A Guide to Managing Performance
Retaining high performing employees and managing performance have major business benefits. Peta Tumpey and Katie Simon of TressCox Lawyers provide a guide.
Businesses benefit significantly by retaining motivated, strongly performing employees and by addressing underperformance appropriately and sensitively. Increasing employee retention and managing underperformance effectively promotes a healthy and productive workplace, which reduces the costs and time associated with recruitment and retraining, employee absences and legal claims made by employees.
Managing strong performers
Increasing employee retention, particularly the retention of motivated and strong performing employees, has a number of significant benefits for employers. It assists in creating a positive workplace culture, reduces the costs of recruitment and retraining and encourages business stability through stronger client/customer relationships.
Employers can improve employee retention by implementing strategies that promote a positive workplace culture and help ensure that employees are satisfied in their role. There are many ways to do this, including:
- Creating and providing career progression and advancement opportunities
- Providing training and retraining opportunities;
- Competitive pay and benefits
- Performance recognition programs, such as bonus and commission programs
- Using annual performance reviews (required by the Architects Award) as genuine staff development opportunities, not a tick-box exercise
- Social events to promote team building and a positive work environment.
If you become aware of an employee that is unhappy or dissatisfied with their role, we suggest meeting with that employee to discuss the issues and to identify the reason for the unhappiness or dissatisfaction. Once the reason or reasons are identified, you may be able to offer a solution to encourage the employee to stay with your business. If, for example, one of your strongly performing architects is finding his or her role repetitive and unchallenging, you may be able to offer them more responsibilities, varying the type of project they are working on, or support him or her in doing further study or retraining.
Managing poor performers
Performance management may become necessary for employees that fail to perform their duties to an acceptable standard, fail to comply with policies or procedures or engage in unacceptable behaviour in the workplace. There are practical benefits that flow from managing underperforming employees effectively. These include reducing the incidence of sick leave, improving performance and promoting a positive workplace culture. This also leads to higher productivity and a reduction in the time and expenses associated with leave, recruitment and retraining. There are also legal issues associated with this, including reducing the risk of a legal claim being made by that employee and the organisation’s exposure in such a claim.
Generally, when an employee is being performance managed, there is a higher likelihood of that employee going on sick leave or making a claim such as a workers compensation claim, a bullying claim, a discrimination claim or a general protections claim. To reduce the risk of a claim being made, it is important for employers to ensure that all management actions carried out in relation to these employees are lawful, appropriate, reasonable and necessary.
Every situation needs to be treated on a case-by-case basis to determine the most appropriate management action. However, generally, where an employee is performing poorly or has engaged in inappropriate or unacceptable conduct, we would suggest taking the following steps:
- Organise a meeting with the employee to clearly identify and address the performance and/or conduct issue(s). We recommend giving the employee notice of any meeting and the opportunity to bring a support person.
- Give the employee an opportunity to respond to any issues raised in the meeting and consider the response before taking any further action.
- Identify whether there are any factors, either work-related or not work related, that may be affecting the employee’s performance and/or conduct, and if appropriate, consider whether any changes can be made to assist the employee improve their performance/conduct.
- Discuss the organisation’s expectations, providing any necessary company policies or procedures and offering training or support where appropriate.
- Where the issues are performance-related, create a performance improvement plan with the employee. This should set realistic and reasonable expectations and goals for the employee.
- Advise the employee of any consequences of failing to improve in respect of the performance and/or conduct issues, such as disciplinary action.
- Monitor the employee’s performance and/or conduct and have regular meetings with the employee to address the issues and to assess whether the employee has improved or met the organisation’s expectations and goals.
- Clearly record and document all meetings and communications with the employee.
If, after taking these steps, the employee’s performance and/or conduct does not improve (and there is no valid reason for this), it may be necessary to issue the employee with a formal written warning. Following this, if there is still no improvement, or unsatisfactory improvement, it may be appropriate to take further disciplinary action against the employee such as issuing another formal warning or terminating the employment.
When undertaking performance management, it is important that employers also reduce the risk of a claim being made by the employee and reduce the organisation’s exposure in such claim. We suggest that employers take the following steps to ensure that this doesn’t happen:
- Have internal policies and procedures in place for performance management and discipline and apply those policies and procedures.
- Communicate all concerns regarding the employee’s conduct/performance in writing.
- Maintain objectivity.
- Ensure all management actions are lawful, appropriate, reasonable and necessary.
- Avoid heated exchanges with the employee.
- Promptly bring any performance and/or conduct issues to the attention of the employee.
- Document all performance management discussions and meetings.
- Pay attention to oral and written communications to the employee.
- If possible, involve a manager, human resources or in serious cases, a lawyer.
It can be challenging to implement effective policies, procedures and strategies to increase employee retention and to effectively manage poor performance. It may also be difficult to decide the best course of action for managing employees. However, many business benefits flow from effective management. Given this, it may be appropriate to consult a lawyer or workplace advisor to discuss your options and to minimise risks of a claim, and the organisation’s exposure should a claim eventuate. This can be especially helpful for small organisations without dedicated human resources staff.
Peta Tumpey is a Partner at TressCox Lawyers. Katie Simon is a solicitor at TressCox Lawyers. They invite you to contact them should you have questions in relation to this article.