What is Employee Performance Management?

Employee Performance Management
Ian Pratt
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Performance Management Overview | The Performance Interview | Download Warning Templates & Flow Chart | Do's, Don'ts & Tips | Phrasing for Negative Feedback

Performance Management Overview

Managers who are quick to develop and use employee performance management programs achieve higher-performance results than those who do not sharpen these skills. By embracing the techniques on this site, you will improve all areas of your team’s business performance, from productivity to quality and customer service.

Managing Employee Performance is also an effective way to
  • Resolve poor employee performance
  • Eliminate undesirable behaviors
  • Build a strong team focused on outcomes
  • Improve employee engagement
  • Minimize any resistance to change
  • Eliminate destructive or negative chatter
Managers who do not actively manage their employee’s performance are more frustrated with their people than managers who actively manage their employee’s performance. Many are even more stressed.

It only takes a few weeks to become proficient in the area of employee performance management. In less than a month you will see the beginnings of a performance-culture in your business. Your under-performing staff will become focused on resolving their performance gap issues, and problem employees will begin to conform.

Ian Pratt has been successfully assisting leaders for more than ten years to improve their employee performance management capabilities. The managers Ian coached have all improved the productivity of their teams; some by more than 200%. Results like these can be achieved through effective employee performance management.

Self Assessment Tools
Behavior Anchored Rating Scale For Employees PDF or MS Word
Behavior Anchored Rating Scale For Manager PDF or MS Word

What is Employee Performance Management?

When searching for the question, "what is performance management?" we tend to find answers that suggest performance management is about communicating and clarifying expectations, and then providing an environment where the employee can do their best.

Three sample definitions are provided below. Performance management is

  • the process of developing and aligning performance expectations within your organization.
  • the process of creating a work environment or setting in which employees are enabled to perform to the best of their abilities.
  • an ongoing, continuous process of communicating and clarifying job responsibilities, priorities and performance expectations in order to ensure mutual understanding between supervisor and employee.

Poor performance occurs when an employee does not meet one or more of your clearly-stated performance or behavioral expectations. You will find that poor performance can be grouped under two headings.

  • Behavior: The employee exhibits an undesirable behavior. Examples include:
    • Showing up late for work
    • Taking excessive breaks
    • Speaking ill to others
    • Providing poor service

  • Performance: The employee does not meet the minimum quality or productivity expectations. Examples include:
    • Productivity failures or challenges
    • Producing poor quality products
    • Not meeting customer service standards

Note: Poor attitude is not mentioned as an example of poor employee performance. This is because you cannot manage attitudes; you can only manage undesirable behaviors and poor performance. Usually, a poor attitude will be associated with some undesirable behaviors and result in poor performance.

Performance management also means taking corrective action when performance does not meet expectations. Based on this additional requirement, we are now defining performance management by these three elements:

  1. Performance management is the process of developing and aligning performance expectations within your organization.
  2. Next, you create an environment where your employees have every opportunity to meet your performance expectations
  3. As required, you take corrective action where performance does not meet established expectations.

While it seems logical that these three elements are sequential, in practice you will find that all three concur in ongoing conversations you have with your people. There are three formal mechanisms for having these conversations:

  • One on One feedback discussions
  • Performance appraisals
  • Performance Interviews
    • - Fireside Chat
      - Performance Interview

What is the goal of an Employee Performance Management Discussion?

The goal of a performance discussion is to engage your employee in constructive conversations about his or her performance and behavior. Said another way, it’s the objective of getting an employee to do what they are paid to do to the required standards (i.e. discussing the gap between current behavior and performance and the required behavior or level of performance).

During a performance discussion you will:

  • Convey your expectations for performance
  • Clarify the actual performance
  • Identify the performance gap
  • Work with your employee to identify agreed upon actions that will result in the employee correcting their performance
  • State the possible consequences if the behavior and performance does not improve
  • Express confidence in the employee

Tip: You will find that it is easier to get an employee to correct their behavior, or be actively involved in changing their performance, if they themselves are included in the process of developing solutions for the performance issue.

Interesting article on why "compassion" is better than "managerial toughness" in employee performance management

Note: Acts of gross misconduct are treated differently. To find out why see employee performance management flow charts

Drivers of Poor Employee Performance

You will find that poor employee performance may be caused by a number of organizational attributes that are not directly associated with the employee. For example, the employee’s performance gap may be caused by one of the following.

  • A skill or knowledge gap—the employee does not know
    • What to do—the expectations are not clear
    • How to do it— the employee does not have the skills
    • When to do it

  • A gap in leadership
    • The employee is not receiving consistent feedback
    • Lack of incentive, such as recognition, for desired performance
    • Lack of consequence for not meeting expectations

  • A gap in organizational support for the task
    • Inadequate tools to do the job
    • Required resources are not available
    • Access to necessary information
    • The employee is not authorized to complete the task

Further Reading

What is an Employee Performance Gap?

A performance gap occurs when an employee does not meet one or more of your expectations. For example, a performance gap exists when an employee:
  • Does not meet an agreed standard of performance
  • Behaves in a way that is inconsistent with company values or code of conduct

Examples of performance gaps
  • Taking excessive breaks
  • Showing up to work late
  • Failing to meet the required level of productivity
  • Failing to meet expectations concerning quality of work
  • Failing to provide the required level of customer service
  • Failing to follow the established processes
  • Being moody and unapproachable
  • Being negative

This list could easily contain hundreds of examples of performance gaps, however, these are the more common issues that managers face.

How to Identify an Employee Performance Gap

You can identify a performance gap through:
  • Observation: Observing one or more of your employees behaving in a way that is inconsistent with your expectations, such as showing up late or taking excessive breaks
  • Measurement: Measuring work performance against an established standard or measuring output quality against an established standard
  • Reporting: Evaluating reports on a person’s performance, such as units of work completed, reports generated for clerical workers, and even financial reports
  • Feedback: Listening to feedback from external or internal customers regarding the performance of an employee
  • Surveys: Distributing and measuring surveys, such as 360-degree feedback, employee engagement surveys, and customer satisfaction surveys

When investigating a concern with a performance gap a leader will:
  • Focus on the performance gap rather than the employee
  • Ensure consistency concerning the behaviors and consequences of their team
  • Use specific examples
  • Remain open-minded on the “employee’s reasons” for their actions and performance
  • Engage the employee in defining the performance problem and the actions to improve performance

Also see Australian Fair Work Standards for best practices

How many types of employee performance management conversations are there?

There are a number of different types of performance conversations that you can have with your employees about their performance.

To start, there are two types of scheduled discussions that are used for general discussion about performance. For performance management information on these two topics, follow the links below.

When you observe an employee who has either undesirable behaviors or poor on the job performance, it is wise to address the performance problem with a sense of urgency rather than wait for a scheduled performance discussion. For these more urgent performance conversations you can use either:
  • Fire Side Chat
  • Performance Interviews

Note: Email is a highly ineffective tool for employee performance management, and it is not recommended even if you have a virtual team. For more performance management information see a full list of our do's and don'ts

Now, lets take a closer look at the more urgent Performance Discussions that you may have with your employees. With these discussions your aim is to correct their performance or eliminate an undesirable behavior.

Informal Counselling or a Fireside Chat

When an employee first fails to meet the required standard of behavior or job performance, you will need to talk to the employee about their performance; however, you will not want to rush to a formal performance discussion. A good start is to have a “fireside chat” with the employee. NEW: Self-assessment for developing your performance management capabilities

Definition: Fireside Chat

In Employee Performance Management, a fireside chat is an informal discussion with the employee about their recent performance. This meeting is best held in a private yet relaxed environment. Ideally, not in a formal closed door meeting room or office (If you don't have informal meeting rooms then a formal meeting room will suffice).

This fireside chat is informal counselling. It is a pre-discipline intervention, which means that after the discussion with your employee, you do not intend to issue any disciplinary consequence, such as a performance warning.

The employee may highlight mitigating circumstances, claim they are unaware of the performance expectation or just admit they are not on track. The fireside chat is a conversation where you are giving your employee an opportunity to open up to you and discuss any issues that they may have. You will still need to assist your employee to develop an action plan to get their performance and behavior back on track.

Fireside Chat Hints and Tips

  • Because the fire side chat is a pre-discipline intervention, the employee is not generally offered the opportunity to have a witness present. Nonetheless, it is wise to check your local industrial laws.

  • This first stage of performance management does not require a detailed account of the discussion to be recorded and kept. You will need to keep notes or a log that confirms the conversation has occurred. Generally the notes can be one or two lines.

  • For example: 20/04/12 spoke to John Smith re: quality KPI's not being met. John is currently achieving 70% for quality. Advised John that the KPI for quality is 90%. John advised that he has become complacent and will improve; he knows what is expected and will meet quality KPI from now on.

    Note: In many regions of the world you do not have any legal obligation to provide a copy of this file to your employee. Still, it is always good practice to seek advice from your local HR/IR adviser.

  • An important skill to learn for a fireside chat is the skill of catching your employee the second time around. This skill is simply accepting an employee’s concern that they did not know about your expectations, and then apologizing for not having told them previously, even if you think they should know your expectations.

  • At the end of this discussion, both you and your employee should be clear about your expectations of their performance and any actions that are required for the employee to correct your performance concern. These actions could include:
      • Training
      • Coaching
      • Providing the right tools for the job
      • A commitment to improve performance

  • At the end of the fireside chat discussion the employee should:
      • Have a clear understanding of your expectations
      • Have made a commitment to improving and sustaining their performance
      • Agree upon a timeframe to achieve the improved performance
      • Know what the consequences are if they do not meet expectations

Acts of Gross Misconduct

The fireside-chat-style pre-discipline intervention is not used for acts of gross misconduct. See the employee performance management flow chart for a guide on how to handle gross misconduct, and speak with your local HR adviser before taking action.

It is always good practice to check with your HR adviser before issuing any performance warnings or terminating an employee’s position.

What comes next?

Now you have had a fireside chat with your employee and they have not improved their performance sufficiently. What should happen next? The Employee Performance Management Interview

Site Links
Performance Management Overview
The Performance Interview
Download Letter Templates & Flow Chart
Do's, Don'ts & Tips

Performance Management Checklist PDF MS Word
Behavior Anchored Rating Scale For Employees PDF or MS Word
Behavior Anchored Rating Scale For Manager PDF or MS Word