Table of Contents
- What is Performance Management?
- Is a Proactive or Reactive Approach More Appropriate?
- An Ongoing Process
- How Do I Know if My Employee is Underperforming?
- Steps For Managing Underperformance
- What if There Are Ongoing Problems and No Improvement?
- Are There Any Risks?
- Key Takeaways
- Frequently Asked Questions
As an employer, managing employees can be challenging. However, understanding the performance management lifecycle can ensure your employees’ skills meet your business objectives. This article will describe the importance of implementing the performance management lifecycle in your business and some steps to take when an employee is underperforming.
What is Performance Management?
Performance management refers to aligning your employees’ skills and requirements with the business objectives. The purpose of performance management is to ensure your employees are growing to create a high-performing workforce and growth within your business.
Managing your employees’ performance is more than just rating their work. It is a cycle that involves planning your employee’s work, monitoring their performance, developing their ability to perform and recognising and rewarding their good performance.
Is a Proactive or Reactive Approach More Appropriate?
Deciding if you should take a proactive or reactive approach to performance management will ultimately depend on the individuals involved. It will also depend on the dynamic relationship between you and your employees.
Generally, a proactive approach to performance management can lead to a healthier, happier and more productive work environment for both employee and employer. This is because both parties feel valued, respected and heard.
A Proactive Approach
A proactive approach to performance management begins as soon as the employee is hired. It involves:
- regular and ongoing discussions;
- constant appraisals; and
- monitoring.
The proactive approach also promotes clear communication of expectations. This is essential as it will alert employees to any issues and allow them to improve.
If there is no improvement after this process, more serious action may be required such as disciplinary action or termination of the employment relationship.
A Reactive Approach
In contrast to a proactive approach, a reactive approach means that the performance management process only commences when problems arise. Often, the issues will become noticeably detrimental and require serious action on your part as the employer.
If the situation calls for the termination of the employment contract, this will be a challenging stage to implement specific performance management tools. As a result of the lack of a proactive approach to performance management, the employee will not have a real chance to improve their performance after serious action is taken.
Continue reading this article below the formAn Ongoing Process
Performance management is an ongoing process that involves both the employer and the employee. So, what could this process look like? It involves:
- meetings to discuss expectations and goals;
- regular check-ins to see how the employee is progressing with meeting these expectations and whether they are performing in a way that aligns with your business’ values;
- documenting meetings and measuring progress to see if there is an improvement;
- issuing verbal and written warnings where problems occur and a reasonable opportunity to improve; and
- rewarding employees who are improving as per your feedback.
How Do I Know if My Employee is Underperforming?
Your employee may be underperforming if they do not:
- regularly complete their work to an appropriate standard;
- follow the rules or policies surrounding the quality, timeliness and accuracy of work; or
- show a reasonable amount of care for their work and the business.
Underperformance can also involve the:
- quality of the employee’s work;
- employee’s failure to adhere to timelines; and
- accuracy of the employee’s employment.
The employee should be aware of the standard of work you expect from them. Ideally, you will have a written policy outlining desired behaviour and cultural values. Further, the employee should be able to access the written policy easily.
Steps For Managing Underperformance
Four key steps to take when managing an employee’s underperformance are:
- identifying the problem and ascertaining how serious it is;
- discussing your concerns encouragingly;
- collaboratively creating a solution, such as more training or clarification of the role’s scope; and
- monitoring performance while maintaining an open dialogue with the employee about their progress.
What if There Are Ongoing Problems and No Improvement?
If the employee continues to demonstrate unfavourable behaviour, you can:
- pinpoint the significant issues and ways the employee can improve;
- meet with the employee to discuss the problems; and
- create a collaborative plan to help the employee improve.
Furthermore, it may be beneficial to offer additional training to the employee. This will help improve their confidence and provide an opportunity to fill any gaps in their knowledge.
Are There Any Risks?
One critical risk associated with the poor implementation of a performance management lifecycle is the possibility of the employee bringing an unfair dismissal claim. This can occur if the employee was not:
- notified about problems with their performance; or
- given a chance to fix these problems.
Above all, meetings with the employee must be documented. You can provide these documents as evidence that due process was followed. In an unfair dismissal claim, the Fair Work Commission (FWC) will want detailed records showing that you gave your employee the best chance of success.
Similarly, a risk may arise if you merge performance management steps with official warning letters. The ongoing performance management process should not mean the employee is always on the verge of termination. Instead, the process should focus on general professional development and overall improvement.
However, the final stages of performance management may involve official warning letters. As per your feedback, these warning letters will likely state that the employee’s position may be terminated if they do not improve. The purpose of each performance management step should be clear to the employee. This is so the employee can gain the appropriate importance of the process.
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
Key Takeaways
Ultimately, performance management will promote a healthier and more productive work environment. Typically, a good performance management approach will:
- foster a better relationship between your business and your employees;
- provide you with procedures for dealing with underperformance; and
- encourage you to solve issues with employees as early as possible.
If you need any help with your business-related issues, our experienced employment lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
Performance management refers to aligning your employees’ skills and requirements with the business objectives. The purpose of performance management is to ensure your employees are growing to create a high-performing workforce and grow your business.
Your employee may be underperforming if they do not regularly complete their work to an appropriate standard, follow the rules or policies regarding the quality of work or show a reasonable amount of care for their work and the business.
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