Performance management policy template
A free, ready-to-edit performance management policy template for Australian workplaces. Set clear expectations, run fair and consistent reviews, and follow a structured underperformance process that supports procedural fairness — no signup required.
Performance management policy
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By downloading, you agree to our template disclaimer
This performance management policy template reflects Australian workplace and Fair Work standards at the time of publication and is provided as a general guide to adapt for your business — it is not legal advice. It does not constitute legal, HR, or professional advice and should not be relied on as a substitute for advice specific to your business, workforce, or circumstances.
Why your workplace needs a performance management policy
A performance management policy is a formal framework that aligns each employee’s goals with your business objectives. It sets out how expectations are agreed, how feedback and reviews work, and what happens when performance falls short — so managers apply consistent standards and employees know exactly where they stand.
Without a documented framework, standards drift between managers, employees feel unsure about what’s expected, and underperformance goes unaddressed until it becomes a serious problem. A clear policy creates fairness on both sides: employees understand how they’ll be assessed and supported, and managers have a repeatable process that reduces bias.
It matters for compliance too. Under Australian workplace law, if you ever need to terminate someone for poor performance, you need to show you followed a fair, documented process. A consistently applied policy demonstrates procedural fairness and helps protect against unfair dismissal claims. Store the policy and capture acknowledgements in your HR software so you can show every worker has read and understood it.
What a performance management policy should cover
The essentials of a fair, consistent framework
Performance standards
Clear, measurable expectations and goals (KPIs) for each role.
Review cycles
When and how formal reviews are scheduled and conducted.
Ongoing feedback
Regular two-way check-ins, coaching and informal conversations.
Performance ratings
How performance is assessed, rated and calibrated fairly.
Improvement process
A structured path for addressing underperformance, including PIPs.
Documentation
What records are kept and how they support procedural fairness.
What's included in this template
A complete framework for managing performance consistently
Purpose & scope
Why performance management matters and who and when it applies to.
Policy statement
Core principles of fair, supportive and consistent performance management.
Performance expectations
How job expectations and measurable goals are set and communicated.
Review process
The formal review cycle, timing and how meetings are run.
Ongoing feedback
Regular check-ins, coaching and informal feedback between reviews.
Performance ratings
How performance is assessed and rated, with clear definitions.
Performance improvement
Informal steps, formal improvement plans and warnings.
Recognition & development
How strong performance is acknowledged and linked to training.
Documentation & records
What is recorded and how records are stored and maintained.
Review & acknowledgement
Policy maintenance and employee sign-off.
Managing underperformance fairly
A clear process protects employees — and your business
Procedural fairness comes first
Before any formal action, employees should understand the standard they’ve missed, be given a genuine opportunity to respond, and be offered support to improve. Document every conversation — if performance ever leads to dismissal, a fair, recorded process is your best protection against an unfair dismissal claim. See how to write a warning letter.
Separate performance from misconduct
Genuine underperformance (not meeting the standard) is managed differently from misconduct (a breach of conduct rules). Performance issues call for support, coaching and a performance improvement plan; serious misconduct may justify a faster disciplinary response.
The underperformance process
Informal feedback
Raise the concern early, clarify the gap and agree on changes.
Improvement plan
Set specific goals, support and a realistic timeframe in a PIP.
Formal review
Meet to review progress, with a support person if requested.
Document outcomes
Record each step, decision and the next review date.
Outcomes range from continued support and coaching to a formal warning or, where there is no improvement, termination — applied consistently and only after a fair process. Use a performance review template to keep assessments structured and comparable.
A good policy also recognises that not all performance issues are conduct issues — some employees need development rather than discipline, which is where your capability policy and training & development policy apply. The Fair Work Ombudsman’s best-practice guide on managing underperformance sets out the expectations Australian employers should follow.
Who should use this template?
Any Australian business that wants fair, consistent performance management
Especially useful for businesses with managers, where consistent standards across teams matter most.
Compliance resources
Official guidance on managing performance and underperformance fairly.
Manage your policies the easy way
RosterElf helps Australian businesses store policies, capture employee acknowledgements at onboarding and keep an audit trail — all in one place.
Related guides
Run reviews and manage underperformance the right way
Related templates
Build out your performance and employment framework
Performance review template
A structured form to assess goals, strengths and development areas.
View templatePerformance improvement plan (PIP)
Set clear goals, support and timeframes for an underperforming employee.
View templateProbation policy
Assess and confirm new employees during their probation period.
View templatePerformance management policy FAQ
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A performance management policy is a formal HR framework that aligns individual goals with your organisation’s objectives. It sets clear expectations, outlines how feedback and reviews work, and standardises the steps for addressing underperformance or supporting growth. Core components include objective setting (measurable goals or KPIs), regular monitoring and two-way feedback, structured reviews, and a fair underperformance process.
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A complete policy should cover its purpose and scope, a policy statement of principles, how performance expectations and goals are set, the review cycle, ongoing feedback, how performance is rated, a structured improvement process for underperformance, recognition and development, documentation and record-keeping, and an employee acknowledgement.
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Yes. This template is a solid foundation, but you should tailor it to your workplace, management structure and any applicable modern award or enterprise agreement. Make sure your procedures align with Fair Work requirements for procedural fairness before rolling it out.
Before you download
General information only — not legal advice
This document is a general HR template provided for informational purposes only. It is not legal advice and may not reflect the latest changes in legislation or apply to every workplace situation. RosterElf Pty Ltd and the template provider accept no liability for any loss arising from reliance on this document. Users should seek independent legal advice and customise the template to ensure it complies with all relevant laws, awards and workplace requirements.