BSBMGT502 Manage People Performance Student Workbook v1.0

Crown Institute of Business and Technology Pty Ltd ABN 86 116 018 412 National Provider No: 91371
CRICOS Provider Code: 02870D

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BSBMGT502 Manage people

performance
Student Workbook
Crown Institute of Business and Technology Pty Ltd ABN 86 116 018 412 National Provider No: 91371 CRICOS Provider Code: 02870D
Acknowledgement
This workbook is developed by Sheikh Imran for Crown Institute of Business and Technology.
CIBT would like to acknowledge Sheikh Imran for his assistance with the development of this
resource.
Copyright Statement
This workbook is copyrighted to Crown Institute of Business and Technology. All rights are
reserved for Crown Institute of Business and Technology. No part of this workbook may be
reproduced in any form or by any means, electronic or mechanical, including photocopying or
recording, or by any information retrieval system without written permission from Crown
Institute of Business and Technology.
The information contained in this workbook is drawn from sources believed to be reliable. CIBT is
not responsible for any injury, loss or damage as a result of material included or omitted from
this workbook.
BSBMGT502 Manage people performance Student Workbook v1.0 Page ii of 128

Table of Contents
Introduction ........................................................................................................................................... 1
Purpose of the learning resource ..................................................................................................... 1
Learning support materials ...............................................................................................................4
Session 1 ~ Allocate work ..............................................................................................................4
Learning Prompt ............................................................................................................................4
Consult relevant groups and individuals ......................................................................................4
Resources and resource management ......................................................................................... 5
Class Activity 1 ................................................................................................................................ 7
Session 2 ~ Allocate work ..............................................................................................................8
Learning Prompt ............................................................................................................................8
Develop work plans .......................................................................................................................8
Class Activity 2.............................................................................................................................. 13
Session 3 ~ Allocate work ............................................................................................................ 14
Learning Prompt .......................................................................................................................... 14
Develop work plans in accordance with operational plan ........................................................ 14
Performance management plans and systems .......................................................................... 17
Class Activity 3.............................................................................................................................. 18
Session 4 ~ Allocate work............................................................................................................ 19
Learning Prompt .......................................................................................................................... 19
Allocate work in a way that is efficient, cost-effective and outcome focused ........................ 19
Action plans...................................................................................................................................21
Class Activity 4 ............................................................................................................................. 25
Session 5 ~ Allocate work ............................................................................................................ 26
Learning Prompt .......................................................................................................................... 26
Performance standards, code of conduct and work outputs ................................................... 26
Class Activity 5.............................................................................................................................. 37
Session 6 ~ Assess performance .................................................................................................39
Learning Prompt ..........................................................................................................................39
Design performance management and review processes ........................................................39
Performance indicators (KPIs) ................................................................................................... 40
BSBMGT502 Manage people performance Student Workbook v1.0 Page iii of 128
Class Activity 6 ............................................................................................................................. 45

Session 7 ~ Assess performance ................................................................................................. 47
Learning Prompt .......................................................................................................................... 47
Participate and conduct performance management Intervention .......................................... 47
Decision-making responsibilities .................................................................................................50
Risk assessment ........................................................................................................................... 51
Class Activity 7.............................................................................................................................. 53
Session 8 ~ Assess performance ................................................................................................. 55
Learning Prompt .......................................................................................................................... 55
Performance Management and Design organisation Objective ............................................... 55
Performance management .........................................................................................................58
Class Activity 8 ............................................................................................................................. 62
Session 9 ~ Provide feedback .....................................................................................................63
Learning Prompt ..........................................................................................................................63
Provide informal feedback to staff .............................................................................................63
Class Activity 9 ............................................................................................................................. 74
Session 10 ~ Provide feedback .................................................................................................... 75
Learning Prompt .......................................................................................................................... 75
Regular Evaluation of performance management .................................................................... 75
Class Activity 10 ............................................................................................................................ 82
Session 11 ~ Provide feedback .....................................................................................................83
Learning Prompt ..........................................................................................................................83
Class Activity 11 ............................................................................................................................ 89
Session 12 ~ Manage follow up ................................................................................................... 92
Learning Prompt .......................................................................................................................... 92
Write and agree on performance improvement........................................................................ 92
Planning........................................................................................................................................93
Class Activity 12 ............................................................................................................................ 97
Session 13 ~ Manage follow up .................................................................................................. 99
Learning Prompt ......................................................................................................................... 99
Poor performance ..................................................................................................................... 100
Class Activity 13 .......................................................................................................................... 103
Session 14 ~ Manage follow up ................................................................................................. 104
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Learning Prompt ........................................................................................................................ 104

Provide support services and Counsel Individuals ................................................................... 104
Class Activity 14 ........................................................................................................................... 110
Session 15 ~ Manage follow up ...................................................................................................111
Learning Prompt ..........................................................................................................................111
Terminate staff in accordance with legal and organisational ...................................................111
Class Activity 15 ........................................................................................................................... 116
Assessment Matrix ......................................................................................................................... 117
Appendix—Competency review tool ............................................................................................ 119
BSBMGT502B Manage people performance ............................................................................ 119
Elements and Performance Criteria.......................................................................................... 120
Critical Aspect of Assessment .................................................................................................... 121
Required Skill .............................................................................................................................. 121
Required Knowledge .................................................................................................................. 121
Employability Skills ..................................................................................................................... 121
Reference list .................................................................................................................................. 122
BSBMGT502 Manage people performance Student Workbook v1.0 Page v of 128

Introduction
Purpose of the learning resource
This resource provides a theory and assessment framework to support the learning and
assessment of competency-based training within a collaborative relationship.
It supports and motivates self-directed learning via a learning partnership between:

 the learner
 the trainer/ assessor
 workplace training supporters such as:
- supervisors
- peers
- mentors
It can be used to support learners who are experienced workers seeking to gain formal
qualifications, newly employed workers aiming to develop skills and obtain formal qualifications
and those seeking training and/or qualifications to gain employment.
The resource is designed for self-paced learning and is also suitable for delivery in a workshop or
classroom. Depending on the category of learner and the delivery method, these materials
should be used differently.
Trainers/assessors should also provide supplementary Information including interpretation of the
contents of this resource. They should initiate with the learners discussion about the subject
matter and should encourage learners to contribute their own experiences and interpretations
of the matter. It is not necessary to work through the guides in the order in which they are
maintained, however, this is at the discretion of the trainer/ assessor,
Structure of the learning resource this resource consists of four parts:
1. Learning support materials
 Session by session
2. Assessment information
3. Appendix—Competency review tool
BSBMGT502 Manage people performance Student Workbook v1.0 Page 1 of 128

Learning support materials
This Section is organised session by session, so learners can, with the support of their trainer/
assessor, plan their learning and engage in activities. It is divided into sections which relate
directly to the learning elements for each unit. Each session contains:
 theory (information) as per Competency

 learning prompts
 assessment activities
 references
Theory is identified by this icon.

Theory provides information about the elements, performance criteria and essential
knowledge that apply to this unit. This information will assist the learner to
complete the assessment tasks required to achieve competency in this unit.
Learning prompts are identified by this icon.

Learning prompts are designed to encourage the learner to build upon the
underpinning knowledge which they have acquired by reading and reflecting upon
the theory provided. They may also encourage the learner to research additional
information and to expand their practicing of skills.
Assessment activities are Identified by this icon.

The activities should become part of a formative assessment. Trainers/ assessors
should have processes in place to provide feedback and reinforcement to learners
as they progress through the activities and the assessment processes. This is pivotal
to the learning experience. Assessment activities are also part of the learning
process, particularly Class activities such as demonstrations, group work or case
studies.

References are identified by this Icon.

Provides e list of references from which this learner guide was developed. This list
can also be used as additional reading material that can be accessed for further
information.
Assessment information
This Section provides the following:

 introduction to competency assessment
 unit information
Appendix—Competency review tool
This appendix consists of review tools for:

 Range statement
 Elements and performance criteria critical aspects for assessments
o required skills
o required knowledge
o employability skills
 These tools can be used for:
o Assessment mapping and validation
o Assisting the trainer to devise and facilitate learning activities and/or assessment
activities which build upon the underpinning knowledge acquired by reading
through, and reflecting upon, the text
o Recognition of Prior Learning (RPL)
 Evidence gathering end recording at any stage of the training

Learning support materials
Session 1 ~ Allocate work
Performance criteria covered in this session:
1.2 Develop objectives for performance-management processes to support organisational

strategy and goals and to build organisational capability
1.3 Design methods and processes for line managers to develop key performance
indicators for those reporting to them
Learning Prompt
Read through the material and look at the assessment activities.
After learners have read and understood the information provided they should take the
opportunity to practise the skills referred to within this section prior to undertaking the
assessment activities. Trainers/ assessors should give guidance in this regard.
This will enable learners to Develop objectives for performance-management processes to

support organisational strategy and goals and to build organisational capability and Design
methods and processes for line managers to develop key performance indicators for those
reporting to them.
Consult relevant groups and individuals
To manage people and ensure that work gets done as required, it is necessary to consult with a
range of people. As a result of the consultation process, it becomes possible to plan work arid to
identify the best allocation of resources, to make work plans and to identify resource needs
information is required.
Internal sources supply information about:
 vision and mission

 goals and objectives
o budgets
 resources—availability and procedures for acquisition
 current processes and process capabilities
 standards and organisational requirements
 waste, mistakes and rework
 levels of productivity
 Individual performance
 the internal customer-supply chain
 employee skills and competencies
 skill and competency gaps
 financial issues
 safety issues or conditions
 organisational culture and health
Externally generated Information might encompass:
 customer needs, wants and expectations around which your business must be structured
 supplier needs, wants and expectations
 customer satisfaction levels
 stakeholder expectations, issues or problems
 shareholder expectations, issues or problems
All of this Information will contribute toward the development of effective plans.
Consultative processes will enable managers and frontline managers to identify:
1. the individuals and groups who have the skills and knowledge needed to complete work
to the necessary standards
2. the resources that the various groups and individuals in the organisation will require so
they can do their work
Resources and resource management
Inputs are the resources and supplies that can be called upon to cater to a need and are essential
for operations.
Resources are:
 an available source of wealth

 a new or reserve supply that can be drawn upon at need
 a source of aid or support
In organisational terms, resources are the inputs that enable a business to operate and to
produce outputs. Inputs (resources) are transformed by the organisation's core processes into
the product/ service that are intended to achieve the outcome of customer satisfaction. If
customers are satisfied with the product/ service offered by the organisation, then the business
is sustainable.
Effective resource management is a key to high levels of production arid productivity. Resource
management implies accountability—ensuring that quality and quantity of workplace inputs
meet the organisation's needs, in response to customer and stakeholder needs and
expectations. It is, therefore, necessary when allocating resources to have a clear understanding
of the organisation's vision and goals and of the needs, wants and expectations of the customers
for whom the organisation provides its products/ services, Consultation with customers to
determine their needs, wants and expectations might take the form of face-to-face questioning
at the time that a product/ service is provided, customer/ client feedback surveys and forms,
market research, compilations of customer/ client complaints plus analysis of sales figures to
determine what is selling well and why it is selling well.
Resource management involves:
 recruiting suitably qualified managers and staff

 negotiating with consultants for the carrying out of specific tasks
 negotiating with other service providers for ongoing services
 negotiating with suppliers for products/ services
 monitoring inputs for consistency and quality
o ensuring that resources (Including information) are available where and when
they are needed
 ensuring that resources meet the standards of the organisation and its customers
 monitoring and assessing waste in order to reduce wastage arid manage waste
effectively
 This includes:
 optimisation and rationalisation of human resources
o capturing and assessing the knowledge base within the company
 determining whether the skills within your organisation are being fully utilised to give
maximum returns
 planning and measuring organisational capacity
o streamlining processes, consolidating data and taking control of resources
 efficiently and effectively sourcing and allocating
Many of these disparate processes have traditionally been labour intensive. In today's
technologically advanced climate, it is possible to automate most of these processes. Software
programs and consultancy services can help track and deploy resource costs. However, in order
to complete this unit of study, you will need to develop a clear understanding of some of the
applicable resource management processes and the reasons for their application.
Inputs/ resources are an organisational cost. In today's market with head-count reductions, tight
budgets arid the need for maximum productivity, the need for organisations to accurately arid
quickly plan for, and optimise their resources is vital. In this day and age, under pressure from
banks, global competition, stakeholders and shareholders, companies need to address all costs
arid manage them effectively. It is, therefore, important when allocating work to ensure that
resources are appropriately allocated and that they are available for as and when they are
needed consult with staff to determine their resource needs and it find the best methods of
distribution, disbursement and management.

Class Activity 1
1. Why is it necessary to consult relevant groups and Individuals on work to be allocated

and about the resources they will need?
2. What resources might be required in a business organisation?

1.2 Develop work plans in accordance with operational plans
1.3 Allocate work in a way that is efficient, cost effective and outcome focussed
Learning Prompt
This will enable learners to Develop work plans in accordance with operational plans and allocate
work in a way that is efficient, cost effective and outcome focussed.
Develop work plans
Introducing new and improved products/ services on a faster schedule is the path to success.
Given finite budgets and resources, the challenge becomes how to best allocate, coordinate,
plan and track the diverse programs and resources involved in product/ service development,
Introduction and distribution. Organisations must, in today's highly competitive and constantly
advancing market, got more products/ services to market sooner. They must continue to
improve their products;' services in line with customer needs and expectations. Revenue growth
will follow right behind. None of this can be done without the right resources and the right
resource management procedures.
The operation of core processes is, therefore, dependent on managers being able to bring
together the right mix if inputs. Recruitment, selection and employment of staff with a sound
knowledge and skills base are essential, operations (production) procedures must be designed
and put in place. Sources of raw materials must be found and contracts negotiated. Delivery
so that production needs are met.
Quality outputs require quality inputs,
Specific resources will depend on;
 the organisation's goals and objectives

 client/ customer needs and expectations
 the organisation's core processes
 the type arid volume of work done and outputs generated

 intended output and quality expectations
 Resource planning mechanisms include:
 budgets and forecasts
 human resource management plans
Information management plans and system design
 capacity planning
 manufacturing design and operations planning
 control processes
 facilities layout plans
 recording systems plans
 inventory control
 resource requirement plans
 maintenance (including preventative) plans
 risk assessment and contingency plans
 productivity plans
 plans for technological applications
 project plans
Each has a specific function within the organisation's systems and structure.
Resource plans require the use of all or some of the following resources or inputs:
 human resources
 recruitment, selection and induction procedures
 knowledge
 competence
 data and information from internal and external sources
 client/ customer information
 stakeholder input
 shareholder Input
 intellectual property
 processes and procedures, policies, operations, continuous improvement processes
labour
 time
 training and training materials
 coaching and mentoring
 technology
 raw materials
 manufactured products and parts
 plant, equipment and machinery
 consumable paper, toner etc.
 stock and supplies
 capital/ financial support arc` inputs
 location/ premises
 staff amenities
 vehicles/ transport and travel options
At the planning stage of operations management the resources and the methods of acquisition
required to enable availability of resources for production are identified. These are incorporated
into plans with the concomitant policies and procedures. Each organisation will have capital
expenditure plans, budgets, expenses plans, resource policies, quality and Inventory controls
which serve to ensure that resources and their allocations, meet requirements.
Budgets are generally used to allocate resource funds, unless there is dose alignment between
budgets, strategic plans, operational plans and actual operational needs, there might be little
connection between what the plans specify and what the budget provides by way of resources
to contribute to operations.
Effective relationships must be built between each of the components in the supplier-customer
chain, so that Inputs are provided as agreed arid optimum outputs are produced. Quality and
timeliness of supplies from external sources require the application of suitable planning and
management processes to ensure that employees are able to provide the end product promised
to the customer.
Consultation
It makes sense to consult with the people who use the resources to determine the best
deployment and acquisition methods. Employees who use resources on a day-to-day basis in
order to complete their work will be able to identify problems and, if encouraged to do so, will
be able to suggest improvements that will increase resource efficiency and effectiveness,
Employees know the job and the resources required to produce quality outputs.
Consultation involves employees and gives value and credence to their ideas and inputs by:
 making them feel valued

 encouraging ownership of improvement needs, problem solving and effective resource
management strategies
 making them aware that they contribute toward the big picture goal achievement of the
organisation
 enabling awareness of the goal setting and planning procedures required for success
 providing a means for communicating targets and objectives—employees cannot be
expected to meet resource management targets if they do not know what they are (this
includes targets relating to cost management, budget applications and waste
management) providing a link will enable realistic goals and targets to be set
 motivating higher discretionary input
Opportunities for individuals and work groups to contribute might include:
 meetings
 brainstorming sessions
 project groups
 budget and forecasting meetings
 specific asset/ resource target groups
 both formal and informal consultatIon5 with individuals and work groups
Clients/ customers and other stakeholders might also be consulted. Information gathered from
customers and stakeholders (surveys, face-to-lace discussion, complaint records, market
research etc.) provides the means for product and process design. Customer needs and
expectations must drive product design and distribution. It is the customer who determines
whether products/ services meet their perceived quality needs—not the organisation. Thus
resource acquisition and deployment is dependent on what the client/ customer needs, not on
what the organisation wants to produce.
Effective resource use will be reinforced by.
 supporting trained personnel so they can do their jobs without constraints generated by
o workplace systems and conditions
o encouraging serf-monitoring and self-management
 measuring and monitoring performance fairly arid equitably against known Key
Performance Indicators (KPIs)
 Involving people In goal setting, planning and resource monitoring—contribution to
continuous improvement
 ensuring that resource management systems make resources available as and when they
are needed
o developing and maintaining information sharing systems that distribute accurate,
current and reliable information in a timely manner
 preparing and implementing budgets that are understood by the people who must deal
with them
 remunerating all staff appropriately and providing acceptable working conditions—if
staff are not paid adequately or feel exploited they will not contribute to effective
resource management
o making everyone aware of costs and measures that can be implemented to save
costs and making cost saving measures realistic
Making the best use of knowledge and of human resources
An organisation is a group of people who come together to achieve business aims and objectives
that cannot be achieved by one person alone. Personnel, information and knowledge are,
therefore, key resources. Without them, there would be no need for physical resources, as there
would be no organisation.
These resources can be managed effectively through:
 high quality recruitment and selection processes to ensure that skilled, suitable people
are employed
 suitable induction, training and ongoing training to ensure that skills are applied in the
most useful ways
o staff deployment processes that match task and role allocations with employee
skills and with organisational needs
 performance assessments that ensure that skills are upgraded and personnel are valued
building trust and mutual respect based .relationships with all personnel
 letting the trained personnel do their jobs
 encouraging self-monitoring and self-management
 providing suitable leadership arid leading by example
 measuring and monitoring performance fairly and equitably against known KPIs
 Involving people in goal setting, Warming and contribution to continuous improvement
 reporting employee needs, including personal and professional development needs
 remunerating all stag approximately—the old saying that—you get what you pay for is
very true at work—pay peanuts and you get monkeys
 make everyone aware of costs and measures that can be implemented to save costs
 reward and acknowledge employee contribution and work
 make cost saving measures realistic
 Open up two-way communication channels throughout all organisational levels and
flatten hierarchical structures
 Pay attention to improving organisational health
What does this achieve? Staff who feel valued, care about their work and are happy to
contribute. Satisfied staff will stay with the organisation arid so will the knowledge (skills) base.
Re-hiring and retraining costs will diminish. The cost of mistakes, rework and misuse of resources
will diminish. Safety issues—accidents and incidents—and associated costs will decrease.
Productivity, therefore profitability, will increase.

Class Activity 2
1. What are the likely repercussions if resources are not available to employees as needed?
4
5
10
11
12

1.4 Confirm performance standards, Code of Conduct and work outputs with relevant
teams and individuals
Learning Prompt
This will enable learners to Allocate work in a way that is efficient, cost effective and outcome
focussed. Confirm performance standards, Code of Conduct and work outputs with relevant
teams and individuals.
Develop work plans in accordance with operational plan
To make the organisation's processes work properly, management must:
 plan
 collect and analyse data and information
 monitor, assess, evaluate and record customer needs and expectations
 design and implement effective human resource management techniques
 develop efficient core process management procedures (controls)
Successful organisations;
 have clear and well communicated vision and goals

 plan effectively and have clear and communicated performance expectations
 assess and evaluate risk
 recruit and value diversity

 continuously monitor, evaluate and it prove processes and interactions in both Internal
and external environments
 see and accept change as opportunity—move toward, not away from., change
 actively seek Information from clients customers and business activities around a true
customer focus
 manage people and workplace relationships in ways which encourage participation and
increased discretionary effort
 implement effective systems and structures to support organisational processes and the
people using them
 reward and acknowledge the contribution of employees
 encourage creativity and reward and acknowledge new Ideas
 freely share information and resources
 manage conflict and encourage creative conflict
 have clear and transparent policies and processes which are both adaptable and flexible
o consistently match what they say to what they do and Interact ethically with
employees, stakeholders and the world
 continuously improve/ increase their knowledge base by utilising internal and external
information sources
Every person in an organisation is employed to deliver results (outputs) which contribute to the
organisation as a whole. Effectiveness is judged by the extent to which internal and external
customer demands for outputs are met. In the long run everyone is measured against whether
the customers' demands and their many and varied expectations for outputs have been satisfied,
Operational plans
Successful organisations also make plans that drive work operations.
Work plans are operational plans. They are the plans that are made to determine what will be
done, when and how it will be done and by whom it will be done.
Planning is the process of identifying work goals or targets then determining what steps you will
take, when you will take them and how you will take there, in order to achieve the goals/ targets.
It asks the question: 'What things must we do now in order to attain our objectives tomorrow
and into the future?'
In organisations there a number of planning functions—all of which are intended to achieve

specific outcomes for the organisation,
The business and strategic plans for an organisation have an external focus, that is, they relate to
the intentions and aspirations for the organisation as a whole and should show real potential for
innovation and continuance. Within those external plans are the internal planning devices used
to inform production and management so that the outputs of the organisation and all of its

sections meet customer needs and expectations, thereby supporting the organisation's business
goals—the plans for directing and controlling operations. Plans enable the design arid
development of controlled and directed strategies. Uncontrolled and undirected activity does
not achieve, Task-focused planning acts to inform and coordinate employee roles
Planning reduces uncertainty by helping organisations anticipate and manage the constant
change inherent in the business world of today and Identification of work goals and objectives
enables effective resource allocation and use.
In all business situations there is a risk, will this work, can we afford to do this, can we afford not
to do this, what should we change, how can we improve? Plans identify benefits vs. costs and
support risk management. Planning also provides the measures and measurement criteria which
map individual, team/ section/ divisional success against the organisation `s goals.
Planning must lead to action. Once you make plans, implement them.
Operational plans are day-to-day action plans. Organisational and strategic plans are broken
down to accommodate specific operations processes so that they fit with divisional, sectional,
team and individual functions.
Operational plans are internally focused and relate to:
 organisational structure
 management teams
 management gaps
 strategy Implementation
 process designs
 control and direction
 production
 productivity
 milestones
 using workforce and work hours effectively and efficiently
 workload ratios
 deployment of technology and other resources, including human resources
 budgeting and forecasting within departments! sections
So it can be said that planning looks toward what you want to achieve, what you can do to
achieve it and, importantly, what might happen you are moving toward achievement. Roth long-
and snort-term projects and activities—large and snarl—require adequate planning. Frontline
managers convert corporate, strategic and divisional plans into real action in the workplace. They
supervise, monitor and support the work of others, therefore, need to have an understanding of
planning processes as well as of the actions that result from plans, Process design and
performance measures in an organisation must be results oriented and effective;

Performance management plans and systems
To achieve all this performance Management plans arid systems are necessary. Performance
management is the process of aligning the activities of people in the workplace with the
achievement objectives of the organisation. Controls refer to the process of controlling work,
not of controlling people.
Performance management systems enable management to track, monitor and evaluate work to
ensure that it is contributing toward the success of the organisation. They can involve
documented performance plans for Individuals, directly relating to team arid organisation
objectives. Informal systems can also be developed by frontline managers, for Individuals and/or
the work team. These might be additional to or instead of formal plans.
Performance management therefore is the process of communication between manager and

employee that results in mutual understanding of what the employee is to be doing during the
next period of time. This generally includes setting performance objectives and standards to help
the business make efficient. Use of financial, human, material and other resources.

Class Activity 3
Why an Operation plan is necessary to achieve the organisational goal?
GOAL Impact of Operational Plan

Confirm performance standards, Code of Conduct and work outputs with relevant
1.4
Develop and agree performance indicators with relevant staff prior to commencement
1.5
of work
Learning Prompt
This will enable learners to develop confirm performance standards, Code of Conduct and work
outputs with relevant teams and individuals and develop and agree performance indicators with
relevant staff prior to commencement of work.
Allocate work in a way that is efficient, cost-effective and outcome focused
Work must be goal and target oriented. Managers and their employees need to set goals that are
realistic, achievable and have timeframes attached. Large goals can be broken into smaller
components (steps) to which specific timeframes are attached so they become milestones. This
enables work to be allocated and to be monitored and measured as it progresses. When
allocating work, the competencies and availability of staff must be considered so that work is
allotted to those who are best equipped to do it.
It will be necessary to determine how work will be undertaken, specify the required outputs and
ensure that employees understand the relationship between outputs and outcomes. Cost
management processes—in terms of effective use of resources (including staff, supplies and
time) must be clarified and agreed upon.

Identify any priorities or critical activities and allocate resources so that the best use is made of
what is available.
Work must be allocated on a fair basis taking account of employee experience, expertise, skills,
knowledge, understanding and workloads. The allocation process might involve verbal
instruction and agreement, or written instructions which outline employee tasks and output
responsibilities.
Employees should be fully briefed and given the opportunity to ask questions, seek clarification,
and make suggestions which are heard and properly considered. Ensure that they understand
the level of performance expected (KM) and that they understand the performance
management processes (monitoring and evaluation) that will apply to the work they do.
Provide prompt and constructive feedback and reinforcement. Support employees in identifying
and dealing with problems and unforeseen events.
Where necessary, provide additional support and/or resources to aid productivity, completion of
work and fulfilment of output targets.
Skills that will be required when allocating work include:
 Leadership
 goal and objective setting
 collaboration
 planning and organisational skills
 information management
 prioritisation
 decision-making
 communication skills
 interpersonal skills
 active listening
 ability to provide effective feedback
 monitoring and reviewing
 ability to enthuse others
 delegation
 ability to provide appropriate support
o problem solving
o conflict resolution
 coaching/ mentoring/ training
 stress management
 performance management
 cost and waste management

When allocating work:
 allocate work according to availability of resources and skills of employees

 optimise the resources and the skills of the employees available to meet organisational
objectives
 clearly define group/ team and individual responsibilities and limits of authority
 make sure employees understand their own responsibilities and limits of authority, and
those with whom they work closely, in order to avoid possible conflict, duplication or
omission of Important responsibilities
 provide learning and developmental opportunities for employees, within tar., work
allocated
 provide opportunities for employees to develop new skills that they will need in the
future
 brief employees on their work in a manner and at a level and pace which Is appropriate
 inexperienced or less confident people might need a more detailed briefing on their
responsibilities and work than their more experienced and self-assured colleagues
o encourage people to seek clarification
o check on their understanding and give them opportunities to ask questions
o provide access to people who can help them meet their objectives (colleagues,
managers, specialists and external advisers to help them meet their work and
developmental objectives)
 provide the right level of supervision and delegate authority appropriately—some team
members will require much closer supervision than others
 ensure that work allocations are realistic, fair and with the capacities of staff
 consult with staff regarding resource needs
 carefully calculate the time, cost and criticality of the work to ensure appropriate
resources are allocated
 if the way the work is allocated proves to be unrealistic or organisational change,
reallocate work whilst minimising any detrimental impact on time or cost
 monitor costs
 monitor work
Action plans
General work allocations might require that employees draw up to do lists—the lists that aid
them in organising and prioritising their tasks so that the work they do focuses on specific
outputs. There will be instances, however, where to do' lists are supported by action plans.

Action plans can be used to allocate work. Action plans are documents that are drawn tip in
consultation with the employees who will do the work, Action plans guide the implementation of
business activities and/or process improvements. They are outcome focused; therefore, the
attached goals and objectives must be clearly defined. They contain task assignments,
milestones, timelines, resource allocations, data collection methodology, and evaluation criteria,
Action plans are used when a larger, more complex project plan is not necessary.
Managers/ leaders must take into consideration, when drawing up action plans, the
competencies of the various staff members to be involved, the interests of the staff members,
their availability and the likely outcomes of involving specific employees,
Action plans outline what will be done, how it will be done, by whom it will be done and the
timeframes and deadlines that apply and the resources (including time, information and
personnel) that will be required. The plan will outline what needs to be done and who is
responsible for the various implementation aspects of the plan. Giving employees responsibility,
accountability and delegating appropriately are all processes which will Increase involvement,
commitment and enthusiasm for the achievement of specific outcomes. Identifying roles and
responsibilities of individuals and task specific activities enables tracking of achievement and
identification of what needs to be completed next.
Prioritise objectives and plan work to make best use of time and resources so that specific
outputs are produced with realistic time constraints.
What How Who When Benefits Responsibility
Actions; Resource W ho will

Time
Steps in the Method of and Expected undertake to or be
frame and
process of achievement support Outcome for responsible for
deadlines
Implementation required the pr oc es s ?
Action 1
Action 2
By drawing up an action plan it becomes possible to monitor each step in the implementation
process and to assess effectiveness as you go, Employees are able to see what they are achieving
as they achieve it.
Ensure that when utilising action plans accommodation is made to recognise good work and to
celebrate successes along the way.

Resource management
Resource wastage is an area that needs to be carefully managed, Resources are costs—every
resource utilised by an organisation costs money—staff, raw products, paper supplies,
technology, time etc. To maintain costs at an acceptable level, resources must be used in the
most effective ways—so that use is maximised arid expenditure Is minimised, Staff should learn
to manage the work they do in ways that do riot needlessly waste resources and work
allocations roust allow for the most effective use of resources.
There must, of course, be balance – Resources must be available at the quality and in the
quantity required for everyone to complete their work. It is necessary to negotiate the best
possible prices for resources; yet, mistakes, rework, misuse and misappropriation of resources
should be monitored to ensure effective use. Each organisation will have, in placer systems
intended to achieve this.
For example:
 effective inventory management systems

 disbursement systems which enable resource tracking
 cost management systems and budgets applicable to resource supply etc.
 Areas that should be monitored are:
o supply quality and costs
o maintenance and unexpected down-time
o staff turnover, absenteeism and satisfaction revels
 process design
 production times
o output quality
 disbursement systems
 security
o relationships throughout the supplier-customer chain
 occupational health and safety
 training, development and learning for all personnel
When planning work and allocating tasks to employees and employee groups or teams,
efficiency, productivity, cost management and outcomes must all be considered.
Project plans
In some cases it will be necessary to use project planning to allocate work. A project plan is a
formal, approved document used to guide both project execution and project control. It is used
in situations where a major or important objective (that is not necessarily a normal part of work)
is to be achieved. It can bring together, for the duration of a certain project, a group of
employees who do not generally work together.
The primary uses of the project plan are to document planning assumptions and decisions,
facilitate communication among stakeholders, and document approved scope, cost, and
schedule baselines of a proposed project. The plan is, therefore, a description of what is to be
done, what funds are available, when it will be done and by whom. It covers the entire set of
tasks that a project requires and allocates the different aspects of the project to the employees
who are best equipped to produce the required outputs. It states how and when a project's
objectives are to be achieved and shows the major products, milestones, activities and resources
required on the project.
Project schedules such as Gantt, PERT and milestone charts might be used to identify objectives
and their relegated timeframes. The plan might be accompanied by procurement plans or
construction plans, or these aspects might be detailed in the project plan itself, The plan will
outline, among a number of other things, who will be involved, what their responsibilities will be
within the project, how their work will be organised and what outputs are expected. Work
allocations will be based on the same criteria—experience, expertise, project need, availability,
Interest etc.—applicable to any other work allocation process.

Class Activity 4
1. What procedures might be followed to allocate work?
2. When might a project plan be used to allocate work?

Confirm performance standards, Code of Conduct and work outputs with relevant
1.4
Develop and agree performance indicators with relevant staff prior to commencement
1.5
of work
Conduct risk analysis in accordance with the organisational risk management plan and
1.6
legal requirements
Learning Prompt
This will enable learners to confirm performance standards, Code of Conduct and work outputs
with relevant teams and individuals and Develop and agree performance indicators with relevant
staff prior to commencement of work. Also conduct risk analysis in accordance with the
organisational risk management plan and legal requirements.
Performance standards, code of conduct and work outputs
Performance Standards
A performance standard is a management-approved expression of the performance

threshold(s), requirement(s), or expectation(s) that must be met to be appraised at a particular
level of performance. A Fully Successful (or equivalent) standard must be established for each
critical element and included in the employee performance plan. If other levels of performance
are used by the appraisal program, writing standards for those levels and including tem in the
performance plan is not required by is encouraged so that employees will know what they have
to do to meet standards higher than Fully Successful.
While performance elements tell employees what they have to do, the standards tell them how
well they have to do it. The first article in this series defined and reviewed the characteristics of
critical, non-critical, and additional performance elements. This article reviews the principles of
writing good standards that can be used effectively to appraise employee performance of those
elements.
Performance standards should be objective, measurable, realistic, and stated clearly in writing
(or otherwise recorded). The standards should be written in terms of specific measures that will
be used to appraise performance. In order to develop specific measurers, you first must
determine the general measure(s) that are important for each element. General measurers used
to measure employee performance include the following:
 Quality addresses how well the work is performed and/or how accurate or how effective
the final product is. Quality refers to accuracy, appearance, usefulness, or effectiveness.
 Quantity addresses how much work is produced. A quantity measure can be expressed
as an error rate, such as number or percentage of errors allowable per unit of work, or as
a general result to be achieved. When a quality or quantity standard is set, the Fully
Successful standard should be high enough to be challenging but not so high that it is not
really achievable.
 Timeliness addresses how quickly, when or by what date the work is produced. The most
common error made in setting timeliness standards is to allow no margin for error. As
with other standards, timeliness standards should be set realistically in view of other
performance requirements and needs of the organization.
 Cost-Effectiveness addresses dollar savings to the Government or working within a
budget. Standards that address cost-effectiveness should be based on specific resource
levels (money, personnel, or time) that generally can be documented and measured in
agencies' annual fiscal year budgets. Cost-effectiveness standards may include such
aspects of performance as maintaining or reducing unit costs, reducing the time it takes
to produce a product or service, or reducing waste.
Code of conduct
A code of conduct is a set of rules outlining the responsibilities of or proper practices for an
Individual or an organisation. It contains descriptions of the principles, values, standards, or rules
of behaviour that guide the decisions, procedures and systems of an organisation in a way that
(a) contributes to the welfare of its key stakeholders, and (b) respects the rights of all
constituents affected by Its operations.
A code of conduct provides a guide to staff, for appropriate behaviour. It will not cover all issues
that arise, but will provide a framework within which staff can address behavioural and ethical
issues, which might relate to business transactions, interactions with external stakeholders and
to Interactions within the organisation.
The code establishes standards by which staff and management conduct themselves towards
other staff or colleagues, government authorities and the general community and perform their
duties and obligations. A code of conduct is generally established on the following organisational
values: Integrity, honesty, conscientiousness, compassion, courtesy, fairness, and respect. The
successful development of an ethical environment relies on Individuals being responsible for
their own professional behaviour within the provisions of the code and for compliance with the
legislation (national, state and local government) that Impacts on the organisation and the work
done. Where there is doubt as to the application of the code, or the appropriate course of action
to be adopted, staff affected should discuss the matter with their supervisor,
-The code of conduct should be understood by all employees and will impact on the way they do
their work and on the performance standards expected of employees.
Performance standards
When confirming, with staff, the performance standards of work outputs required, the following
should be considered:
 Controls
 Productivity requires the appropriate design and application of controls to:
 provide direction
 determine and maintain quality
 determine and maintain quantity requirements—the quantity turned out in a given
amount of time with a given input of work
 maintain standards—including machinery maintenance and worker safety
 balance economy against outputs, le the efficiency with which resources are used
Controlling work processes means controlling work—not controlling workers, Control Is a tool of
workers and must never become an impediment to working. Hierarchical management
structures which demand intimidating or complex reporting procedures, excess paperwork etc.
can be seen as impediments to work. Controls are used to make processes run smoothly and
efficiently, according to the required standards, they maintain activity (operations) within a
permissible range of deviation with the minimum amount of effort. In this context, control refers
to direction not restriction.
All organisations require control and monitoring systems that enable precise tracking of
resources—purchase, supply, storage, allocation and use, Monitoring and evaluation systems
contribute to cost effectiveness. Resource planning can be measured and assessed against
actual costs and against identified shortfalls, the requirements of operating plans can be
measured against actual resource consumption. Methods of allocation and disbursement within
the organisation should be monitored to ensure that methods, systems and resource quantities
and quality meet the expected outcome standards, Accurate and timely reports, complied in
consultation with the employees who utilise the resources, contribute to the organisation's
ability to maximise resource use.
Financial monitoring
Organisations apply financial controls in order to monitor progress. The most common controls
are activity or cost-centred budgets and actual expenditure reports or financial statements for
the activity or cost centre. Expenditure reports are balanced against budgets to identify variance,
its causes and corrective actions.
As a control and monitoring tool a budget enables assessment of success in various areas—are
we under, over, or on budget? Figures which are updated and revised as events occur show the
organisation's performance relative to a specified timeframe—last week, last month etc.
Budgetary monitoring shows where there is a need to revise a forecast and acts as an early
warning system for danger and poor performance. Performance against budget should also be
viewed as a warning system for opportunities—for performance that is better than expected
and should, therefore, be analysed and where appropriate, reproduced.
In most organisations a business manager or accountant will be responsible for the

organisation's financial management. However, this is usually achieved through Input from the
various cost centres which are the units, sections or divisions in an organisation which carry
accountability for their own expenditure. Such responsibility might relate to day-to-day
operations or to the management of specific projects. Smaller organisations will probably not be
broken 1-ito separate cost centres.
Examples of cost centres:
 administration
 manufacturing
 marketing
 sales
 production
Financial information (records) relating to costs, operations, credit analysis, inventory

management, invoices and accounts etc. enables management to monitor and control cash flow,
production and productivity, solve problems, plan for continuous improvement, Implement
quality control procedures and plan future strategies.
Data collected to inform and to monitor budgets will depend on:
 the required reporting period (monthly, quarterly, annually, upon request etc.)
 the uses to which the report will be put
o oganisational communication needs

 planning requirements
o statutory, taxation and legislative requirements
Financial measures relate to:
 cost of raw material

o revenue from goods sold
o activity-based costs such as material handling, manufacturing, assembling, etc.
 Inventory holding costs
o transportation costs
o cost of expired perishable goods
 penalties for incorrectly filled or late orders delivered to customers
o credits for incorrectly filled or late deliveries from suppliers
 cost of goods returned by customers
 credits for goods returned to suppliers
It might, therefore, be necessary to ensure, that as part of their duties, employees collect and
collate data that will contribute to the development of budgets and to the monitoring of
budgets.
Supply performance measures
Supply chain performance measures can be classified broadly into two categories: qualitative
measures (such as customer satisfaction and product quality) and quantitative measures (such as
order-to-delivery lead time, supply chain response time, flexibility, resource utilisation, delivery
performance, etc.). Obviously, both of these categorical measures can only be met if the
resources on which operations are based meet with panned expectations. Where shortfalls are
identified, the problems must be acknowledged, owned and solved.
Non-financial performance measures
Important metrics include: cycle time, customer service level, inventory levels, resource
performance (including the performance of human resources), flexibility, and quality.
Cycle time or lead time is the end-to-end delay in a business process—the time it takes for
resources to reach you plus the order-to-delivery time (the time elapsed between the placement
of a customer order and delivery of that order—for product or service). Lead time and order-to-
delivery time are not only a manufacturing responsibility. They apply in all industries and
regardless of the type of sales process. Effective resource management involves measuring and
evaluating cycle times, to minimise constraints, so that you can plan resources in ways that
decrease cycle time. Cycle or lead time is, therefore, directly related to resource plans and to
inventory. It is also tied to supplier relationships, Monitoring and reporting systems should be
utilised to ensure that each of these processes is meeting the needs of the organisation and of
the customer.
Lead time in supply chains is dominated by Interface delays due to delays between suppliers and
manufacturing plants, between plants and warehouses, between distributors and retailers, etc.
Lead time compression is extremely important because of time-based competition and the
correlation of lead time with inventory levels, costs, and customer service levels.
Customer service levels
 Customer service level is a function of several different performance indices:

o order fill rate (the number of customer demands met from stock)
 stock-out rate (orders lost due to a stock-out)
 backorder level (the number of orders waiting to be filled)
 probability of on-time delivery (the fraction of customer orders that are fulfilled on-time
according to specifications, within the agreed upon due date)
o acceptable product/ service quality (the number of orders that are accepted as
meeting customer satisfaction expectations, le not discarded, rejected or
returned)
In order to determine performance related to customer service levels, you might ask:
I. Do we have stock-outs occurring? How often? Why?

II. Do we have quality problems with materials? Why?
III. Do we have out of date or obsolete materials stock? How much? Why?
IV. Are materials damaged in storage and handling? Why?
V. Are materials stored in the wrong locations? Why?
VI. Are there better ways to store and handle? Should this be investigated?
VII. Is scrap/ waste increasing/ decreasing? Why?
VIII. Do we have unexplained stock losses? Why?
IX. Is the workplace clean, tidy and safe and making work and resource access
efficient?
X. Do we have equipment failures and down-time? How often? Why?
XI. Are the processes used to record and report on resources both efficient and
effective?
XII. What degree of control have we got over resource costs?
Other questions, relating to plant and equipment that should be asked Include:
I. Do we record dates and reasons for equipment/ service failure?

II. What are the reasons for equipment/ service failures? Do we know?
III. Do we have regular maintenance schedules for equipment?
IV. Are we using equipment to its practical capacity? If not, why not?
V. Can we improve layout or work flows? How?
VI. Do we have equipment that should be replaced?

VII. Does the organisation's technology support the best possible use of resources—
physical, human, information, plant and equipment?
VIII. Do we record equipment or service failures and regularly review service and
operational methods?
IX. Do we have control of plant, equipment and resource costs?
Also ask:
I. What do customers/ clients think of our service? Do we know?

II. Have we investigated ways to improve service? Flow and how often?
III. Do employees have the skills required to operate efficiently?
IV. Are jobs and responsibilities according to skills and ability?
V. Are employees flexible and trained to handle different jobs?
VI. MI employees accept responsibility?
VII. Are tasks and responsibilities delegated appropriately?
VIII. Are employees motivated, and involved with their work?
IX. Are employees innovative, willing to try new ideas and prepared to accept
change as an opportunity?
X. Do leaders set a good example in every way?
XI. Is good work and contribution of employees recognised and rewarded?
XII. Are goals arid performance objectives clear and agreed?
XIII. Is there low absenteeism, low staff turnover, and good time-keeping?
XIV. Should we have regular meetings with employees and cost centre personnel to
discuss activities influencing our resource use?
XV. Do our internal customer service levels and internal resource management
practices enable high customer satisfaction levels?
Each of these questions can be answered if there are efficient monitoring and evaluation
processes, reporting and recording processes in place. The answers can be user/ to assess how
and whether your organisation manages resources in ways that meet customer satisfaction
requirements and to identify problem areas in need of Intervention.
Quality
One of the important aspects of the input/ output process and in mapping resource
management against customer satisfaction is the quality factor. Quality inputs make it possible
to produce quality outputs. Quality outputs, in turn, will, provided the organisation has designed
the transformation processes around customer and stakeholder needs and expectations
(customer focus), meet customer satisfaction demands. Organisational success is dependent on
customer/ stakeholder satisfaction. Quality and the management of quality can be complex
issues and there are a number of approaches toward quality management that organisations can
undertake. At this stage it might be a good idea to determine what quality is and how it can be
managed.
It must be stressed that quality is not determined or defined by the producing company. It is
determined by the client/ customer. The quality requirements of a product or service are
determined by the degree to which the product or service meets the expectations and the
perceived value a customer attaches to them. Customer focused work cultures recognise that, as
customer relationships are vital to success, the customer is actually driving the business. If you
do not provide, now and into the future, what the customer needs, someone else will.
Quality management and continuous improvement are virtually synonymous, In that you cannot
have one without the other. Continuous Improvement refers to the processes you initiate in
order to maintain a competitive edge. This can only be done through efficient and effective
quality management practices which emphasise customer focus. Quality improvements act to
decrease errors arid make efficient, effective use of people, materials, technology and time—
resources.
Quality management and continuous improvement should be supported by each and every
process in the organisation; understood and supported by every individual within the workplace.
The following three quality systems approach quality from slightly different perspectives, but the
ultimate aim for each is to rationalise resource usage, reduce waste and Increase product/
service standards. Your organisation will select the system that most suits its needs.
Total Quality Management (TQM) incorporates all the principles of quality. It requires
commitment, by everyone in the organisation, to excellence and continuous improvement. TQM
constantly challenges the status quo and insists that everything an organisation does, and how it
does it, can be done better. It is an investigative process that utilise feedback from all processes
to identify problems and opportunities and increase/ improve productivity and profitability.
There is no end point to continuous improvement.
Quality control can be managed, to a degree, through simple inspection processes. Product/
service requirements and standards are set and the product or service is examined to assess the
degree of conformity. Output that is acceptable is distinguished from poor quality output. Below
standard or unacceptable outputs are scrapped or reworked. Variation is monitored and
processes put in place to ensure that improvements to end product occur.
The purpose of a quality assurance system is to assure the customer that the organisation's
products or services fit the purpose for which they are intended and will consistently meet
customer expectations. To be able to give this assurance, an organisation's quality system must
be in line with agreed standards, there are both International Standards and Australian
Standards for quality systems.

Quality assurance programs provide documented evidence that the organisation has control of
its business. A coordinated quality plan is developed for the organisation as a whole, with fully
documented control processes, the methods used to implement them and results
measurements. This provides an integrated and thorough approach towards the implementation
a quality, underscoring the prevention of unacceptable output rather than detection after the
event.
Australian Quality Assurance Standards require specific procedures for documenting an

organisation's operations—generally a three part system:
1. A quality manual identifies the organisation's policy and quality objectives,

outlining the controls that are in place in all operations areas, e.g. management,
purchasing training, OHS etc.
2. A procedures manual identifies responsibility, authority, processes and
procedures—the who, what, when, where, how and why of the organisation's
operations.
3. Detailed work instruction manuals inform personnel of roles, responsibilities and
methods of work so that they are clearly understood (often an approved supplier
manual will form the fourth part of the system).
What has come to be called 'Lean Manufacturing' is also a continuous improvement! quality
management system which requires involvement of company managers, supervisors and all the
employees, It is based around the development of a continuous improvement tears which
(possibly in consultation with experts) maps operations then uses the information gathered to
identify improvement opportunities.
Lean systems analyse the flow of information and materials in a manufacturing or business
environment to make improvements and achieve enhanced value for the enterprise. They
embrace a philosophy of excellence that includes the elimination of waste or non-value added
activities, while adjusting the production flow of the product according to customer demand.
They use the building blocks of:
 standardised work
 workplace organisation
 visual controls
 effective plant layout
 quality at the source
 batch reduction
 teams
 customer demand-based manufacturing
 point-of-use storage, quick changeover
 one-piece flow
 cellular manufacturing

 reduced task time
Lean manufacturing applies the modern elements arid technologies of scrap (waste) reduce,
process improvements in machining and tool selection (or operations), as material selection and
set-up diminution to cost reduction activities, (Lean manufacturing is also known as the TPS,
agile manufacturing, flexible manufacturing, pull system, flow manufacturing, world-class
manufacturing, synchronous manufacturing.)
Quality management systems are used to monitor and report on resource use.
B5BMGT5D2B: Manage people performance
They are important to resource management because they:
 Increase organisational effectiveness

 increase profitability
 reduce costs due to less waste and rework
 monitor resources to ensure that quality standards are maintained in the supplier-
customer chain
 ensure resources meet the needs of the organisation's input/ output processes
 Offer the potential to charge higher prices and increase profit
 enable the organisation to maintain its competitive edge
Each person and each activity in an organisation interacts with, and has an effect on, others.
Constant Improvements—to resources, processes, systems and outputs contribute to the
upgrade of organisational outcomes with regard to customer satisfaction and customer
retention,
Poor quality management systems result in resource wastage. As an Integral component of

quality management toe ability to source, access, distribute and utilise resources in the most
cost-effective ways—should be something that all the organisation's personnel are aware of.
Encourage employees to self-monitor resources, so they can manage waste, Provide training so
that employees can do their jobs well, reducing mistakes and rework.
Measurement processes
Many performance appraisal systems fair because they do not make the crucial link between
strategy and daily actions and operations. They focus attention on tactical Feedback and control
of short-term operations. A good performance appraisal system provides a comprehensive
framework that translates an organisation's vision and strategy into a coherent set of outputs,
performance measures and targets. By developing a set of outputs, measures, targets and
feedback systems for the leadership team, and then cascading these down the organisation in

such a way that they are localised, meaningful, understood, owned and aligned, the link between
the organisation's strategic goals and the daily actions of the people doing the work can be
made.
Resource allocations, annual budgets and strategic decisions can be driven by the strategy.
Performance reviews can be used to monitor individual performance which In turn monitors
organisational performance. Reward systems can be designed to reward organisational
performance achievement. The vital links between what people are doing on a daily basis and
strategic goals can be made. A good performance appraisal system must mobilise the people in
the organisation in such a way that their daily activities bring them closer and closer to strategic
goal achievement. The performance appraisal system must be a systematic process to
improvement strategy.

Class Activity 5
Q1. Explain what a code of conduct is and how it might affect work outputs.

Q2. In what ways might it be possible to confirm work outputs with relevant teams and
individuals and what things might be considered in terms of work outputs?

Session 6 ~ Assess performance
Design performance management and review processes to ensure consistency with

2.1
organisational objectives and policies
2.2 Train participants in the performance management and review process
Learning Prompt
This will enable learners to design performance management and review processes to ensure
consistency with organisational objectives and policies and train participants in the performance
management and review process.
Design performance management and review processes
Planning pulls data together to form information for conversion into organisational knowledge—
the knowledge that is used to ensure that the organisation archives objectives. Operational plans
are the actionable plans that make it possible for work to be enacted in a purposeful way. A vital
part of planning operations, therefore, involves the identification and determination of work and
performance standards.
Robert and David Norton (1990, state that If you can't measure it you can't manage W.
Operations management therefore relies, to large extent, on measurement—the process that
enables a determination that work is achieving the required outputs and the outcomes necessary
for success.
When measuring work you are asking the questions;
1. Are we doing this well?

2. Are our processes and procedures enabling our outputs to meet the
predetermined standard?
3. Is our quality of work and of product/ service consistent?

4. Do our actions match our plans?

5. Can vie do this better?
Measurements relate directly to performance standards. Performance standards might take the
form of Identified and agreed Key Results Areas (KRAs) and KP1s. For performance standards
and measures to be effective there should be consultation and agreement between
management and the people in the organisation who are expected to achieve the standards. The
likelihood of standards being reached and even exceeded is much higher when there is
consultation and agreement with relevant personnel than if the standards are simply imposed
upon them.
Organisations wanting to measure work should develop a comprehensive set of measures or

indicators to:
 establish and clarify performance standards so that all personnel know what is expected
 enable measurement and comparison of performance against objectives
 enable measurement and comparison of performance against benchmarks
 identify performance gaps—areas for improvement
 identify successful operations areas
 capture the factors that lead to improved customer, operational, and financial
performance through understanding of current successes, problems and projections
Employees should be Involved in the development of the performance standards to which they
must adhere and these measures need to be identified and agreed upon with relevant staff prior
to commencement of work so that work performance can be properly managed.
In setting those standards it is necessary to;
 identify and understand organisational goals

 identify specific work targets and objectives
 identify and agree on expected outputs and outcomes of work
 determine what aspects of your performance need to be measured, monitored and
evaluated
 identify and agree on measurement criteria—KPIs
 collect data and information that will aid in measuring and assessing your performance
 use feedback and performance assessment information to continuously improve
performance.
Performance indicators (KPIs)
Performance Indicators are the measurable characteristics of performance that should capture
factors that lead to improved customer, operational, and financial performance. They are the

predetermined work standards that are expected of individuals and groups. They Include
measures of work outputs, productivity, relationship building, internal and external client/
customer service and resource management or use.
Performance standards are based on`
 n knowledge of customer needs, wants and expectations

o the capabilities (skills, knowledge, expertise) of management and staff
o general practice within the industry
 process information from industry groups, government bodies, unions, employees and
training institutions
 the learning opportunities available to management and star
 designated quality standards
 benchmarking practices—comparisons with competitors and other similar industry
groups
 world's best practice data/ Information
 the cost effectiveness of all services that make up the input to an organisation
 the actions that are directed to providing customer service and quality output
 the effectiveness of processes and systems—capacity, stability and performance
o team/ section/ division and individual work performances
o innovation and inventiveness In all sectors of the organisation
 resource use
 waste, mistakes and rework
o supplier performance
 customer satisfaction
 organisational health and employee satisfaction
 business results
o budgetary performance—costs against outlays--profitability
KPIs point to what needs to be achieved.
The methods of achievement (processes) will be determined by the available resources:
money
personnel
information
other inputs
Agreement
Employees need to agree that the KPIs applicable to their work are realistic, achievable and
relevant to the work they do. They also need to clearly understand the ways in which they will be
utilised, if they do not understand the KPIs or understand how they will be applied, then it will be
very difficult for them to match their work to the required standards. Standards can be neither
measured nor adhered to if the people working in the organisation do not know what they are or
what the purpose of their work is. If the KPIs are unrealistic or unachievable then employees will
be de-motivated, that Is, they will not bother to make the effort to achieve them as they know
that the effort is pointless.
KPIs offer meters for poor performance which needs to be addressed. They also indicate areas of
current and ongoing success. Where successes are identified this information can be used to
improve other processes and to develop new processes. Poor performance (or performance
which does not meet the predetermined and designated standards) can be addressed through
counselling, training, coaching and mentoring procedures. KPIs also provide for the
measurement of good or outstanding performance. Where employees reach and/or exceed the
required standards, this should be acknowledged. If it is not acknowledged they will soon learn
that it is not worth making any extra effort.
Make performance measures relevant by linking compensation, rewards and recognition to

performance measures. Link targets to appraisals, this makes managers, teams, and employees
at all levels of the organisation responsible for their contributions and causes them to focus on
local activities that directly affect strategic measures and objectives. Managers, teams and the
individuals in them should be accountable for the resources they use and for the procedures
used to access and monitor resources.
Performance measurement systems should be positive, not punitive. Successful performance

measurement systems are not gotcha systems, but learning systems that help the organisation
and the individuals within It identify what works—and what does not. Continue with and
improve on what is working and repair or replace what is not working.
When consulting with staff and determining performance standards, a number of things need to
be taken into consideration.
They include:
 resource requirements
 timeframes and deadlines for the completion of work
 support needed for employees to do their jobs
 legislation that affects the workplace and that affects work
o OHS issues arid requirements
 mentoring and evaluation procedures
 workplace hierarchies and management structures
 reporting procedures
Identify short-term targets; the resources required, and the plans of action to be followed on a
daily basis to ensure that identified goals will be achieved. Plans should translate into dollar

earnings and short-term goals should fit with clarified long-term goals and visions. When plans
are implemented monitor progress and make alterations when deviations occur,
Other considerations relate to legislation, Regulations, codes of practice and national standards
relevant to the workplace.
These could include:
 award and enterprise agreements

 legislation at local, state and national levels, which impacts on business operations, e.g.
taxation legislation, Fair trading, telecommunications, privacy, licensing requirements,
environmental Issues eta
 workplace relations legislation, e.g. Equal Employment Opportunity (EEO), anti-
discrimination, anti-harassment legislation, grievance management
 relevant industry codes of practice
OHS Issues must also be taken into consideration when developing performance plans.
Such considerations are:
 OHS practice as an Integral part of work

 OHS practice as an ethical standard
 legislative requirements directly related to operations
 health and safety training requirements for employees
 establishment and regular updating and review of organisational OHS systems,
procedures and records
Utilising KPIs
In customer-focused organisations—organisations that intend to be successful now and into the

future—process design and operations will be determined by customer needs, wants,
expectations and perceptions of quality and value. Feedback from customers and stakeholders,
therefore, supplies the data necessary for evaluation of outcomes. In order to meet those
outcome requirements consistently over time. KPEs can be used to direct and control the
internal performance standards against which actual work processes can be compared.
KPIs are neither static nor immovable. They must be realistic and applicable to operations at the
time. Through the analysis of data from tracking processes, the measures or indicator.
Themselves might be evaluated and changed to better support organisational goals. Changes
might also be necessary if the standards are unrealistic, unachievable or irrelevant to the work
being done.

Relevant personnel who could be included in the process of identifying suitable performance
metrics Include:
 senior management
 human resources managers and personnel
 frontline managers
 supervisors/ team leaders where applicable
 employees
 union/ employee representatives or groups
While measurement is necessary it is not possible to measure everything. It is necessary to select

what is important to tile success of the organisation and develop KPAs and Kills for those
particular aspects of the business.
Most performance management systems fall because they do not make the crucial link between
strategy and daily actions and operations. They focus attention on tactical feedback and control
of short-term operations. A good performance management system provides a comprehensive
framework that translates an organisation's vision and strategy into a coherent set of outputs,
performance measures and targets.
By developing a set of outputs, measures, targets arid feedback systems for the leadership/
management team, and then cascading these down the organisation in such a way that they are
localised, meaningful, understood, owned and aligned, the link between the organisation's
strategic goals and the daily actions of the people doing the work can be made.
A good performance management system must mobilise the people in the organisation in such a
way that their daily activities bring them closer and closer to strategic goal achievement,
It takes action to improve performance by:
1. providing constructive feedback, intended to motivate employees and improve

performance
2. providing training, mentoring and/or coaching to improve/ increase employee skills
and confidence
3. providing, where necessary, formal arid informal performance counselling
4. involving teams/ sections/ divisions in establishing standards and reporting systems
5. providing information on costs in user-friendly, understandable ways so that rational
resource use and cost cutting become entrenched in work culture
6. providing Incentives for high performance
7. encouraging suggestions (even wild ones) and rewarding those that work
Sharing information
8. setting the example yourself

Class Activity 6
I. Why is it necessary to develop and implement performance management processes or

systems?

2. How does measuring and monitoring individual or work group performance link with the
management of effective business resources?

1.6 Conduct risk analysis in accordance with the organisational risk management plan and
legal requirements
2.1 Design performance management and review processes to ensure consistency with
2.2
Train participants in the performance management and review process
Conduct performance management in accordance with organisational protocols and
2.3
time lines
Learning Prompt
This will enable learners to Conduct risk analysis in accordance with the organisational risk
management plan and legal requirements. Learners will be able to design performance
management and review processes to ensure consistency with organisational objectives and
policies. Moreover, Train participants in the performance management and review process and
conduct performance management in accordance with organisational protocols and time lines.
Participate and conduct performance management Intervention
A key aspect of effective work planning is the identification of risks that have the potential to
prevent goal achievement and/or to disrupt work. When making work plans, it is, therefore,
necessary to consider contingencies. To do this, worst case scenarios can be addressed and plans
made so that if these, or similar scenarios, become reality, workplace disruption will be
minimised and recovery times will be reduced to a manageable level. This is a risk management
process.
Risk management processes enable individuals and work groups to:
 identify situations that pose a threat to achieving objectives

 analyse the dimensions of identified risks

 assess their capacity to cope with and/or manage those risks
They enable functions and processes to be put In place to prevent, compensate or overcome
situations in which either internal or externally generated conditions might cause interruptions
to operations and/or have a destructive impact on the continuity of work plans. Management
plans must address possible contingencies. The time critical nature of operations in most
businesses requires backup plans to enable quick reaction to operational failures or changes in
the social or physical environment.
Many factors have the potential to affect achievement of planned work objectives.
They can include:
 unexpected or unplanned budget/ financial constraints

 unexpected need for capital expenditure
 competing work demands or competing stakeholder demands that were unforeseen
 uncontrollable environmental factors such as weather, temperature etc.
 untimely interruptions to work—caused by internal or external factors
o time constraints that have changed since a work plan was developed
o personnel—experienced staff might leave at short notice, staff might fail to
report for duty, staff members could be promoted or moved and this could affect
the viability of plans
o resource and materials availability—problems with suppliers regarding quality,
costs, lead and turnaround times or deliveries
 unexpected technology/ equipment/ machinery breakdowns and unplanned down-time
o unforeseen accidents and incidents—emergency situations—chemical spills, fire,
earthquake, flood
o supply glitches—Interruptions to electricity or gas supplies or to computer
network services
 materials/ resources acquisition problems, e.g. particular materials or equipment not
arriving on schedule or general logistics failures and disruptions in transport, mail or
communication systems
o OHS problems, e.g. safety issues, legislative changes, required changes to
processes and procedures which interrupt work
o severance of communication links (technological or personal), e.g. worker
conflicts, inability of computer systems to perform to expectations, telephone
line disruptions or other environmental impacts which affect communication
o improvements or innovations which create process disruptions—the
implementation of improvements and/or new plans can, initially, create
disturbances which impact negatively on operations
 emergency situations such as theft, fraud, industrial espionage, security Issues etc.,
threats to workers or the workplace

Risk management weighs the costs of activities against the benefits and of imagined worst case
scenarios.
Whilst it is necessary to accept a certain level of risk (all activities carry a level of risk and not all
risks should be avoided), contingency and risk management plans are developed as a result of:
 Identifying what might or could go wrong

 predicting the likelihood that things will go wrong
 determining the likely effect and possible damage
 determining the level of risk that is acceptable and the levels that require contingency
plans
 determining the best methods of alleviating, controlling, minimising or preventing the
risk
This is the process of analysing the dimensions of risks and assessing the organisation's capacity
to cope with and/or manage the identified risks, it is not possible, however, to foresee every
possible contingency, therefore, flexibility and adaptability becomes the keystone of effective
contingency management.
Contingency planning is an integral part of an organisation's risk management. In all of life's

activities there is an element of risk—physical and psychological. So it is also with organisations
and their operations. Risk management processes enable organisations to identify potential risk
situations, to analyse the dimensions of the risk and to assess the organisation's capacity to cope
with and/or manage that risk. They enable functions and processes to be put in place to
compensate for situations in which either internal or externally generated conditions might
cause interruptions to operations and/or have a destructive impact on continuity.
They are important to management plans in all environments and circumstances. The time
critical nature of operations requires backup plans to enable quick reaction to operational
failures or changes in the social or physical environment. Environmental scanning (internal and
external) is the process by which organisations generate comprehensive analyses of risk factors.
While developed contingency and backup plans are obviously essential where processes or
systems are being operated for the first time or in environments undergoing social dislocation,
they should be incorporated into the entire organisation's planning processes, and should
identify flexible options, adaptable to specific situations.
Plans should address several broad areas where system or other failures, might affect the ability
to deliver products/ services effectively according to the standard plan.
Contingency plans should identify issues of:
 the nature or potential of the contingency

 the operational impacts of the contingency

 the feasible responses
 the financial implications of the responses
 the likely effects on other processes in the organisation
Decision-making responsibilities
Not only should contingency plans present a clear framework for emergency decision-making
and the contingency options available, but they must also firmly establish the responsibilities for
determining the implementation of such plans and the trigger points at which such decisions
must be made. They must specifically define the types of contingency for which determination
can be made at a local level, those for which decisions must be made by senior executives, and
those for which other agencies (e.g. government or legislative bodies) must be consulted or
Involved in such decisions.
Plans must be realistic and effective and provide a mechanism for determining which alternative
contingency plans are implemented, taking into account their cost effectiveness, a clear
framework of reference is needed. Tasks which need backup or contingency facilities should
have adequately resourced operations to enable the continuance of business activities at an
acceptable level in crisis situations.
Contingency planning implies contingency action, Taking action to minimise risks is just as much a
part of contingency planning as developing a plan to react to circumstances. For instance, many
manufacturing companies that use Just in Time (NT) inventory practices are managing vital
supplies in order to prevent disruption of their supply chain dependent business. This requires
them to secure warehouse space, transportation to and from the new inventory locations, etc.
These actions are indicative of proactivity—as opposed to waiting until a critical supplier informs
them of a problem.
Contingency plans should address and consider:
 temporary or standby suppliers

 temporary or standby staff—personnel
• temporary operational changes
• insurance coverage
 cost, practicality, time
 secondary benefits
 undesirable side effects etc.
• withdrawal requirements

They should contain the following:
1. A definition of the possible failure scenario that will cause this plan to be
implemented insofar as it can be foreseen. This is referred to as a trigger. Most
triggers are either a date or condition. For instance, you might contract with a newt
backup supplier if your primary supplier cannot guarantee that they can moot your
demands by a certain date; or your plans might state that you will immediately shut
down an operation if a monitoring system indicates high danger levels.
2. A brief description of how the business Function is to operate while the plan is in
effect—how to continue business in light of the problems,
3. Information on the variations or variables which will affect plan Implementation.
Feasible reports, financial implications and flow-on effects are likely to vary according
to the timing of contingency plan implementation decisions.
4. Suggestions on how problems causing the interruption can be fixed whilst the
contingency plan is in effect.
5. A definition of the conflations that will allow retraction of 3 contingency plan. For
Instance, the operation that was shut down is to be brought back up after manual
review and remuneration of the problem causing the shutdown.
6. Estimates of the costs to build, Implement, manage, and retire the plan.
7. A high level plan summary which outlines tasks and responsible parties, estimated
timeframe and conditions for tasks.
Risk assessment
Taking action to minimise risks is just as much a part of contingency planning as developing a
plan to react to circumstances and is necessary in terms of controlling factors that might affect
the achievement of work objectives and the completion of work plans. To do this a risk
assessment is necessary. Risks must be defined and recorded.
A risk matrix will help to order the priority of potential and identified risks. By using the matrix it
becomes possible to grade risk according to likelihood and impact—to focus on the critical areas
and to mitigate risks before crisis point is reached.
For example, in planning for the promotion of a new product an organisation might consider the
possibility that posters advertising the new product will not arrive on time. They must then
determine the effect that this would have. For instance, if the posters are to be used on their
own, then the impact might be low as the launch could be pushed back by a couple of days.
However, IF they are associated with a wider campaign then their non-arrival could impact on the
organised activities. It might be determined (using the risk matrix) that the likelihood of a late
delivery is high and the cost impact will be more than the organisation wishes to cope with.
Contingency plans should be developed in readiness, if, however, the likelihood is high but the

cost will be minimal, then contingency plans are not as vital. If it is determined that the risk is
very low, then contingency or backup plans would not be required at all.
Contingency plans will be based on risk assessments arid might include strategies such as:
 having backup machinery and equipment ready If needed

 building relationships with reputable labour hire companies from which
temporary workers can be hired at short notice
 installing a generator for emergency use
 regularly backing up all electronic files
 having both hard and soft copies of important materials and documents etc.
Design performance management and review processes to ensure consistency with

Performance management is an ongoing process of identifying, evaluating arid developing the

work performance of employees and teams, so that an organisation's goals and objectives are
more effectively achieved. This means, therefore, that goals and objectives must be
communicated and clarified and that the performance measures accepted as necessary align
with the organisation's vision, goals and the policies and procedures in place. If there is lack of
congruence, adjustments to the intended performance measures and evaluation procedures
might be necessary. The intention of monitoring and measuring operations is to measure
effectiveness—therefore quality.
Performance management is also the mechanism whereby all employees and teams can benefit
in terms of recognition, receiving feedback, career planning and personal development. It uses
an approach of enabling and involving employees and works toward establishing a climate where
people feel safe and confident to demonstrate, utilise and develop their skills within the
organisation. They are actively encouraged and supported in assessing their own competence,
identifying their own learning needs, identifying and taking advantage of a range of learning
opportunities.
Measures relating to organisational objectives might include:
 percentage of services meeting customer specifications (acceptable)

 percentage of rejects from internal customers
 percentage of waste and rework (also an efficiency measure)
 degree to which service delivery complies with established standards

Class Activity 7
Explain what a contingency plan is arid the important aspects of contingency plan development.


2.2 Train participants in the performance management and review process
Conduct performance management in accordance with organisational protocols and

2.3
time lines
2.4 Monitor and evaluate performance on a continuous basis
Learning Prompt
This will enable learners to Train participants in the performance management and review
process and Conduct performance management in accordance with organisational protocols and
time lines, Also monitor and evaluate performance on a continuous basis.
Performance Management and Design organisation Objective
Performance management is an ongoing process of identifying, evaluating arid developing the

work performance of employees and teams, so that an organisation's goals and objectives are
more effectively achieved. This means, therefore, that goals and objectives must be
communicated and clarified and that the performance measures accepted as necessary align
with the organisation's vision, goals and the policies and procedures in place. If there is lack of
congruence, adjustments to the intended performance measures and evaluation procedures
might be necessary. The intention of monitoring and measuring operations is to measure
effectiveness—therefore quality.
Performance management is also the mechanism whereby all employees and teams can benefit
in terms of recognition, receiving feedback, career planning and personal development. It uses
an approach of enabling and involving employees and works toward establishing a climate where
people feel safe and confident to demonstrate, utilise and develop their skills within the

organisation. They are actively encouraged and supported in assessing their own competence,
identifying their own learning needs, identifying and taking advantage of a range of learning
opportunities.
Measures relating to organisational objectives might include:
 percentage of services meeting customer specifications (acceptable)

 percentage of rejects from internal customers
 percentage of waste and rework (also an efficiency measure)
 degree to which service delivery complies with established standards
Organisational procedures are aimed at building quality into processes and into the production
of the products/ services, rather than just inspecting outputs at the end of the process.
Comparison of customer satisfaction performance data with data from the above measures
should confirm performance. Where there is a gap, Investigate to determine and rectify the
causes.
Once plans are implemented, monitor them to ensure they operate as intended. An effective
monitoring system is a proactive problem-solving system in that, by measuring progress toward
goal achievement, you are able to make changes and adjustments as they become necessary,
This calls for constant comparison of expectations (forecasts or projections—of team and
individual performance) against what is actually happening, to ensure operational standards are
met, and to take advantage of improvement opportunities.
Performance evaluations are an aspect of operational control. Controls are necessary for
organisations intending to achieve success. Even organisations that do not have a formal
performance evaluation system will informally evaluate performance and make decisions based
on their evaluations. Performance management and review processes should be designed to
ensure consistency with organisational objectives and policies.
When creating a performance management system, Input should be sought from key
stakeholders to determine the best method for performance management or the required
features of the performance management system. These stakeholders will have varying opinions
and concerns with regards to the structure of the performance management system.
Performance appraisals can be carried out using a number of methods, each with their own
features.
The balanced scorecard
This is a performance management and measurement system that enables organisations to

clarify vision and strategy and translate them into KRA and KPI centred action, it provides

feedback around both the internal business processes and external outcomes In order to
continuously improve strategic performance and results. KRA metrics can relate to, For instance,
global or regional sales figures and trends over time, personnel statistics and trends, real-time
supply chain information, or anything else that is deemed critical to a corporation's success. KPIs
will relate to actual performance—in terms of outputs and outcomes.
Robert Kaplan and David Norton developed the Balanced Scorecard (BSC) methodology in the
1990s, to give companies an accurate, comprehensive view of their business performance. It
relies on the monitoring of critical business-strategy-oriented metrics—quality, customer
satisfaction, innovation, and market share—measurements that often reflect a company's
economic conditions and growth prospects better than its reported earnings. It retains
traditional financial measures, but as financial measures relate to past events, for organisations
wishing to invest in long-term capabilities and customer relationships, these are inadequate.
There is a need to direct and evaluate the creation of future value.
The BSC will assist the organisation in managing both internal arid external challenges such as
responding to increased competition and more demanding customers, prioritising initiatives,
allocating resources, and communicating business strategies. The BSC builds on key concepts
such as Total Quality Management (TQM), including. Customer-defined quality, continuous
improvement, employee empowerment, and—primarily—measurement-based management
and feedback. It incorporates feedback around internal business process outputs, as in TQM, but
also adds a feedback loop around the outcomes of business strategies. This creates a 'double-
loop feedback' process.
Balanced scorecard KPIs might include the following measurements:
 % of customers satisfied with timelines

 % of customers satisfied with quality
 % of customers (internal and external) satisfied with the responsiveness,
cooperation, and communication skills of the resource acquisition and
allocation process
 finance—cost to spend ratios—operating costs of each section/ division
balanced against total obligations of that section/ division
 cost avoidance functions—where cost savings are or can be made
 % of complaints/ returns/ warranty claims/ discontinuances of product/ service
 extent of reliable management information—timely, accurate, and complete
Information make management decisions
 % of employees meeting mandatory qualification standards/ competency
requirements
 % of employees satisfied with the work environment
 % of employees satisfied with the professionalism, culture, values and
empowerment

How the balanced scorecard works;
Customer, client, supplier and employee surveys and measurements of production and sales will
provide data for BSC measures which enables monitoring and reporting on effective resource
use. This provides for a management system that maps resources against four organisational
perspectives (as per the diagram) and the building of KPIs to meet expressed needs in those
areas.
Hence perspectives are:
 the learning and growth perspective

 the business process perspective
 the customer perspective
 the financial perspective
The balanced scorecard intends clearly assigned and well understood accountability.
Performance management
To effectively move from performance measurement to performance management, two key

components need to be in place:
1. The right organisational structure.

2. The ability to use performance measurement results to actually bring about change/
improved performance in the organisation.
Advantages of the balanced scorecard;
1. Grip management
Performance results can be used to identify gaps between specific strategic objectives
and/or annual goals and actual achievement. Analyse the root causes then develop and
Implement countermeasures. Whenever there is a gap, there is an opportunity for
process Improvement.
2. Enhancing strategic feedback and learning
Learn about the future and to develop plans. Discuss past results and match those
against future expectations to check if you are on track.
3. Benchmarking
Benchmark performance against other organisations and develop target goals. However,
as noted by the International Benchmarking Clearinghouse, the strength of
benchmarking is not in identifying best performance, but in learning best practices.
4. Risk management
Use a risk-based approach to diagnose systemic problems, evaluate effectiveness, and

link performance to consequences to strike a proper balance between risk and return,
5. Leadership
Strong leadership is paramount for nurturing performance improvements, senior

management should have frequent formal and informal meetings with employees and
managers to show support for improvement efforts and implementation initiatives. Also,
they should frequently review progress and the results of improvement efforts. Clear and
consistent involvement by senior executives and managers is a necessary part of
successful performance management systems. Senior management should personality
articulate the mission, vision and goals to various levels and be visibly Involved in the
dissemination of performance expectations and results throughout the organisation.
6. Communication
Effective communication is probably the most important concept needed for successful
performance management. Measuring performance, analysing the results, and
incorporating the results into new management initiatives will be to no avail if the results
cannot be suitably communicated both within and outside the organisation. Make
performance results available and visible.
7. Accountability
High-performance organisations identify what it takes to determine success and make

sure that all managers and employees understand what they are responsible for in
achieving organisational goals—typically a key success factor,
8. Making performance measures more relevant

Link rewards and recognition to performance measures. Link targets to appraisals. This
makes managers, teams, and employees at all levels of We organisation responsible for
their contributions and causes them to focus on local activities that directly affect
strategic measures and objectives.
Develop a performance measurement system that is positive, not punitive. The most successful
performance measurement systems are learning systems that help the organisation identify
what works—and what does not, Continue with and Improve on what is working and repair or
replace what is not working. Performance measurement must not be subverted just to identify
poor performers or to administer sanctions.
Performance measurement systems are not merely data compilation practices, They must
provide intelligence for decision-makers, Assessment results need 1.1-3 he properly analysed to
provide meaningful, useable information. Result must be used or no one will take them seriously.
Assessing performance and giving performance feedback to employees Management will

generally make a choice between the following performance assessment methods;
The job description method
The job description method of performance management, in its simplest form, provides a list of
duties that the jobholder must perform. The appraiser ticks those that are being performed
adequately and puts a cross against those that require Improvement. His method is quick and
easy and highlights training needs. It is particularly effective for routine jobs such as file clerks or
assembly operators. The duties being appraised will usually be taken from employee job
descriptions. Therefore, an accurate, up-to-date job description, which includes measurable
standards or performance, is the key to this method of performance management
The critical Incident method
The critical incident method of appraising performance is gaining in popularity, possibly because
it helps to ensure fair appraisals, critical incident appraisals are based on a record of important
incidents, both positive and negative, which have occurred during the appraisal period, the
appraiser maintains this record and often employees keep their own records as well. A
shortcoming of this method is that people often believe that only negative incidents should be
recorded, with positive incidents being seen merely as normal job performance. There can also
be some disagreement as to exactly what constitutes a critical incident.
The essay method
With the essay method, a few paragraphs are written about each employee, usually according to
set guidelines. This method requires a lot of thought and care and can be quite time-consuming.

Some people can write more convincingly than others; therefore, if an appraiser is not a good
writer, employees might suffer by comparison with those rated by an appraiser who writes well.
The comparison method
The ranking, or comparison, method compares each employee with all the others in a section
against set criteria, ending up with, for example, thE2 most/ least productive employees, and the
highest/lowest quality producers and so on. As it is difficult (and probably unfair) to compare
every individual with every other one, some ranking methods only place employees into the top
third, middle third and lowest third instead of ranking each employee individually. Thus, an
appraiser can say that Sane ranks in the top third of employees on planning and organising work,
while Harry is in the middle third.
The rating scale method
Using the rating scale method, an appraiser rates specified skills and abilities of each employee
according to a defined scale. This is an easy method to use and allows quick comparison between
employees, the danger here is a tendency of some appraisers to rate all employees similarly, that
is, to rate in a hard or lenient way.
360 degree evaluations
360 degree feedback is a performance evaluation process that taps the collective wisdom of the
workforce, allowing management to leverage the potential of each employee and to eliminate
reporting bias.

Class Activity 8
1. Why is it necessary to ensure that performance management and review processes are
consistent with organisational objectives and policies?

Session 9 ~ Provide feedback
3.1 Provide informal feedback to staff on a regular basis
3.2 Advise relevant people where there is poor performance and take necessary actions
Learning Prompt
This will enable learners to provide on-the-job coaching when necessary to improve performance
and to confirm excellence in performance and Document performance in accordance with the
organisational performance management system.
Provide informal feedback to staff
Provide informal feedback to staff on a regular basis and conduct formal structured feedback
sessions as necessary and in accordance with organisational policy
Feedback is the information that is given to people to let them know what they are doing well
and what needs to improve.
Feedback is not criticism. It is not threatening and should not be used as a form of punishment.
Feedback should be given consistently and frequently and can be formal or informal. It should be
specific, balanced and used to address performance, not personalities or character traits. It
should be a collaborative process utilising two-way communication given at the time of the
observation, incident or query or as people learn new skills. Giving feedback a day, a week, or
even longer after you have observed the actions of an employee is too late it becomes irrelevant.
Feedback is most effective if given as soon as possible after the event to which it relates. It is not
much good to say to a trainee, 'Oh, by the way, when you installed that window East week you
used the wrong type of screws'. Thus informal feedback, provided at the time of an Incident or
observance is of great importance.

Recognition and acknowledgement
It is necessary for manager’s arid supervisors to provide regular informal feedback to employees.
On an individual level, we all like to know how well we are performing—whether we are meeting
or exceeding the standards. We also need to know that our efforts have at least been noticed.
Feedback from frontline and other managers is an important motivator. Positive feedback
reinforces good work practice behaviour and encourages Ii to continuing Improvement. It acts as
a source of recognition for the contribution made by employees and should, therefore, be
specific and process oriented.
Immediate individual recognition can be helpful, especially if this recognition occurs in the
presence of the team or work group. You might, for instance, acknowledge a team member's
contribution of energy and good ideas, by saying, 'Martin, I noticed you created a great new
process for handling customer calls. It saves our team a lot of time and improves quality. Thank
you!'
You might ask the team to get together for a drink after work when they have put in a
particularly productive run.
Employees whose contribution to improvement processes and organisational success is

recognised will be motivated to continue Improving and you will have created higher levels of
enthusiasm.
Improved working conditions, increased responsibility, promotion, new work tasks, the
opportunity to develop new skills or to gain a qualification are all methods of recognising
employee contribution. Not only do they benefit the employee but they also benefit the
organisation.
Open lines of communication should facilitate knowledge sharing throughout the entire
organisation and enable regular and continuous feedback. Give credit and recognition to all of
the managers of the supplier-customer chain—designers, Implementers, salespeople, those who
answer the phone, cleaners etc.
Be aware that inappropriate individual recognition can cause problems. Do not single out
individuals for projects on which a number of people have collaborated. It makes the team
wonder why they, also, are not being recognised. Also be aware that for some people, and in
certain cultures, individual recognition can be embarrassing. Appropriate reward/ recognition
implies a fair degree of knowledge and understanding of your co-workers, the reward should suit
the person and the situation.
Negative feedback

If managers and supervisors do not value and recognise the contribution of employees they will
start to feel exploited.
Whilst it is true that most people want to do a good job, it is also true that their contributions
need to be recognised. Ernp4oyees who feel ignored and exploited will soon learn to stop caring
about their performance levels and quality. They are more likely to take time off, pilfer goods
from the workplace, waste time, and make personal phone calls and internet contacts at work.
Customer service levels will drop because employee dissatisfaction is always reflected in
customer service levels, and relationships in the workplace might become strained.
Unhappy employees will stop putting in extra time to complete jobs. They will possibly spend a
great deal of time looking for other employment, All of this can be expensive to your
organisation, Recruitment, selection and training of new employees are far more costly than
giving credit to the people who already have the knowledge and skills within your organisation,
for the work they do. Recognition and reward do not always need to be monetary. 'Thank you'
goes a long way toward letting people know that you appreciate their contribution, it must,
however, be both sincere and timely.
Negative feedback which does not imply punishment or threat offers opportunities for
performance improvement. This is achieved through constructive strategy development, which
is designed to improve or change inappropriate or incorrect work practice. Most of us want to
know how to change if our actions are not producing the desired or necessary result, but we
often need support and assistance to do so. Managers and supervisors, by providing constructive
feedback, can help employees improve their performance and change any non-productive
behaviour. This implies that any feedback given will contain suggestions and strategies for
improvement and will be a collaborative process. Simply telling someone they are not doing a
thing correctly will generate resentment and make the person feel defensive but will not
contribute to new learning/ changed behaviour/ improved work practices. If it is necessary to
give negative feedback, the person giving the feedback and the respondent should collaborate
to determine the best methods of resolving the problem and improving the performance.
Constructive or positive feedback will always produce better results than negative feedback.
Negative feedback and criticism does not enhance self-esteem, and will, therefore, act as a
barrier to productive [earning, building resistance and actually encouraging improper learning or
work practice. In the feedback situation the coach/ mentor or facilitator should take care to
phrase verbal or written responses in ways that are supportive of, not discouraging behaviour
change (learning).
Timelines
Consistency and timeliness are also important, Issues should be addressed at the time they
occur. If they are left to a later time—even a day or a week after the occurrence—they become
irrelevant. They should not be saved up to address at formal evaluations. Managers should not
wait for the formal review to address issues, Events that occurred six months previously (or
longer) cannot be properly addressed and the fact that Issues have been held over and not
addressed at the time will create resentment—not motivation for change. In most cases the
issues will have been forgotten about and bringing it them up at the evaluation will be a surprise
for the employee, there should be no surprises. The employee should know what will be
discussed and why it is Important. Surprising an employee with issues that were previously
ignored or not addressed is unfair and not productive.
Consistency refers to the fact that the process of providing informal feedback should be regular
and the type of feedback given should be consistent, that is, always constructive, not sarcastic,
denigrating or damaging. it also refers to the fact that all feedback should be followed up—the
person providing the feedback should work with the employee to develop improvements and
should check back to ensure that the employee has clearly understood and is able to put the
improvements Into practice. Where necessary, extra support might be provided. This process
should be consistently and reliably followed.
Be aware that employees will make mistakes. Mistakes provide an opportunity to share feedback
and develop procedures that will prevent future mistakes. Mistakes—but not repeat mistakes—
can, therefore, be useful if they are received as learning opportunities.
Why feedback is needed
We all want to know whether we are doing a good job, we need feedback to let us know that
what we are doing is correct and is achieving the intended objectives. If we are not doing the job
properly we want to know what changes must be made in order to fix the problem—to improve
our performance and/or to correct poor performance. In this context feedback entails seeking or
giving responses, comments or advice about behaviours and/or performance. Effective feedback
should result in learning—improved competence—observable behavioural change or in
reinforcement of correct behaviours/ work practice.
How to give effective feedback
When imparting information to trainees and/or Instructing, mentoring or coaching employees,

your communication skills come to the fore. The information you deliver must be dear, relevant
and presented at the correct level for the audience to understand.
To give effective feedback, is necessary for good team leaders/ supervisors/ managers. Managers
and supervisors need to understand that correct behaviour (processes, skills and technical
applications) is embedded through practice, corresponding response, acknowledgement and
reinforcement. If consistently doing the wrong thing gives no feedback to that effect, then
people will continue to do those things. This presupposes that employees have been informed of

the required actions, tasks, roles and standards of performance and ail are clearly and concisely
Informed about their roles, responsibilities and accountabilities.
Effective learning, therefore, requires:
 instruction/ demonstration
 development of procedures
 practice/ repetition
 constructive feedback
 reinforcement
When giving feedback restrict the information you impart to the learning tasks or to the
processes that need to be improved. Personalities or character traits not relevant to the learning
situation do not form part of the process.
Use positive, non-discriminatory language and make instructions supportive, not critical.
Good feedback is specific—just to say 'Great' or 'Well done', might make someone feel good, but
does not cement in place appropriate practices as it does not point to exactly what was done
well. When giving feedback to someone who has made a presentation you might say, `Good, well
done. Your voice was very clear and you answered the questions very accurately'.
The following are examples of generalised statements which are, actually, quite unhelpful:
a. You need to take more care with your work.'

b. Try to be assertive.'
c. You're doing very well.'
d. Do it better next time.'
Consider the notion of the feedback hamburger. Feedback can start with something positive
(however minor) and end with something positive/ constructive. Acknowledge the things the
trainee has done correctly. Go on to explain the corrections that need to be made, so that
performance will assist in generating a positive and encouraging approach. Finish by reinforcing
the correct behaviours, or a particular aspect of those behaviours.
Effective feedback acknowledges the good aspects of performance while offering methods of,
or strategies for, Improving on poor performance. It is factual and results oriented.
Do not use blame statements:
a. You did that wrongly

b. You made a mistake there
Use and 'we' statements:
1. know that we can rectify this problem

2. understand why you are doing it this way but
3. Perhaps we could try

4. 1-low do you think we could
Unsatisfactory performance should point toward Improvement methods, rather than dwelling
on what was done wrongly.
For example, when someone you are training to drive a car takes a corner too sharply, you could
respond in at least two ways:
1. You made that turn too sharply

2. Try to make the turns more gradual by slowing a little more just before the
turn.'
Formal feedback
Performance review sessions are a good avenue to provide formal feedback. Any type of
evaluation provides important feedback for all employees.
A 360 degree evaluation provides multi-source feedback. It gathers and collects performance
information from numerous People and levels in the organisation. The advantage of this is that
each stakeholder offers a unique perspective from which an individual's performance can be
understood, their strengths rewarded, areas in need of development identified. It ensures a
psychologically safe environment through greater anonymity so that managers/ leaders can also
be evaluated and benefit from employee assessment of their skills and interactions.
Who should be evaluated?—everyone in the organisation—from the CEO to the cleaner.
360 degree evaluations are developed with the objective of improving:
 individual employee performance capabilities

 manager supervisory skills—by making them more sensitive to the effect of their
management styles on the performance of their work unit
o team operations—by having team members rate the performance of their team
mates
Typically, 360 degree evaluations are conducted anonymously, so that the person being
evaluated is unaware of -now each team member or co-worker rates them as an individual. This
protects the retribution from a poor rating and assures the process is conducted in as fair and
unbiased a manner as possible. 360 degree evaluations may also be conducted for purposes of
pay determination.
The process
The development of any type of formal performance evaluation should follow specific definition
and implementation procedures:
 explaining and communicating the process so that it is clearly understood one by all
involved individuals
 setting clear evaluation criteria
 identifying the appropriate number of employees who will participate in the process
 conducting the evaluations with, and collecting information from, manager/s, peers, and
subordinates
 Implementing procedures for self-evaluation
 analysing the collected information to identify consensus strengths and weaknesses of
the evaluated Individuals
 meeting with the individuals to discuss results and develop a self-plan which uses their
defined strengths to overcome any personal challenges
 conducting periodic. evaluations to measure and ensure progress
With 360 degree evaluations the difference comes from the fact that a number of people are
involved in the evaluation. Assessment and feedback do not come from a single manager/
supervisor and the information does not only come from levels above the person being
evaluated.
360 degree evaluations:
 are fair and equitable

o avoid the problems of subjectivity or bias associated with only one person
opinion
 about an employee's performance
 clearly indicate skills gaps, training needs and professional development requirements
 relate directly to the employee's job description
 make the appraisal process less intimidating and threatening
o make tho appraisal system relevant for all organisational members
 create opportunities for management/ leadership improvement
 create opportunities for managers/ feeders to receive objective and comprehensive
feedback on the behaviours which affect workplace productivity
 offer reinforcement to the individual that their work and personal development are
important to the organisation and its people
 offer greater job satisfaction resulting in improved job performance, reduced attrition
and turnover
 build closer, more effective relationships between people who work together
 provide baseline information for demonstrating progress and additional growth
opportunities
 360 degree evaluations benefit the organisation because they enable clear links with
organisational objectives and policies,
They:

 assist in building competitive advantage by identifying and leveraging the organisation's

core competencies
 serve as a motivational tool for developing those competencies
 enhance customer connections and relationships by Involving them in defining their
expectations arid utilising their input on quality, and service
 create a success driven climate which aligns individual and corporate goals
 achieve a comprehensive understanding of performance and development needs related
to continuous learning and focused on both task and interpersonal behaviours
 exploit the strength of upward feedback—a powerful tool in developing the critical
Interpersonal skills needed by managers
o indicate relationship strengths and weaknesses between managers, peers,
subordinates, internal and external customers
o build trust and respect by providing comprehensive and reliable information
about performance and by utilising employee knowledge of performance
Give positive praise in public, negative feedback in private. Always follow-up—to ensure that the
feedback has achieved what It was intended to achieve.
When providing feedback, take into consideration the following:
Equity theory
Focuses on people's feelings of how fairly they see themselves being treated in comparison with
the treatment received by others. People evaluate their social and work relationships in terms of
return for investment. They expect certain rewards in exchange for the contributions made, but
those rewards have to be seen as fair and equitable, particularly when compared with the
rewards received by others. Rewards might be indicated by task allocations, delegated
responsibility and/or opportunity for training and development. In the workplace, inequitable
behaviours by leaders/ managers—unreasonably favouring one person over another, or
recognising one person's contribution but ignoring another can be de-motivating and very
destructive,
Goal theory
Contends that the perceived value of goals affect motivation. We strive to achieve goals that
have meaning to us. We are more likely to strive for achievement of specific quantitative goals,
such as a defined level of performance, or a given deadline for completion of a task, than for a
vague goal such as 'do the best you can' or no defined goal at all. We are motivated to achieve
clear goals and stretch goals are more motivating than easy or insignificant goals. Encourage

employees to participate in setting clear, realistic, measurable goals and objectives, Enable them
to monitor and measure their own progress and successes. By participating in setting and
measuring their own goals and by monitoring their own work, individuals are motivated toward
success.
Motivation theory
Suggests that the things that motivate us will change with time and as we successfully achieve
previously Identified goals and objectives. The challenge, therefore, is to provide for new goals
and stretch people so that they remain motivated. This applies also when providing feedback
and reinforcement. If the manager or supervisor can work with the employee to develop goals
that the employee recognises as important, then the feedback will 1)e more motivating and more
effective.
To encourage motivation leaders/ managers should:
 ensure effective communication systems exist and are used in the organisation
 recognise individual differences
o match people to jobs
o ensure that goals are seen to be attainable yet have significant stretch elements
o ensure agreement on goals
 individualise rewards
 link rewards to performance
 check the system for equity
o use performance reviews to understand employee needs and to initiate
processes that will enable fulfilment of those needs
Rewards for good performance
When rewarding and acknowledging good performance, consider the following:
Delegation
Delegation of jobs, responsibility and authority is motivating. It indicates to workers that they are
trusted and that the manager leader believes in their competence. If they are able to address
Issue, and solve problems on the floor, improvement processes and productivity are enhanced. If
however, workers are treated as incompetent and untrustworthy.
Training and development

Opportunities for employees to develop new skills and learn new competencies are also
motivating. They underscore the implied value of employee contribution and demonstrate their
worth to the company. They Increase self-esteem and confidence in those workers who are sure
about their competencies to meet their task and role requirements will perform better.
Money
Although it is important for management to set goals, create interesting jobs and provide
opportunities for participation, money is a main reason why most people work. They have an
expectation of a fair wage for a fair day's work. When they genuinely believe that they are being
underpaid they will not be motivated to work to their full capacity. The allocation of
performance-based wage increases, piecework bonuses, and other pay incentives can be
Important In encouraging employee motivation.
Counselling
Counselling and negotiation skills are needed when empowering or encouraging motivation in
others to improve performance. Managers and frontline managers will often be required to act
in a counselling capacity, providing direction, knowledge, understanding and support for task
achievement when an Individual is experiencing difficulties. Counselling is that part of the
managerial role dealing with emotions. It requires empathy and active listening to summarise
and clarify without criticising or judging. Ask employees to participate in solving performance
associated problems and to collaborate in planning improvements. Negotiate win/ win solutions
so that employees are motivated to succeed. Explain the benefits of Improvement. Provide
support and follow-up monitoring processes.
Seeking feedback
Be proactive in seeking feedback about your own performance and about your management/
leadership style.
Observe the responses to your behaviour in the workplace. Are you receiving positive or
negative responses? If you are receiving mostly negative responses then consider what you need
to change. Ask for feedback—but ensure that those giving feedback are not threatened or likely
to suffer any negative repercussions for telling you something you might not wish to hear. If you
ask for feedback and receive responses that are intended to help you change your behaviour,
follow through. If people go to the trouble of giving feedback which you ignore, they will
probably never bother again and you will not improve your behaviours or your relationships.
When you ask for feedback, expect honest responses and respect those responses. Do not react
defensively—react with an attitude that reflects inquiry and a real desire to learn.
Ask for information on specific situations. For instance, you might ask, 'What did I do well (or
poorly) when managing that conflict situation?', or 'What suggestions can you make that will
help me manage such situations better In the future?

Class Activity 9
1. In what ways can you recognise the contribution of your work group member and
why should you do this?
2. What is feedback and why is it important that managers and supervisors provide
informal feedback to staff on a regular basis?
3. Give examples and an explanation of what you consider to be Formal and informal
feedback.

Session 10 ~ provide feedback
Provide on-the-job coaching when necessary to improve performance and to confirm

3.3
excellence in performance
Document performance in accordance with the organisational performance

3.4
management system
Learning Prompt
This will enable learners to prepare selection report and make recommendations to senior
personnel for appointment and how to advise unsuccessful candidates of outcomes and respond
to any queries.
Regular Evaluation of performance management
Performance management is a continuous cycle which commences with your recruitment

decision and includes setting performance criteria, monitoring and assessment, feedback, action
planning, and learning and development activities. Significant goals of performance
management include:
• alignment of individual and team effort with organisational goals and

objectives
• creating a shared vision of the organisation’s strategic direction
• facilitating discussions on performance expectations, standards and
achievements, and
• providing a mechanism for employees to receive regular performance
feedback and guidance.

What is performance review?
From the moment we recruit an employee we are judging and making decisions about their
performance. An important first component of the review process is ensuring that the employee
understands the inherent responsibilities, goals and objectives of the position.
Introducing a performance review system
As an organisation grows, the performance management issues become more complex and this
is when you may think about moving from an informal review system to a more structured
formal program. You may like to consider the following when introducing a more formal
performance review system:
 reviewing organisational goals and objectives

 establishing individual performance goals and
 objectives in line with organisational goals and objectives
 consulting with employees and involving them in the development phase
 establishing the purpose and proposed benefits
 keeping it simple
 identifying performance goals and objectives for each position and ensuring alignment
with organisational strategic direction
 organising training for employees involved in the review process
 record keeping.
Performance review process
Ideally your performance review and associated discussions with your employee should be a
regular ongoing process. The following steps provide you with some guidance for when you
undertake more formal performance discussion:
STEP 1 Plan and prepare
A successful review involves preparation and commitment. A key step in your preparation is to
schedule enough time for the discussion so that employees do not feel that they have been
rushed or deprived of an adequate review.
Familiarise yourself with the position description or requirements of the job

Read the position description to ensure that you understand your employee’s job requirements.
If you are reviewing their performance, you need to be able to compare it against the
expectations and requirements of the position.
Pre-review questionnaire
Consider developing pre-review questionnaires for both parties to help prepare them for the
upcoming discussions. The questions should prompt both parties to critically evaluate
performance and identify strengths and development needs, achievements, any potential
performance issues or problems, and any changes which could be made to improve
performance.
Review previous performance reviews
Check the results of any previous reviews as this may trigger discussion points for this review.
Evaluate job performance against the job expectations/requirements a rating scale may help
identify areas of improvement or new directions, targets and goals for the next review.
Plan the performance review meeting
Consider the issues that need to be discussed. Focus on positive feedback as well as areas where
improvement and development is needed. Think about possible goals and objectives for the
duration of the next review period.
STEP 2 Conduct the review
The setting
A formal performance review should be conducted in a quiet location away from distractions and
interruptions.
Starting the review
Start the process in a positive manner by asking the employee what they have included in their
pre-review questionnaire and discussing achievements and strengths. Consider the points raised
in the pre-review questionnaires. Active listening will demonstrate that you are interested in the
employee’s progress, achievements and feedback. Modify your own perceptions and review
where appropriate. Ask the employee for their suggestions on how they may improve
performance or work practices in their area.
Participation
Keep the review on track and focused and encourage the employee to be involved. This may
mean you have to do more listening than talking.
Dealing with any issues
Review any agreed goals and objectives and ensure alignment with the strategic direction of the
business. Providing negative feedback can be counterproductive so carefully consider what you
hope to achieve in delivering the feedback and how you can deliver feedback in positive terms.
Concentrate on positive aspects of the employee’s performance, and deal with any general
problems jointly in a constructive way.
Review goals and targets
Review previous targets and goals. Work together with the employee to set new ones if
necessary. The result is joint ownership and commitment to the goals and targets.
Use the SMART formula system below as a guide.
Specific – Measurable – Achievable – Relevant – Timely
Document agreed targets and indicators of performance to avoid any confusion or

misunderstanding at a later stage.
Ending the review meeting
Discuss changes to the review and agree on a date to finalise the written review. Agree on a date
for their next review. Close the meeting once all issues have been discussed and the employee
has had an opportunity to share their input.

STEP 3 after the review
Finalise your notes made during the discussion. You may ask the employee to sign the final
written performance review to indicate that they have read the revised review and that the
discussion took place. This does not mean that the employee agrees with the content of the
review.
Poor performance
Poor performance generally falls into the following categories:
 unsatisfactory work performance

 breach of workplace policies, rules or procedures
 unacceptable behaviour
 employee’s personal issues that impact on their
 performance and/or others in the workplace
Reasons for poor performance
Common causes of poor performance may include one or more of the following:
• your employee doesn’t know what is expected because goals and standards
or workplace policies and consequences are not clear (or have not been set)
• there is a mismatch between your employee’s capabilities and the job they
are required to undertake
• your employee does not have the knowledge or skills to do the job expected
of them
• lack of personal motivation, low morale in the workplace and/or poor work
environment
• your employee may have personal problems such as family stress, health
problems or substance abuse problems with drugs or alcohol.
Poor performance should be considered promptly as unaddressed problems have the potential
to escalate and are very likely to have a negative effect on morale, productivity and the
workplace in general.
Managing poor performance
Access and analyse the problem

How serious is the problem? How long has the problem existed? How wide is the gap between
the level of performance and the level of performance expected of the employee? Refer to the
common causes of poor performance as a guide.
Once you have identified and assessed the problem, organise a meeting with the employee to
discuss it. Let them know the purpose of the meeting so that they can make the necessary
preparations.
Allow the employee to bring a support person, or a union representative, if appropriate, to the
meeting.
Meet with the employee to discuss the problem
Meet with the employee in a quiet location away from distractions and interruptions. You will
need to define and provide specific examples to ensure that the employee understands exactly:
 what the issue is

 why it is a problem
 how it impacts in the workplace
 why you are concerned.
Also explain the outcomes you want to achieve from the meeting. Give the employee the
opportunity to respond and put their case forward. Listen to their explanation of why the
problem has occurred.
Jointly devise a solution
Work out a solution with your employee. An employee who has contributed to the solution will
be more likely to support the process. Develop a clear plan of action with your employee to
implement the solution. The action plan should include performance improvement milestones
and timeframes.
Schedule your next meeting with the employee to review and discuss their performance against
the agreed action plan.
Keep a written record of all discussions relating to poor performance, including action to be
taken. You may need to refer to these if further action is required.
Monitor and review performance

Monitor the employee’s performance and continue to provide feedback and encouragement.
You will need to work with the employee to ensure that performance improvements are
sustained. If you do decide to dismiss the employee make sure you are aware of your obligations
under the Fair Work Act 2009 (Part 3-2 Unfair Dismissal).

Class Activity 10
What are the review processes of a Performance Management?

Session 11 ~ Provide feedback
Document performance in accordance with the organisational performance

3.4
management system
Conduct formal structured feedback sessions as necessary and in accordance with

3.5
organisational policy
Learning Prompt
This will enable learners to document performance in accordance with the organisational
performance management system and conduct formal structured feedback sessions as
necessary and in accordance with organisational policy.
Advise and record performance and take necessary actions
Advise relevant people where there is poor performance and take necessary actions
When employees are unable to meet goals established through performance planning processes,
or if there is a specific Incident (e.g. if an employee delivers a sub-standard piece of work), if
there is conflict or a complaint etc., then the manager/ leader must address the issue
immediately. Immediacy is important. Feedback on poor performance or resolution of problems,
issues and grievances will be most effective if it is addressed at the time—not left until the issue
has either escalated or been forgotten about.
Performance management, counselling and conflict management processes should be designed

to allow employees the opportunity to receive clarification, develop additional skills, confidence
or knowledge, or to correct erroneous and non-productive work practices.
The necessary actions to be taken where poor performance is observed might involve
 collaborative problem solving

 counselling
 performance planning
 conflict resolution
 negotiation
 mentoring or coaching
 the provision of specific training
 reassignment
It might be necessary to report, to senior management or to the Human Resource (HR)

department of the organisation, the performance issues and the proposed steps that will be
taken to resolve the issue/s that are identified by the monitoring and evaluation process.
If performance plans or Improvement contracts are drawn up as a result of agreements made in

a performance appraisal interview, these might be lodged with the HR or administration
departments.
I-IR might also need to be notified if there is an identified training need. They can then put in
place strategies for meeting this need.
It could be necessary to notify HR or senior management if a performance counselling session is

arranged. It would then be possible for an objective observer to attend the counselling meeting
and to make notes so that both parties are able, after the fact, to confirm what was discussed.
Core employee competencies are a measuring stick for performance review. A competency-
based approach involves finding out what skills, knowledge and behaviours people need in the
workplace to translate organisational goals into specific actions. Training and people
management practices can then be designed to ensure that the required skills, knowledge and
behaviours are monitored and evaluated and that they are developed, recognised and rewarded.
This means that an organisation's strategic planning information can be used to identify its
human resource needs. At the operational level these needs are used as the basis for the
organisation's human resource processes and practices. At the individual performance level
these competencies are inculcated into the performance management system. One of the
things, therefore, that managers/ leaders must face is managing underperformance.
Reasons for poor performance can be many and varied. Managers need to be aware when
conducting appraisal Interviews and when addressing issues of poor performance they will need
to conduct appropriate investigations and collect data relevant to the issues under review.
Possible causes of poor performance might, for instance, include:
 low level competencies

 Inadequate training
 inability of workers to perform at the required levels
 badly structured work teams or groups/ personal conflicts

 poor attitude of employees

 personal problems not directly associated with work
 inability to cope effectively with the introduction of changes, affecting work practice
 policies that are not understood by employees
 poor communication and Information systems in the organisation
 interactions between personnel where one, or each party has preconceived or assumed
expectations of the other
o management/ leadership inadequacies
o inconsistency in Instruction, communication and Information dissemination
o misunderstood instructions and directions
o unwillingness to comply with requirements
o inability to meet goals and/or targets
 role ambiguity
 system inadequacies or Inefficiencies
 process Inefficiencies
 disputes over wages and working conditions
o disagreements/ misunderstandings regarding work responsibilities and
obligations
o disagreements/ misunderstandings over quality and quality requirements
o disagreements about ethical business practice
 non-compliance with code of conduct (ethics)
 unclear goals and objectives or goals which are not agreed upon
o inappropriate OHS practices
 competition between groups, teams or individuals
o high levels of worker stress, anxiety and dissatisfaction
o low levels of enthusiasm and morale
o low motivation and support for leaders/ managers
 poor productivity
o poor time management
 time wasting activities
 employee illness, absenteeism, attrition and workplace accidents
 lack of support for objectives and goals—undermining and sabotage of goals
o anger and arguments
o lack of response to organisational needs
o environmental stress, i.e. caused by the work environment
 uncertainty
Necessary actions
When poor performance is identified it is necessary to take specific steps to address it. This will
involve the collection and analysis of performance related information. Collect Information, if

possible, from a number of different sources. Try to collect direct information. Do not rely on
second-hand Information or on information provided solely by other people. Such Information
can be biased or inaccurate. Collect reliable, valid, relevant production/ productivity related
information.
Use the information to identify the root causes of problems.
Organise, with the involved employee/is a mutually convenient time to discuss the performance
problems.
At the: meeting work with the employee to determine wily the problems exist arid to develop
problem solutions.
Negotiate, wherever possible, solutions that will benefit both the employee and the team/ work
group and the organisation.
Options
KPIs and performance targets set during performance procedures might need to be modified or
reduced. If they are unrealistic or unachievable, adjustments should be made. Where the cause is
with the employee's competencies—skills and knowledge—training/ retraining might be
necessary.
If problems are caused by systems, resource allocation or with work itself, it might be necessary
to redesign work or work systems as necessary.
Conflict management and mediation skills might be required in order to resolve personality
conflicts or Interpersonal problems.
Personal difficulties not directly related to work can Impact on an employee's performance, as it
is often difficult to leave issues at the door when an employee comes to work. These difficulties
can have a negative impact upon an employee's motivation and hence work performance.
These can include:
 relationship issues with a partner, children, parents, other relatives or friends

 low self-esteem and confidence
 financial difficulties
 imbalance of priorities
 accommodation issues
 medical/ health condition
 grief and loss
 substance abuse—alcohol and other drugs

IF personal difficulty is identified as the reason for a decline in work performance, such issues
should be handled sensitively. Managers/ supervisors must use good judgement to determine
how far they can investigate and what options they can offer an employee with regard to
resolution. They must take care not to invade employee privacy. Counselling might be offered
through an Employee Assistance Program (EAR) or referrals to counselling services might be
made. In some instances time off could be an option. Steps or plans for resolution might also
need to be reported to senior management and/or to HR.
Managing poor performance
Tee management of poor performance or underachievement is an essential component of

effective people management. Some practices, especially disciplinary action, are strongly
governed by existing legislation, Regulations and internal procedures and managers need to be
aware of these governing policies in order to ensure fair process. However, the intention of
performance management is to encourage improvement; to negotiate problem solutions and
divert conflict toward positive, rather than negative outcomes.
Some of the important aspects of managing Issues and problems are:
1. Bringing issues out into the open so they can actually be resolved. When an issue is
identified, the onus is on the manager to arrange a meeting to raise and discuss the
matter.
2. Early detection and resolution. Performance Issues are most easily addressed and
resolved when they are at a low level of difficulty and of short duration. Problems that
are not addressed might go underground, to re-present at a later time at a higher level
of disruption and significance.
3. identification of the real Issues. Once a difficulty has been flagged, identify the nature
and the root cause of the performance difficulty. Investigative problem solving is an
essential part of performance review. It provides the employee and the manager with
an opportunity to identify support strategies so that the employee can meet agreed
goals. This outcome is best achieved by a supportive, non-judgemental approach that
aims to Investigate, assess arid identify reasons for the difficulties in the level of
performance.
4. When communicating with the employee about performance issues, define the
problem in terms of performance and outputs. Explain to the employee how their
performance impacts on outputs and outcomes,
5. Identifying any blocks or potential barriers to change and collaborate to prevent them
or to minimise their effect.
6. Utilisation of collaborative action planning and implementation. Having identified and
documented a performance shortfall; consult with the employee and collaborate to
examine and agree of possible improvements. This process can engage and empower
the employee to take charge of performance improvement and skills development.

7. Making sure that appropriate support mechanisms are available as needed.

8. Clarifying, with the employee their role, position and expectations. Clearly identifying
and documenting work priorities, goals and objectives so that improvements can be
tracked, measured and monitored.
9. Setting up and agreeing upon, with the employee, mechanisms for future review.

Class Activity 11
Case study
Sue works for you in a busy, customer focused technology support centre. Her position requires
her to answer the telephone, handle face-to-face enquiries regarding technical difficulties, use
her knowledge and experience to solve problems and finally to communicate solutions to
customers. Until recently you considered Sue to be very capable. You received good feedback
from other staff and customers about her technical ability and customer service skills generally.
Recently, however, you have received a number of complaints about her from one of your
colleagues and from several customers. The complaints relate to her terse and harsh
interpersonal skills and her lack of responsiveness when dealing with problems.
1. You will need to address these complaints. What performance areas will you investigate?

2. How would you approach Sue regarding these complaints
3. If you needed to gather information from other sources, how would you address the
issue of confidentiality?

4. How do you think the difficulties could be resolved

Session 12 ~ Manage follow up
Write and agree performance improvement and development plans in accordance with
4.1
organisational policies
4.2 Seek assistance from human resources specialists where appropriate
Learning Prompt
This will enable learners to write and agree performance improvement and development plans in
accordance with organisational policies and seek assistance from human resources specialists
where appropriate.
Write and agree on performance improvement
Write and agree on performance improvement arid development plans in accordance with
organisational policies and seek assistance from human resources specialists where appropriate;
Prior to and as part of the process of developing improvement plans it is necessary to:
 Identify the specific Inappropriate behaviour or work practices

 base the assessment on unbiased evidence and examples
 indicate to the employee, in terms of outputs, productivity and outcomes, why the
actions/ behaviours are inappropriate
 point out the impact of the problem on the performance of others, le on the team's
performance and organisational performance
 describe the expected behaviours or standards—make sure the individual understands
 ensure that expectation are reasonable and achievable
 ask questions about causes and explore remedies
 ask what we can do to resolve the problem
 be appropriately supportive, e.g. praise aspects of the employee's work arid identify
personal and group benefits of compliance
• make sure that the appropriate support Is available and put in place
• identify incentives and rewards that are appropriate to the Individual
• link the attainment of desirable outcomes with Incremental, continuous
Improvement
Where poor performance is identified it becomes necessary to put plans and procedures in place
to change or modify behaviours and inappropriate work practices. Where necessary, seek advice,
support and expertise from specialised human resource services or personnel to resolve issues
and problems.
The counselling process aims to Investigate and resolve performance problems and is distinct
from a formal disciplinary process, it is often the case that a formal disciplinary process will
commence only after counselling has failed to resolve the Issue. Managers must be aware of
counselling and disciplinary policies that apply within their organisation and to the industrial
legislation with which they must comply. HR personnel might be consulted with regard to any or
all of these matters.
Managers might be responsible for interacting with the employee (or team/ group) in order to
develop improvement plans; however, it might also be a good idea to Involve HR personnel who
have special expertise with regard to the management of behaviour and who can assist in
drawing up performance plans. The development of improvement plans requires cooperation,
collaboration, negotiation and agreement between the involved parties. HR personnel who are
experienced at mediation might be able to direct negotiations toward a satisfactory outcome for
both the manager and the employee.
When counselling employees about their improvement needs, someone from the HR
department might attend to make notes on behalf of both parties. These notes can then be
referred to if there is any later misunderstanding or need for clarification. As an objective
observer this person might mediate if emotions run high, keep the discussions on track and
clarify issues that are not understood by either party. Both the employee and the manager might
feel more secure knowing that an objective observer, who will ensure that their rights are
upheld, is present.
Planning
Performance improvement and problem resolution require planning mechanisms and follow-up.
These can take the form of:
written contracts and agreements regarding improvement goals

documented plans for periodic reviews and assessments of progress
agreement on monitoring and follow-up processes including review timeframe

Formal reviews should be conducted at nominated times. These will be used to assess the
effectiveness of interventions in relation to the goals set and to make additional improvements
where necessary. They enable the manager/ leader to provide constructive feedback and to
acknowledge improvements that have been made—to reinforce correct behaviours. Reward
(including using praise) all Improvements in performance in a timely and honest manner.
If sufficient progress is made to judge that the issue is substantially resolved, then performance
can be managed as before, If the employee's performance does not improve, Further discussions
should take place,
Negotiations
The development of performance plans—the plans that will be followed to ensure performance
improvement—is, as already stated, a negotiation process, Managers and employees must
cooperate to reach the best agreement and potential outcome for the employee and for the
organisation.
During the negotiation the manager must;
 avoid premature judgements or decision-making

 separate the people from the problem
 determine what the true issues are and what the negotiable boundaries are focus on
interests, needs and issues
 try to see the situation from the other person's point of view—empathise and respect
the other party's position
 use active listening and open questioning techniques to fully understand the other
party's position
 demonstrate a genuine interest in problem solving
 avoid reacting to emotional outbursts, remain calm, empathise, but not lay blame or
react defensively
 Insist on objective criteria, use fair and equitable standards and procedures
 encourage the other party to participate In joint problem solving, use feedback and
reinforcement to demonstrate goodwill and understanding
 focus on building a working relationship
 clearly Identify areas of agreement as well as areas of disagreement
 take time to negotiate a successful solution, be patient and confident
When agreement appears to have been reached:
 summarise the areas on which you have reached agreement

 confirm the agreement and the terms of agreement
 put agreements in writing—in the form of a performance plan
 ensure the necessary support will be available (this might include coaching, mentoring or
training)
 agree on milestones and on monitoring procedures
 organise times for follow-up meetings
Performance plans
The performance improvement plan can play an integral role in correcting performance
discrepancies. It is a tool that aids in monitoring and measuring the deficient work products,
processes and/or behaviours of a particular employee in an effort to improve performance or
modify behaviour.
1. When drawing up the plan
Define the problem. This is the deficiency statement. Determine whether the problem is a
performance problem (employee has not been able to demonstrate mastery of skills/ tasks) or a
behaviour problem (employee might perform the tasks but creates situations that disrupt the
work of others).
2. Clearly define and document the duties or behaviours requiring improvement

a. What are the aspects of performance required to successfully perform these duties?
b. Which skills need improvement?
c. What changes need to be made in application of skills an employee has already
demonstrated?
d. What behaviours need modification?
3. Establish relevant priorities and consider:

a. the possible consequences of errors associated with these duties
b. the frequency with which these duties are performed
c. how the duties under examination relate to other duties
4. Identify the standards upon which performance will be measured for each of the duties
Check that they are reasonable and attainable,
5. Establish and agree timetables for accomplishing change in performance/ behaviour
Check that goals and timetables are reasonable arid attainable.
6. Develop an action plan
Determine:

a. what the manager will do to help the employee accomplish the goals within the desired
timeframe
b. what the employee will do to facilitate improvement of the product or process
7. Establish and agree on periodic review dates
Agree on what he reviewed at cad- of these meetings.
8. Measure actual performance against the standards to determine if expectations are:

a. not being met
b. being met
c. exceeded
Records
Establish also, a performance Improvement plan file for the employee.
The file should contain:
 a copy of the written performance improvement plan in plain and simple language and
an easy to read format
 the performance Improvement plan terms of agreement
 documentation which identifies both improvements and/or continued deficiencies; the
employee should have access to the file and be encouraged to review it periodically
 review results including specific examples which clearly identify accomplishments or
continuing deficiencies

Class Activity 12
1. Under what circumstances and for what reasons might HR expertise be of benefit to
managers and employees who are negotiating performance improvements?

2. What procedures might be followed to draw up and implement a performance

Improvement plan?

4.3 Reinforce excellence in performance through recognition and continuous feedback
4.4 Monitor and coach individuals with poor performance
Learning Prompt
This will enable learners to Reinforce excellence in performance through recognition and
continuous feedback and Monitor and coach individuals with poor performance.
Reinforce excellence in performance
Where the employee has input into the structure of improvement activities, commitment will be
much higher. If you approach performance counselling as an opportunity to provide assistance
to the employee—as opposed to punishment—then the employee will feel valued and
relationships will be at the least, maintained, bun often, improved. Aim to meet both
organisational and employee's needs—win/ win.
The need to acknowledge good performance, reinforce excellence, provide appropriate

feedback and support and to mentor or coach individuals with poor performance have already
been addressed.
Performance management systems that do not rely on continuous feedback are unfair and will
generate resentment and Frustration on the part of employees. There should be no surprises at
the evaluation Interview.
Performance evaluations should be used to:
 provide performance feedback to team members

 acknowledge arid reward high performance
 reaffirm goals and objectives
 ensure that processes are achieving the desired outcomes

 identify hindrances and problems and to develop procedures for overcoming constraints
 reaffirm the shared sense of purpose and commitment
o resolve any issues surrounding roles, tasks and team balance
o agree on improvements and changes and develop new strategies where
necessary
 confirm that team and individual competencies meet the required standards and are
relevant to task
o determine training, development and other support needs
o evaluate team communication and problem-solving activities
 provide opportunities for job rotation and multi-shilling
o address any poor performance outcomes
Regular and continuous performance monitoring activities enable frontline and senior managers
to acknowledge and reinforce good work and to identify problems as they occur. Problems can
then be discussed with the involved employees at the time, Performance issues then can be
addressed either formally or informally,
Poor performance
It must be noted that performance is not always attributable to employees;
Other conditions which negatively affect team/ group arid individual performance might result
from organisational management actions or behaviours which prevent teams from functioning
effectively. This might be due to restrictions with regard to decision-making, resource acquisition
arid usage, access to information, lack of responsibility and authority, lack of training for
organisational members, poor leadership choices, hierarchical structures which impede
employee contribution and/or lack of understanding by a training for organisational managers/
leaders.
Poor performance might occur as a result of
 command and control management systems that restrict employees and prevent them
from doing their work
 inefficient organisational processes and systems
o the introduction, without consultation and involvement, of major changes
o workplace hazards which put employees at risk of very and/or illness, reducing
employee morale
o systems in which high achievement is not recognised or rewarded
if organisational or management actions are perceived as threatening and non-supportive,

employees will retract support for organisational goals and might passively or even actively work
against achievement.
When poor performance is identified, performance improvement plans might be put in place.
These can be verbal, but are more likely to be formal, written and recorded, and are, in effect, a
contract between the worker and the organisation. The plan details the required performance
objectives and applicable timeframes. It also outlines the support that the employee will receive.
This support might take the form of coaching, mentoring or training that will aid the employee in
developing or upgrading their work skills, Performance counselling might be provided, or if the
employee chooses, counselling to aid them in coping with other matters that affect their
performance might be provided. Alternately, an employee might be referred to a counsellor or
counselling service.
A manager, supervisor or experienced employee could work closely with the employee to aid
them in improving their performance. They might be able, without necessarily acting in a
coaching or mentoring role, provide a sounding board or to be available to answer questions or
to instruct the employee if they are having difficulty with tasks. These people will also act as role
models.
Reinforcing performance excellence
In today's economy human capital is an organisation's chief source of competitive advantage.

Companies need to attract, retain and motivate the right kind of people to hold their competitive
advantage. They need, therefore, to develop reward systems that acknowledge the market value
of employees and that reward employees for developing their skills and knowledge. Each
organisation needs a system that encourages high performance, motivates high discretionary
input and rewards excellence. Performance appraisal systems can be used to reward
excellence—by linking appraisal to bonuses and to promotion or training opportunities.
However, the need for regular and continuous acknowledgement and reward must not be
ignored. It is this continuous acknowledgement that reinforces good work practice and ensures
its continuance.
To acknowledge good performance make sure that employees are paid what they are worth not
what the organisation believes it can get away with paying. Consider how the efforts of
individual employees affect the performance of their team or work group, the department in
which they work or the organisation as a whole. Use these results when structuring bonuses or
rewards.
Offer sincere thanks. A well-deserved pat on the back, a written fetter of commendation, some
private or public words of appreciation, can be very motivating. They show that management
notices and cares about employee contribution. This must, however, be fair and equitable so that
it is not capricious and favouritism is not shown, as this will result in ill feeling.
Provide non-financial perks for employees. Top performers might be able to work from home for
some of the working week. They might be given opportunities to attend industry seminars,
workshops and social events.
Give high performers an afternoon off from time to time. You could also provide a generous gift
certificate to a good restaurant for high performing employees and their partners. Be creative
when considering rewards and remember that good rewards act as incentives—so that high
levels of performance will be maintained and employees will contribute to Improvement
procedures.
Give employees appropriate support so they can keep up the momentum. New challenges,
interesting projects, increased responsibility will act as rewards. Give employees who produce
outstanding work a say in where their talents will be used next. Provide coaching, mentoring and
advanced skills development so they can continue on their career pathways and feel valued and
valuable.
Class Activity 13
In what ways do you think excellent performance should be recognised and rewarded? Explain
the procedures that should be followed and explain why you think these ideas will motivate
employees.
4.5 Provide support services where necessary
Counsel individuals who continue to perform below expectations and implement the
4.6
disciplinary process if necessary
Learning Prompt
This will enable learners to Provide support services where necessary and Counsel individuals
who continue to perform below expectations and implement the disciplinary process if
necessary.
Provide support services and Counsel Individuals
Provide support services where necessary and Counsel individuals who continue to perform
below expectations and implement the disciplinary process if necessary
Performance counselling requires the effective application of conflict management 'nu

negotiation skills.
Counselling means giving direction, advice or guidance, as to a course of action.
It costs far less to improve a current employee's performance than to recruit and train a new
one, therefore, the effort should be made to counsel employees and provide opportunities for
improvement. Employees who continue to under-perform might require intensive counselling,
Performance counselling steps have previously been considered in this manual.
They include:
 collect reliable, valid and unbiased information regarding the performance

situation's
 notify the employee of the need for another meeting and inform them of the
reason for the meeting
 notify other relevant personnel managers or HR
 ask the employee if they wish to nominate an impartial observer to attend
the meeting set a mutually convenient time and date it might be, depending
on the nature of the problem, best to hold the meeting on neutral ground
Make sure that the employee knows what will be discussed at the meeting. If, for instance, the
employee's poor performance has not improved, then it is necessary to communicate this to the
employee so they can prepare to attend the meeting.
At the meeting
Refer to any previous discussion, recorded notes, agreements and plans. If a written
performance plan was drawn up, all of those attending the meeting should have an up-to-date
copy. Clearly explain the problem in terms of performance and outcomes that relate to the plan
arid to the performance agreement. Clearly explain what areas of performance are still not
meeting expectations. Give praise for any improvements that have been made,
Ask the employee to give their perspective/ opinion. Give them opportunities to ask questions
and offer ideas, Reaffirm that they are valued and that your intention is to work to achieve a
mutually satisfactory resolution. Make sure that the employee understands that you are not
happy with progress overall and that appropriate improvements must be made.
Ask again what you can do to help. Be prepared to support the employee.
Determine and document a new agreed improvement plan with specific timeframe and dates for
re-evaluation. Organise follow-up meetings and progress evaluations.
Document and record all discussion and outcomes.
Alternatives
You might need to consider alternative problem solutions:
• time off to rest, and reassess

• delegation of some tasks to others
• job restructuring
• transfer to another team, department or section
• retraining for other positions
• professional counselling
It might also be necessary to consider referring the problem to higher levels of management
Progressive discipline
Soma. Organisations will have policies that outline the steps to be taken regarding progressive
discipline. While each organisation's processes might differ, the oasis steps for progressive
discipline will generally follow those outlined here.
Progressive discipline is the process of using increasingly severe steps or measures when an
employee fails to correct a problem after being given a reasonable opportunity to do so. The
underlying principle of sound progressive discipline is to use the least severe action necessary to
correct an undesirable situation. Increase the severity of the action only if the condition is not
corrected.
Some guidelines to consider are:
Thoroughly investigate the situation which includes obtaining the employee's explanation or
response prior to administering discipline. Document the process and results of the
investigation.
It is acceptable to repeat a step if it will correct the problem. This could be the case if some time
has passed since it was last necessary to address the issue and the situation has only recently
reappeared. Perhaps the employee misunderstood or perhaps there is value in repeating the
step with clearer Instructions. If repeating the step works, the situation has been resolved
without escalating it unnecessarily. However, be aware that an employee might be led to believe
that nothing worse will happen if you continually repeat a step.
The goal is to modify the unaccented behaviour or improve the performance. The goal is not to
punish the employee but to more strongly alert the employee of the need to correct the
problem,
The circumstances of each case and the judgement of managers and supervisors as to the least
severe action that is necessary to correct the situation will help determine which step/s to use.
Early, less stringent, measures will normally be skipped for serious offences such as theft,
fighting, drug or alcohol use or sale, these are offences that could result in justifiable unfair
dismissal.
It is acceptable to have a witness or note-taker present when meeting with an employee during
the progressive discipline process. The witness/ note-taker should not be a peer of the employee;
however, the employee might organise to have their own witness present.
When implementing progressive discipline, the following three elements should be present;
1. The employee must be explicitly informed of the unacceptable behaviour or performance

and is given specific work-related examples. It is not sufficient to assume that the
employee knows what the problem is.
2. Acceptable behaviour or performance standards must be explained and the employee
given reasonable time to comply. This could be- a longer timeframe if a skill needs to be
learned.
3. The employee must be informed of the consequences of failing to comply. This is not a
threat, rather it gives the employee reasonable expectations of the consequences if
change does not occur.
If these elements form part of an organisation's diplomacy policy or if they are supported by
legislation, disciplinary actions might be overturned completely or reduced to a lesser level when
any of these elements are missing.
Warnings
When performance counselling, or methods of accommodating the needs of the employee are
unsuccessful, each organisation MI have specific procedures in place.
These might relate to warning systems:
1. Verbal ~ official and recorded as such, preferably with a witness present.

2. Written ~ build in information, responses, and commitments made in any performance
evaluations and counselling processes and any information related to the verbal warning.
Include a statement about the past, reviewing the employee's history with respect to the
problem; a statement about the present, describing who, what, when etc. of the current
situation, including the employee's explanation; and a statement of the future,
describing the organisation's expectations and the consequences of continued failure.
Timeframes attributed to the improvement result should be included, along with
measurement criteria.
3. Final ~ leading to dismissal. If dismissal/ termination seem to be the only or best option,
take care to adhere to prescribed dismissal procedures. In all such systems there is an
implicit time allowance for employees to demonstrate improvement, If you need to
resort to dismissal procedures, ensure that the procedures are fair and seen to be fair
and tha.t the dismissal process complies with industrial legislation applicable in your state
or territory. In most cases a written notice of termination will be drawn up.
Suspension from duties, without pay, might in some cases be an option; however, this would
only be useful if time away from the workplace is likely to impact on performance. It is a process
that might be followed in cases where infractions of safety rules of major significance have
occurred. If suspension without pay is used there should be a written record of the process
specifying reasons, dates and an explanation of whether this is to act as a final warning,
Managers or supervisors involved in a disciplinary action should keep complete and up-to-date
records of all interactions with the employee and of any actions that result from the disciplinary
action, keep records of notes made by witnesses.
Investigating employee behaviour
When dealing with situations where the behaviour of an employee is In question, where an
infringement of policy is the cause of an investigation or where employee behaviour is likely to
lead to instant dismissal, interview involved parties and witnesses as soon after an incident as
possible.
The information they have to offer:
 will be fresh in their minds

 will be less likely to have been contaminated or confused by conversations with other
employees
This should prevent them from changing their story at a later time, Make sure to:
1. Gather facts from the parties and/or witnesses directly involved
Third party evidence usually is not useful evidence. Hearsay is usually referred to as gossip
or the grapevine. It occurs when Jill tells 3oe who tells Marie who tells the supervisor what
happened. Tracing this kind of information back to its source is generally an exercise in
futility. If you hear these kinds of rumours and can identify the original source, go directly
to it.
2. Avoid getting or using opinions
Opinions are frequently unreliable, regardless of whether they come from other members
of the management team or from an employee's peers. They are filtered through the
Individual's own personal experiences arid perceptions, not the situations at hand.
3. Backup subjective information with documentation, if at all possible? His is especially

critical when making observations about work performance. Keep copies of examples of
poor performance. Take notes or keep logs of work assigned and completed. Maintain a
record from which specific incidents can be cited,
4. Get the best evidence possible
Hard evidence is always better than a description of it, i.e. get samples of errors.
5. Prepare individual documents recapping the information provided by each of the parties
and/or witnesses
Ask each individuals to review the information they provided for additions or corrections,
and then have the document signed or initialled by the person who gave the Information.
Date all information. Act as quickly as possible to resolve the issue so that the employee is
not subjected to undue delays. If additional time is needed, inform the employee that the
situation is under investigation arid give a date by which action, if any, will be taken.
6. Preserve documentation
Be sure to keep all documentation used to support disciplinary action in a file that is readily
accessible. This information might be used in support of a grievance or other industrial
action that the employee could file as a result of the discipline issued. This file should be
preserved for approximately three years (or for the length of time determined by relevant
legislation in your state or territory) from the date of the incident.
Class Activity 14
1. Why should counselling be instigated in the case where performance does not improve?
2. What are some of the options that might aid an employee in resolving performance
issues?
Counsel individuals who continue to perform below expectations and implement the
4.6
disciplinary process if necessary
Terminate staff in accordance with legal and organisational requirements where

4.7
serious misconduct occurs or ongoing poor-performance continues
Learning Prompt
This will enable learners to Counsel Individuals who continue to perform below expectations and
implement the disciplinary process if necessary and terminate staff in accordance with legal and
organisational requirements where serious misconduct occurs or ongoing poor-performance
continues.
Terminate staff in accordance with legal and organisational
Termination
The termination of someone's employment is a difficult time for both the employer and the
employee. This section talks about how to make sure a dismissal is fair and lawful.
Termination of employment
What steps should an employer take to make sure a dismissal is fair? What can an employee do if
they think they have been unfairly treated?
It is lawful for an employer to dismiss an employee if it is a genuine redundancy or if the dismissal

would not be considered harsh, unjust or unreasonable or if the dismissal is consistent with the
Small Business Fair Dismissal Code.
When the Fair Work Commission considers whether a dismissal is harsh, unjust or unreasonable,
they take into account a range of factors including:
If there's a valid reason for the dismissal relating to the employee’s conduct or capacity if the
employee is notified of the reason and given an opportunity to respond if the dismissal relates to
unsatisfactory performance, then whether the employee is warned about it before the dismissal.
From 1 January 2010, the National Employment Standards (NES) replaced the non-pay rate
provisions of the Australian Fair Pay and Conditions Standard (the Standard). Under the NES, the
rules relating to redundancy and redundancy pay have been modified. The NES also cover notice
periods when an employee is dismissed.
Unfair dismissal
Are you eligible to make a claim? Find out when to take action and who to contact. If you’re an
employer learn how to ensure that a dismissal is not unfair and what to do when someone claims
unfair dismissal.
Unlawful termination
The national workplace system protects an employee from being dismissed on certain grounds,
including those that are discriminatory. Find out what unlawful termination means and how to
take action.
Redundancy
How do you determine whether a redundancy is genuine and what action can you take? Do
redundancy payments apply and how much should they be? This section can help you with these
and other questions.
Small Business Fair Dismissal Code
The Small Business Fair Dismissal Code applies to small business employers in the national
workplace relations system.
Notice periods
Under the National Employment Standards if an employer terminates the employment of a

permanent employee, the notice period they must provide depends on the employee’s length of
service. Find details here.
Final pay
Final pay is what the employer owes and must pay an employee, when the employer ends their
employment. This section gives you details of what those entitlements are and tells you how the
Fair Work Ombudsman can get involved if they are not paid.
Unfair dismissal legislation
If managers decide that an employee's performance is so poor as to necessitate dismissal, they

must be aware of the requirements and possible consequences of dismissal under unfair
dismissal laws. The primary piece of legislation relating to unfair dismissal is the Fair Work Act
2009. Under this legislation, employees can claim that their dismissal was harsh, unjust or
unreasonable and, thus, unfair, Unlawful dismissals are primarily based on discrimination
grounds and notice periods.
Determinations as to whether or not dismissals are unfair will be based on;
1. Whether there was a valid reason for the dismissal. An employer can justify an
employee's termination on the grounds of incapacity; that is, that the employee did not
have the skills arid competence required to perform their job. The terminated employee
cannot argue that this is an Invalid reason for termination merely because they did their
best to do their job, if their best was less than what was required to do the job. If, when
hired, the employee did not hold themself out to have the necessary skills and
competence to do the job, however, and the employer did not provide the employee
with the necessary training to obtain those skills and competence, then the employer
may be found not to have a valid reason for dismissing them. If the employer relies on
performance grounds that are unsound, invalid or indefensible, then no amount of
warnings and counselling by the employer can avoid a finding that the dismissal is harsh,
unjust or unreasonable.
2. Whether the employee was notified of the reason for dismissal and given an
opportunity to respond if the employee's dismissal related to unsatisfactory
performance, then the employee should have been warned about their inadequate
performance in easily understandable terms. In doing this, the employer must make it
clear that the employee's ongoing employment is at risk if their performance is not
improved.
3. If the dismissal related to unsatisfactory performance by the employee, whether or not
the employee had been worried about that unsatisfactory performance before they
were dismissed.
4. The degree to which the size of the employer's organisation might impact on the
procedures which were followed when dismissing the employee and the degree to
which any absence is a dedicated human resources specialist or adviser might impact on
the procedures which were followed.
5. Any other matter which Fair Work Australia considers relevant.
For further information, refer to section 387 of the Fair Work Act 2009 (Cwth).
Case study—Consider the following example:
You are the new FIR manager for XDF Manufacturing Pty Ltd, a small plastics manufacturer
supplying light switch and power point covers to the building industry and to hardware retailers.
The business employs 120 people in the manufacturing sector across three shifts.
On arrival at work on the third day in your new job, there is a note on your desk from the night
shift manager, Jim Stavrou stating that Manuel Schapiro, an injection moulding operator had
resigned during the night shift and that a replacement is needed as a matter of urgency.
The witnesses' evidence
Witnesses indicate that Manuel was having trouble with a new machine, but no one knew what
the correct settings were. Manuel continued to try to get the machine to work to standard, but
in the process made approximately 3,000 reject parts. The night shift manager saw the rejects
and became angry.
A discussion then took place between Manuel and lirn in the manager's office. Manuel clocked
off and departed about ten minutes later. Jim then informed employees at lunch break that
Manuel had resigned.
In a discussion later with you, Jim verified the witness reports, but indicated that Manuel was
lazy and that he did not concentrate properly on his work. He indicated that his failure to adapt
to the new machine was now a safety risk and was costing the company a lot of money. Jim
indicated that Manuel had been counselled on numerous occasions to improve his poor work
performance and had not improved. Jim said that the issue was not a problem because Manuel
had resigned—he had not been terminated
The records investigation:
Record type Information
Period as permanent employee Five years.
Evidence of induction No records.
Evidence of moulding operator training No records.
Evidence o:' counselling given to Manuel No records.
Evidence of written disciplinary warnings given to Manuel No records.
Evidence of training provided for new machine No records.
Evidence of involvement in safety incidents No records.
Manuel's file had a letter of recommendation dated 1997 from a previous supervisor
recommending that Manuel become a permanent employee and receive a $3.00 per hour
Increase as a result of his strong work ethic. Recommendation was approved and actioned.
The night shift manager has been in his current position 12 months and has not kept records of
any discussions held with Manuel,
You immediately take the matter to the general manager, Theo, and advise him that the
company should make contact with Manuel with a view to resolving the matter. The company is
exposed to a claim for unjust and unfair dismissal, as there is virtually no evidence of poor
performance, no evidence of performance management actions taken and clear evidence that
common procedural fairness in termination was not followed. The general manager, however,
decides to allow the resignation to stand.
The claim
Manuel applied to Fair Work Australia In which he stated that he was unfairly dismissed. After
the matter could not be resolved in conference, it was listed for hearing.
Class Activity 15
Describe how setting goals bring success in an organisation?
Assessment Matrix
Performance Criteria Assessment Task

Consult relevant groups and individuals on work to be allocated and
Class Activity 1
1.1 resources available
Class Activity 2
Develop work plans in accordance with operational plans Class Activity 2
1.2
Class Activity 3
Allocate work in a way that is efficient, cost effective and outcome
1.3 focussed Class Activity 3
Confirm performance standards, Code of Conduct and work outputs

Class Activity 4
1.4 with relevant teams and individuals Class Activity 5
Develop and agree performance indicators with relevant staff prior
Class Activity 5
1.5 to commencement of work Class Activity 6
Conduct risk analysis in accordance with the organisational risk
Class Activity 6
1.6 management plan and legal requirements Class Activity 7
Design performance management and review processes to ensure
Class Activity 5
2.1 consistency with organisational objectives and policies Class Activity 6
Train participants in the performance management and review
Class Activity 6
2.2 process Class Activity 7
Conduct performance management in accordance with
2.3 organisational protocols and time lines Class Activity 7
Monitor and evaluate performance on a continuous basis

2.4 Class Activity 8
Provide informal feedback to staff on a regular basis

3.1 Class Activity 11
Advise relevant people where there is poor performance and take
3.2 necessary actions Class Activity 11
Provide on-the-job coaching when necessary to improve

Class Activity 11
3.3 performance and to confirm excellence in performance Class Activity 12
Document performance in accordance with the organisational
Class Activity 11
3.4 performance management system
Class Activity 12
Conduct formal structured feedback sessions as necessary and in
Class Activity 13
3.5 accordance with organisational policy Class Activity 14
Write and agree performance improvement and development plans
Class Activity 14
4.1 in accordance with organisational policies Class Activity 15
Seek assistance from human resources specialists where appropriate Class Activity 11
4.2
Class Activity 12
Reinforce excellence in performance through recognition and
Class Activity 13
4.3 continuous feedback
Class Activity 14
Monitor and coach individuals with poor performance Class Activity 14
4.4
Class Activity 15
Provide support services where necessary Class Activity 11
4.5
Class Activity 12
Counsel individuals who continue to perform below expectations
Class Activity 13
4.6 and implement the disciplinary process if necessary
Class Activity 14
Terminate staff in accordance with legal and organisational
requirements where serious misconduct occurs or ongoing poor- Class Activity 14
4.7
performance continues Class Activity 15
Appendix—Competency review tool
BSBMGT502B Manage people performance
Unit Descriptor
This unit describes the performance outcomes, skills and knowledge required to manage the
performance of staff who report to them directly. Development of key result areas and key
performance indicators and standards, coupled with regular and timely coaching and feedback,
provide the basis for performance management.
No licensing, legislative, regulatory or certification requirements apply to this unit at the time of
endorsement.
Application of this Unit
This unit applies to all managers and team leaders who manage people. It covers work allocation
and the methods to review performance, reward excellence and provide feedback where there is
a need for improvement. The unit makes the link between performance management and
performance development, and reinforces both functions as a key requirement for effective
managers. This is a unit that all managers/prospective managers who have responsibility for
other employees should strongly consider undertaking.
Elements and Performance Criteria

1.1. Consult relevant groups and individuals on work to be
allocated and resources available
1.2. Develop work plans in accordance with operational plans
1.3. Allocate work in a way that is efficient, cost effective and
outcome focussed
1.4. Confirm performance standards, Code of Conduct and work
1. Allocate work
outputs with relevant teams and individuals
1.5. Develop and agree performance indicators with relevant staff
prior to commencement of work
1.6. Conduct risk analysis in accordance with the organisational risk
management plan and legal requirements
2.1. Design performance management and review processes to
ensure consistency with organisational objectives and policies
2.2. Train participants in the performance management and review
process
2. Assess performance
2.3. Conduct performance management in accordance with
organisational protocols and time lines
2.4. Monitor and evaluate performance on a continuous basis
3.1. Provide informal feedback to staff on a regular basis
3.2. Advise relevant people where there is poor performance and
take necessary actions
3.3. Provide on-the-job coaching when necessary to improve
performance and to confirm excellence in performance
3. Provide feedback
3.4. Document performance in accordance with the organisational
performance management system
3.5. Conduct formal structured feedback sessions as necessary and
in accordance with organisational policy
4.1. Write and agree performance improvement and development

plans in accordance with organisational policies
4.2. Seek assistance from human resources specialists where
appropriate
4.3. Reinforce excellence in performance through recognition and
continuous feedback
4.4. Monitor and coach individuals with poor performance
4. Manage follow up
4.5. Provide support services where necessary
4.6. Counsel individuals who continue to perform below
expectations and implement the disciplinary process if
necessary
4.7. Terminate staff in accordance with legal and organisational
requirements where serious misconduct occurs or ongoing
poor-performance continues
Critical Aspect of Assessment
Evidence of the following is essential:
 Documented performance indicators and a critical description and analysis of

performance management system from the workplace
 Techniques in providing feedback and coaching for improvement in performance
 Knowledge of relevant awards and certified agreements.
Required Skill
 Communication skills to articulate expected standards of performance, to provide
effective feedback and to coach staff who need development
 Risk management skills to analyse, identify and develop mitigation strategies for
identified risks
 Planning and organisation skills to ensure a planned and objective approach to the
performance management system.
Required Knowledge
 Relevant legislation from all levels of government that affects business operation,
especially in regard to occupational health and safety and environmental issues, equal
opportunity, industrial relations and anti-discrimination
 Relevant awards and certified agreements
 Performance measurement systems utilised within the organisation
 Unlawful dismissal rules and due process
 Staff development options and information.
Employability Skills
 This unit contains employability skills.
Reference list
Asch, D & Kaye, G 1996, Financial Planning, 2nd edn, Kogan Page, London, 8artol et al, 1995,
Management; a Pacific Rim Focus, McGraw-1111, Australia.
Bounds, G, Yorks, L, Adams, M & P,anney, G 1994, 'Management role responsibilities' In Beyond
total quality management: toward the emerging paradigm, McGraw-Hill Inc., Sirkgaphore,
Carnegies, Jones, Norris, Wig & Williams, 2001, Accounting.. Financial and Organisational
Decision-making, McGraw-Hill, Australia.
Collings, S, 'Taylor, M & Barite, S 1994, The Small Business Management Rook, Macmillan,
Australia.
Commonwealth of Australia, 1984, Human Rights for Humankind. Sexism, Australian Government
Printing Press, Canberra.
Drucker, P 1974, Management. Tasks, Responsibilities, Practices, Butterworth-Heinemann,

Oxford.
Fnglish, PAI 1995, How to Organise and Operate a Small Business, Allen & Unwin, Australia,
Hicks, 50 1986, information Systems In Business: An introduction, West Publlshing Co., St Paul.
http://www.maaw.info/BalScoreSum.htm
Learner Guide, ASPIRE LEARNING RESOURSES, Version 1.1
http://performancemanagement.career-builders- club.com/performance_management_the_righ
http://www.jcu.edu.au/jobs/docs/JCUDEV_008295.html
Kaplan, R & Norton, D 1996, Tire balanced scorecard: Translating strategy into action' Business
School Press, Boston,
London, M & Smither, 1995, Can multi-source feedback change self-evaluations, skills
development and performance? Theory based applications and directions for research,
PerF;onnel Psychology, 4a, 803-839.
McLaughlin, E 1994, Australian Management, A Practical Guide for Managers, Supervisors and
Administrators, 3rd edn, TAFE Publications, Collingwood,
Peters, T 1998, Thriving on Chaos, Handbook for a Management Revolution, Macmillan, London.
Rachman, D.) 1993, Business Today, 7th edn, McGraw-Hill, New York.
Robbins and Mukerjl, 1994, Managing Organisations, New Challenges and Perspectives, 2nd edn,
Prentice Hall, Sydney.
Tornow, Vsf & London, M (eds), 1998, Maximising the value of 360degree feedback, Jossey¬sass,
San Francisco.

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BSBMGT502 Manage people

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Class Activity 6 ............................................................................................................................. 45

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Learning Prompt ........................................................................................................................ 104

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Purpose of the learning resource

It supports and motivates self-directed learning via a learning partnership between:

BSBMGT502 Manage people performance Student Workbook v1.0 Page 1 of 128

Learning support materials

 theory (information) as per Competency

Theory is identified by this icon.

Learning prompts are identified by this icon.

Assessment activities are Identified by this icon.

BSBMGT502 Manage people performance Student Workbook v1.0 Page 2 of 128

References are identified by this Icon.

This Section provides the following:

Appendix—Competency review tool

This appendix consists of review tools for:

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Learning support materials

Session 1 ~ Allocate work

Performance criteria covered in this session:

1.2 Develop objectives for performance-management processes to support organisational

Read through the material and look at the assessment activities.

This will enable learners to Develop objectives for performance-management processes to

Consult relevant groups and individuals

Internal sources supply information about:

 vision and mission

Externally generated Information might encompass:

Consultative processes will enable managers and frontline managers to identify:

Resources and resource management

 an available source of wealth

Resource management involves:

 recruiting suitably qualified managers and staff

BSBMGT502 Manage people performance Student Workbook v1.0 Page 6 of 128

1. Why is it necessary to consult relevant groups and Individuals on work to be allocated

2. What resources might be required in a business organisation?

BSBMGT502 Manage people performance Student Workbook v1.0 Page 7 of 128

Session 2 ~ Allocate work

Performance criteria covered in this session:

1.2 Develop work plans in accordance with operational plans

Read through the material and look at the assessment activities.

Develop work plans

Quality outputs require quality inputs,

Specific resources will depend on;

 the organisation's goals and objectives

 the type arid volume of work done and outputs generated

Information management plans and system design

 vehicles/ transport and travel options

 making them feel valued

Opportunities for individuals and work groups to contribute might include:

Effective resource use will be reinforced by.

Making the best use of knowledge and of human resources

These resources can be managed effectively through:

BSBMGT502 Manage people performance Student Workbook v1.0 Page 12 of 128

BSBMGT502 Manage people performance Student Workbook v1.0 Page 13 of 128

Session 3 ~ Allocate work

Performance criteria covered in this session:

Read through the material and look at the assessment activities.

Develop work plans in accordance with operational plan