Managing Employee Performance

On this page

Protect Your Business

Request a Consultation with One of Our Advisers Today!

Employee And Employer Looking At Screen For Changes To Clerks Award

Managing employee performance is important part of running a business. Employees have been hired by the business to achieve certain goals. The aim of managing employee performance is to ensure that employees perform at their best and remain productive.

But how do you do this? There are many ideas about the best approach out there, with each year seeing a new set of people touring countries with their latest and greatest theory on managing employee performance.

This guide will provide an overview of some of the most common best practice tips for managing performance.

What Does It Mean To Manage An Employee’s Performance?

Managing an employee’s performance includes all the steps taken by a business to ensure they are getting the best performance from their employees; we will refer to this as your performance strategy. This can involve reviewing and providing ongoing coaching to employees on their performance, as well as procedures for addressing underperformance (generally referred to as performance management).

A businesses overall performance strategy should aim to develop an environment which encourages continued growth of employees and develops a culture of high performance.

Generally, a performance strategy will include components of:

  • Conducting frequent informal as well as formal reviews and evaluations
  • Identifying how individuals will contribute to your established business goals and setting them goals accordingly
  • Providing ongoing feedback, coaching and development opportunities to improve performance
  • Offering reward, recognition and praise

How Do You Manage Employee Performance?

Managing employees can be hard. The perfect method for managing employees remains elusive, however we will discuss some common methods used and you can determine which one is best for your business.

The best first step to managing performance, irrespective of the method taken, is to proactively establish between you and the employee, what is expected of the employee in their role. This will assist you in being able to ascertain whether the employee is performing to your expectations.

During the interview process, an employer can outline clear expectations of the role based on the job description. Once hired, an employer can then compare the employee’s performance against the job description to determine company standards have been met.

For a comprehensive performance strategy, a business should also identify and review how the employee’s position aligns with the company’s overall goals and objectives. This can assist in detailing specific results and deliverables that you want particular employees to achieve.

Employee performance goals in general are best when they are clear and outline what measure will be used to evaluate the outcome. Such goals are commonly referred to as key performance indicators, or KPIs. KPIs can be included in the employee position description and will also help set the expectation between employer and employee.

Get Workplace Advice Now

Call Our Team of Advisers To Get Help With Any Workplace Related Questions.

Conducting Annual Performance Review (Or Appraisal)

Annual performance reviews and evaluations are some of the most popular tools used to manage employee performance. Performance reviews are used by employers to offer a comprehensive overview to the employee’s performance. These reviews are most commonly conducted annually (over the last 12 months) but should be conducted more frequently for a more pro-active approach to managing performance issues before they escalate, and should focus on the ongoing growth and development of the employee.

Most performance review processes incorporate all components of performance management – planning, coaching, review, and feedback – such as the following:

  • Provide the employee with specific details that support whatever claims you make – both positive and negative.
  • Bring an agenda to the review and invite employees to do the same. Review all important parts of the appraisal, highlighting both struggles and successes.
  • Offer feedback and coaching on how the employee can improve on their weaknesses. Acknowledge their successes.
  • Point out exactly what made each component a success. Employees can use this feedback to improve other areas of their performance. Highlight where the employee’s skills and performance align with the organisation’s goals and mission.
  • Next, work together with the employee to create a plan for addressing shortcomings and improving their overall performance, including any training that is required. It’s best to list specific actions and desired results to avoid confusion and establish concrete goals.
  • Finally, set goals for personal development and growth for the employee to aspire to.

360-Degree Feedback

It is commonly believed that the manager or supervisor is the primary source for review and evaluation feedback comes directly from these positions. However, the 360-degree feedback process takes performance reviews one step further.

This type of feedback includes evaluations, observations, and comments from not only supervisors and managers, but also co-workers, customers and even subordinates. A self-evaluation is also an important part of this process.

By collecting feedback from all these sources, both you and the employee will get a more varied picture of the employee’s performance. Certain team members may provide useful feedback or suggestions that others cannot. Feedback that is gathered from multiple sources and establishes a complete picture also assists in achieving agreement with the employee on their perceived performance.

Management by Objectives

Management by Objectives is another method for managing performance which involves breaking down organisational objectives to identify what each person needs to achieve. For the most effective outcome, it is recommended that employees and managers work together to plan and set new goals and objectives.

As previously discussed, when setting these goals/objectives they should be specific, with detailed deliverables, and a set timeline. However, employers should be careful of only considering the quantity of work required and should also considering the quality.

Another important element of Management by Objectives is a top-down approach. That is the established organisational goals and values are used to help create individual goals for each employee. Employees that understand how their role fits in to the operation of the business can work more effectively.

FREE Employee Performance & Termination Guide

Employer’s guide to handling employee performance carefully like an HR expert.

How to Manage a Poorly Performing Employee

The truth is, not all evaluations will be positive. And not all employees will perform their best, all the time. In these cases, you may have to begin a performance management process.

Performance management usually involves tactfulness and sensitivity, combined with being direct and upfront.

There are many ways to manage a poorly performing employee, so we will provide you some best practice tips to getting this right.

  1. The best approach to managing underperformance is head-on. Don’t procrastinate or dance around the issue, as employees can often remain unclear that there is a serious issue.
  2. Be direct with the employee about where their performance is lacking. For example, give examples of when they have not met your expectations and what you require.
  3. It’s important to document all conversations about performance. This may begin with the employee receiving a record of your concerns, highlighting what they need to do and a deadline (often called a verbal warning).
  4. Once the initial conversation has been had, be sure to follow-up. Check on the employee’s performance over the next several weeks and provide feedback and coaching to help them meet their goals.
  5. If the underperformance issues continue, employers can consider more formal performance management processes, which may include written warnings and/or a performance management plan (a document outlining the issues, what is required and by when, as well as how they will be measured).
  6. You can look inwardly at how you handle tough situations. Strengthening your own communication skills may increase your chances of effectively inspiring and coaching employees.

Performance Checklist

Are you ready to welcome a performance strategy into your organisation? This performance checklist will help.

Here are a few tips to get you started.

Step 1: Planning

Meet with employees to set initial performance goals. Work together to set measurable goals that will help maximize the employee’s contribution to the business strategy. Revisit and reassess these goals periodically.

Step 2: Monitoring

Monitor employee progress frequently. Avoid waiting until the annual performance review to perform an evaluation. Ongoing informal feedback that provides actionable guidance is best. This allows you to identify and address any issues in real-time. It also lets employees know you’re invested in their success.

Step 3: Improving

Provide any training or support employees need to improve their performance. Help employees improve on poor performance as well as highlight and enhance their strengths.

Step 4: Reporting

Compare employee performance with the expectations set forth in the job description. Determine whether employees are meeting job standards or need intervention or further training.

Share and discuss your findings with the employee to create new plans, goals, and objectives. Document these discussions, which can be done through a review document, or a more formal letter.

Step 5: Rewarding

Positive reinforcement is an important part of helping employees reach optimum performance. Don’t be afraid to recognise and reward hard work.

Show the employee that their efforts haven’t gone unnoticed. These incentives motivate employees to continue working at their best to improve both themselves and the organisation.

Get Workplace Advice Now

Call Our Team of Advisers Who Will Help You with Your Workplace Questions.

Creating a Cohesive Work Environment

Are you struggling to align your employees’ performance with your company mission? A performance management strategy can help create a cohesive workforce where everyone shares the same vision and goal for the future.

At Employsure, we can help you achieve a safe, fair work environment for everyone.

Contact us today for more information and a comprehensive list of our services.

Frequently Asked Questions

  • Why Is a System to Manage Employee Performance Important?

    A system in place that helps review and address employee performance helps both employees and managers track progress, set goals, and create a cohesive work system. These environments assist employees and managers to share expectations and collaborate to achieve results. This boosts productivity for both the organisation and individual employees.

  • What Is the First Step to Managing Employee Performance?

    The first step to managing employee performance is the planning phase. Here, employees and managers sit together to create goals that help employees meet the company’s expectations.

  • How to Set Up a Performance Management System

    First, evaluate how your company is currently tracking employee progress and company-wide goals and objectives. Then, determine if the goals that you have set are achieving what they are supposed to be achieving, if they are not you may need to create new goals.

    Next, the company should ensure that company and individual goals are clearly communicated, and all expectations are understood.

    Monitor and develop employee performance over a time period which can measure the goals identified (this can vary from one every 3 months, to one a year). However, do not forget to provide ongoing coaching to employees in real time. When you evaluate/review your employees’ performance, provide coaching and feedback for continuous improvement.

  • What Is a Performance Management Policy?

    A performance management policy can provide an outline of when and how unsatisfactory performance will be addressed. A company may have a separate policy, or this may form part of their disciplinary policy/procedures.

    Such a policy can set expectations, guidelines, and steps on how performance matters are dealt with.

  • How to Improve your Current Methods for Managing Performance?

    Start by removing any components of your current practices that aren’t effective. This may mean eliminating traditional reviews that don’t offer opportunities for further training or 360-degree feedback that is not providing an accurate appraisal.

    Another option is to turn your managers into coaches who are capable of training subordinates. Don’t be afraid to give credit where credit’s due. Develop a clear way of measuring success so that you can create goals backed by evidence.

Have a question?

Have a question that hasn't been answered? Fill in the form below and one of our experts will contact you back.

  • This field is for validation purposes and should be left unchanged.

Call Now

1300 651 415

Live Chat

Click here