meet the improvement goals, as ultimately it may lead to the employee being dismissed.

If you incorporate these performance management steps, you may be able to develop a more streamlined and effective review process. Performance management strategy can significantly improve employee-manager communication and enhance your relationship with employees, as well as improve your organization’s overall performance.

What can BrightHR Offer?

Bright’s HR software lets you manage your HR and H&S in one place, all from your desktop and mobile app. With Bright, you've got access to great features like: * A library templates including Performance Appraisals and Management documents * Roster and attendance management software * Access to friendly HR and H&S experts for over-the-phone help * Unlimited smart document storage * Recruitment navigator and management software * Expense tracking application * Smart SWMS, risk, and incident reporting * Online E-learning safety courses

Welcome to a new era of people management, the Bright way.

Call us to learn how BrightHR can help on 1300 029 198.

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