Understanding performance management
Performance management is more than annual reviews. It's an ongoing cycle of setting expectations, monitoring progress, providing feedback, and supporting development. When done well, it improves both individual and organisational performance while supporting employee engagement and retention.
What it includes
- Goal setting
- Regular feedback
- Formal reviews
- Development planning
Why it matters
- Aligns individual and business goals
- Identifies development needs
- Supports fair decisions
- Documents performance history
Performance management components
Effective performance management systems include these key elements:
Core components
Performance management process
- Set expectations: Define clear goals and performance standards
- Monitor progress: Track performance against goals regularly
- Provide feedback: Give timely, specific, and constructive feedback
- Conduct reviews: Hold formal assessment conversations
- Develop plans: Create action plans for improvement or growth
- Recognise achievement: Acknowledge and reward good performance
Fair Work compliance
Before terminating for poor performance, employees must be given a genuine opportunity to improve. The Fair Work Commission looks for documented warnings, clear expectations, and reasonable time to improve. Good performance management creates this evidence trail.
Performance management best practices
For managers
- Give feedback frequently, not just at review time
- Be specific with examples, not vague
- Document conversations and agreements
- Focus on behaviours and outcomes, not personality
For the organisation
- Train managers on giving feedback
- Use consistent criteria across teams
- Link performance to development opportunities
- Review and update the system regularly
Common performance management mistakes
Once-a-year reviews only
Annual reviews without ongoing feedback are ineffective. Employees need regular input to improve. By the time issues are raised at annual review, they may have persisted for months.
Vague or unclear goals
Goals like "do better" or "improve communication" are too vague. Use SMART goals (Specific, Measurable, Achievable, Relevant, Time-bound) so employees know exactly what's expected.
No documentation
Failing to document performance conversations creates problems. Without records, you can't demonstrate fair process if issues escalate or employment ends.
Key takeaways
Performance management is an ongoing process, not just annual reviews. It includes goal-setting, regular feedback, formal assessments, and development planning. Done well, it improves both individual and organisational performance while creating the documentation needed for fair decisions.
RosterElf's staff management helps Australian businesses track attendance and manage staff efficiently alongside performance systems.
