A Guide to Performance Management

A Guide to Performance Management

performance management

How to go beyond performance appraisal in the workplace

The Australian HR Institute (AHRI) defines Performance Management as, “a well-established, all-encompassing term used to describe the practice that drives decisions about performance, remuneration, promotions, disciplinary procedures, terminations, transfers and development needs within an organisation”.
A robust performance management framework will involve:

  • Career planning

  • Performance appraisals

  • Disciplinary procedures and counselling

  • Recruitment and selection

  • Compensation and benefits

  • Job design

  • Training and development

Performance Management vs Performance Appraisal

Performance Management provides an umbrella for Performance Appraisal. Performance Appraisal describes a process of judging past performance. Performance Management is an ongoing process, rather than an annual event.

Performance Appraisal is seen as an evaluation of an employee’s work. Performance Management reflects employee development in the context of management, work systems, and team.

Seven Key Results of Performance Management

  1. Even work effort is encouraged all year round, rather than in the months before the appraisal

  2. Individual employee objectives link to company mission, strategic plans and revenue goals

  3. Clear learning and development plans focus the employee’s career journey

  4. Coaching, mentoring and feedback are given ‘real-time’ all year round instead of once a year and often well after the window for relevant correction has passed

  5. Employees feel emotionally secure and valued within the organisation

  6. Encourages management to plan and manage resources effectively every month

  7. Personalised learning and development plans encourage valued staff to stay with the company.

How to Manage Underperformance

To set clear measures for performance, FairWork suggests the following Best Practice Tip:

“Employers should consider writing down a performance management policy that outlines how underperformance will be managed and the possible consequences of underperformance. Being clear about what could happen can make it clear what the employee responsibilities are. It can also help prevent employees feeling victimised if an issue does come up.”

Underperformance includes:

  • Failing to follow workplace policies, rules or procedures

  • Not doing the job employed to do or not working to the required standard

  • Unacceptable behaviour at work, including disruptive or negative behaviour

  • It is important to note that underperformance is different to misconduct

Communication is the key to preventing underperformance. A well-managed performance process will quickly identify issues and give the employee a chance to correct their behaviour. Once expectations are clearly outlined and misunderstandings sorted, an employee is usually eager to get back on track.

Culture and Performance Management

At all times performance management needs to hold a view of the organisations’ business objectives, stakeholder interests and impact of the bottom line. Doing so can ensure a competitive advantage for the company.
As such, senior management is required to provide strong leadership and encourage a culture that values improvement. For Performance Management to work, the company leadership and Human Resources Managers need to value the importance of investing in human capital.

  • HR will ensure that employees understand what is expected of them to succeed, have the skills and knowledge required to meet expectations, and provide training to fill skill gaps.

  • Leadership will provide HR will clear and measurable objectives with which to manage and evaluate staff performance.

Successful performance management will achieve overall business strategy while establishing a high-performance workplace. Employees become highly engaged when they understand that they and the organisation are interdependent. Staff are encouraged to be self-directed about their personal and professional development, enthusiastically engage in training opportunities they feel connected to and are motivated to see the organisation succeed

Why learning and development is vital to company success

If the underperformance is due to a knowledge or skill gap, then employer-provided training is a great place to start. A diploma qualification can give a boost of confidence to an employee a set them on the right path for career advancement. Your investment in them can provide the company with productivity gains and long-term loyalty.
A company with a strong performance management culture will strive to make learning and development a cohesive part of their performance management process. Aligning with a core career development provider such as The College for Adult Learning can strengthen your training offering and establish reputable qualification pathways for employees.

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