Learner Guide SITXHRM006

Learner guide
Monitor staff
performance SITXHRM006
Disclaimer
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Version number 2.0
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Copyright 2016
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Didasko Digital ACN 167 648 062 and may not be used or reproduced in whole or in part without
the prior written consent of Didasko. All rights reserved.
Contents
Overview........................................................................................................ 3
Section 1: Monitor staff performance and provide feedback ..........................
3 Section 2: Recognise and resolve performance problems...........................
27 Section 3: Implement performance management systems
.......................... 45
Glossary .......................................................................................................
67
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Please note the follow ing condition
This Didasko learning resource should be used as a training tool for students and
trainers. While the information contained within addresses the elements and performance
criteria, and the knowledge and performance evidence of individual competencies it
remains the responsibility of the training organisation to ensure it meets training
framework requirements and to provide additional documentation where necessary.
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SITXHRM006 Monitor staff performance
Overview
Why do some managers seem to have everything under control? They make everything
look effortless!
Their employees know what they need to do and get on with it without being asked. They
seem satisfied with their work and continually strive to do their best.
What special skills do these managers have and how do you get them? Well, it all starts
with clear performance expectations and regular, constructive feedback.
This unit will help you to work within an organisation’s people management system to
develop the skills needed to effectively monitor and improve the performance of your
employees.
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After all, your employees are your biggest asset.
Let’s look at what you will learn on completion of this unit.
Section 1: Monitor staff performance and provide feedback
Section 2: Recognise and resolve performance problems
Section 3: Implement performance management systems

Section 1:
Monitor staff
1 performance and
provide feedback
In this section you will learn the following.
• How to consult and inform colleagues about expected standards of performance.

• How to monitor ongoing performance.
• How to provide colleagues with guidance and support.
• How to provide recognition and reward for achievements and outstanding performance.
• How to identify and organise coaching or training.
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Where does monitoring staff performance fit within the role of

managing?
Management could be described as the process of getting activities done through other
people. This involves the organisation, decision-making and deployment of resources to
achieve organisational goals. Resources are what you use to get the job done and include
financial resources, human resources, information technology and equipment.
Managers need systems and strategies in place to evaluate how effectively resources are
being used towards achieving company goals. This is where monitoring comes in.
Click on each of the functions that managers perform to learn more.
Planning
Jacqueline BesControlling Organising
Leading Staffing
Planning Defining goals, KPIs (glossary) and targets and establishing strategies for
achieving them.
Thinking about how and what is involved in achieving goals.

Organising Determining what tasks are to be done, who is to do them and how
decisions will be made.
It means ensuring that the right people with the right skills and resources
are available when needed.
Staffing These are the traditional human resource functions of a manager’s role.
• Recruitment and selection.

• Performance management, performance review, rewards and
succession planning.
• Induction and training.
• Remuneration, employment conditions, workplace health and safety.
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Leading Motivating employees to achieve organisational goals.

Delegating duties and directing others.
Building teams: coaching, leading by example, managing conflict,
communicating effectively.
Networking, developing relationships.
Controlling This is often referred to as monitoring.

Actual performance is compared to plans. What needs to be improved?
Making adjustments and corrections, when necessary.
Continuous improvement (Kaizen) (glossary).
Note
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This unit will use the term ‘manager’ to describe anyone with a position of responsibility for
leading, monitoring and reviewing the performance of another person in the workplace.
Why do you need to monitor staff performance?

Managers work with their team to set goals and actions plans to achieve those goals.
Employees need to know what level of performance is expected of them and have the
skills, abilities, resources and systems in place to deliver on those performance
expectations. Individual feedback is essential to this process.
Click on the dot points to learn about the benefits of monitoring performance.
⦿ Employees know and understand what is expected of them in their job role. ⦿
They have the skills and knowledge required to deliver on those expectations.
⦿ They receive regular, constructive feedback and have an opportunity to discuss their
work performance.
⦿ They are rewarded for their performance through a reward and remuneration
strategies.
⦿ They are counselled for underperformance and/or behaviour which is out of
alignment with the organisation’s values and goals.
⦿ They are supported in their efforts to achieve optimum performance.
An effective monitoring system works as a feedback mechanism for future planning,

organising and implementing strategies to achieve goals.
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Current activities and systems
Think about your current job or a role you are familiar with. What activities or systems are
in place to help employees perform effectively?
You have 30 seconds to describe them.
Click start to begin.
Describe the activities or systems that an organisation can have in place to help
employees perform effectively.
How did you go? Compare your answ ers to these.
• Job descriptions
• Training, coaching
• Performance appraisal
• Regular feedback
informal
• Inductions
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• Reward and recognition systems
• Standards and procedures
Systems to manage staff performance

Effective employee performance requires an organisation-wide approach to monitoring
and managing performance. It involves both informal and formal performance
management systems.
Click on each of the headings to learn more about performance
management.
Performance
standards and
objectives
Provide regular
feedback
Performance Performance
management appraisal
Communicate
expectations to
employees
Training and
development
remuneratio
n
Correcting
under
performance
Reward and
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Performance standards and objectives

All main work activities should have clear performance standards in place. Goals and/or
KPIs are developed in conjunction with employees. Employees know what they need to
do to achieve goals.
Communicate expectations to employees

Expectations are communicated in a variety of ways to cater to a diverse workforce.
Policies, procedures and standards are continuously improved and updated.
Regular informal feedback

Regular, informal feedback is essential to coaching and improving performance. Even if
performance is excellent, employees need to know what they are doing well, be
encouraged to guide others and see you appreciate their performance.
Training and development

On-the-job coaching and training is provided to support employees to achieve
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performance expectations. Assessment confirms the employee has the required skills and
knowledge. Employees have tailored individual professional development plans which
help them reach performance and career goals.
Correcting underperformance
When employees are not achieving performance expectations, they receive feedback,
counselling and coaching to address performance gaps.
Performance appraisal
On an annual basis, employees participate in the formal appraisal of their work. This
confirms performance achievements and gives the employee an opportunity to discuss
career goals and update their professional development plans.
Rew ard and remuneration

Employees’ efforts are formally acknowledged and rewarded through recognition and
reward schemes.
What does monitoring on a day-to-day basis involve?

Frontline managers need to monitor efficiency, productivity, service levels and service
standards on an ongoing basis. The best way to do this is through close contact with
colleagues and day-to-day operations.
Click on the pictures to learn more.
What does monitoring involve?
• Ensuring that employees are complying with standards, procedures and company
policies.
• Comparing actual performance against planned performance.
• Identifying and when necessary, documenting differences between actual and planned
performance.
• Correcting differences and applying strategies to get performance back on track.
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What are service standards?

Service standards are the quality level, depth and range of services offered. For example,
some organisations provide a five-star, full service experience, while others provide a
more limited service experience.
What are service levels or service rates?

Service levels or service rates are the performance metrics used to measure the customer
service. For example, how quickly customers are to be served, how many customers can
be served per employee or team per hour.
What are productivity rates?

Productivity commonly refers to the physical products produced by employees in a given
time, for example, meals made, documents produced, data entry rates, etc.
How do you monitor employee performance?

Effectively monitoring employee performance on an ongoing basis involves four
steps.
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1: Set
performance
expectations
3: Compare
4: Correct performance actual
2: Assess performance
performance and against
behaviours standards
You’ll learn more about this as you move through the unit.
Standard operating procedures and policies are integral to managing performance. Click
to the next screen to learn more.
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Standard operating procedures (SOPs)

Every business has standards and procedures to follow, which are documented in
manuals (electronic and paper) commonly referred to as SOPs. SOPs detail the operating
principles and practices that allow for quality control. They help manage performance and
achieve consistent results.
Standard: the quality aspects or levels expected, e.g., speed, accuracy, response times,
aesthetics (how something should look).
Procedure: the step-by-step process in which something is done.
Click on the icon to learn about the benefits of having SOPs.
Benefits of having SOPs
• SOPs detail specifications for quality control.

• Well-designed SOPs can be explained visually with flowcharts and diagrams to help
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employees to do their jobs.
• SOPs can help reduce and prevent errors, variations and waste.
• They streamline procedures and provide consistency in all aspects of your business,
including situations where the business operates across multiple locations. • They assist
in limiting liability regarding WHS (glossary) practices and other areas where there may
be liability for a breach of quality product and service delivery. • They provide the
foundation for training content and design and make it easier to assess employee
performance.
You can have organisation-wide SOPs and department specific SOPs. Certain elements
of SOPs are written after undertaking a benchmarking (glossary) process.
Typical standards and procedures

Organisations include a SOP for every aspect of business.
Click on the pictures to learn more about the different types.
Administration
• Recruiting and selecting staff

• Inducting a new employee
• Requesting leave, such as annual or sick leave
• Conducting performance appraisals
• Document presentation, e.g., reports, letters, faxes, brochures, etc.
WHS
• Manual handling procedures

• Food handling procedures
• Emergency procedures: fire, bomb threat, natural disaster, etc.
• Accident or incident procedures
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Service standards
• Complaint handling
• Answering the phone
• Meeting and greeting guests
• Handling VIP guests
• Personal presentation standards
• Product and quality service guarantees
Technology
• Use of social media at work

• Email management
• How to use relevant software
Work practices
• Taking a reservation
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• Cleaning procedures
• Performing a stocktake
• Receiving goods
General standards
• Cost minimisation
• Level of accuracy
• Punctuality
• Response times
• Waste minimisation
What are policies?

Policies are guidelines to help staff deal with everyday operational issues and ensure the
work practices abide by relevant regulations and law. Policies outline what is acceptable
or unacceptable according to the organisation’s values and standards.
Click on the senior personnel to learn the characteristics and benefits of a well
written policy.
Characteristics
• Adhere to legislation.
• Are in line with the organisation’s mission, values and standards.
• Are aligned with industry standards, accreditation and rating schemes aimed to improve
business, such as ISO standards for quality management and environmental
management.
• Clarify staff roles and responsibilities.
• Help establish empowerment and accountability (procedures may also do this). • Ensure
that decision-making and operational procedures are consistently and uniformly carried
out.
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Benefits
• Give staff protection in case of legal action.

• Give the business a framework for planning.
• Show that business is carried out in an efficient way.
• Enable staff to handle problems quickly, saving the organisation time.
• Assist with performance assessment.
Note
A Code of Conduct is the policy document that ties together the policies that guide
employee behaviour in the workplace. Click to the next screen to learn more.
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Code of Conduct policy
A Code of Conduct policy clarifies the expected standards of behaviour by staff in the
performance of their duties. These policies and standards apply to all staff in the
organisation and have a significant impact on organisational culture. These polices seek
to avoid situations where employees are unsure of what is considered ‘acceptable’
behaviour.
Click on the icon to find out more.
Typical policy and procedure documents within a Code of Conduct policy include conduct
and behavioural standards relating to the following.
• Use of alcohol and other drugs

• Employee dress code
• Use of social media
• Workplace bullying
• Equal opportunity, sexual harassment and discrimination
• Workplace health and safety
• Use of company owned property
• Fraud, theft, bribery and corruption
• Giving and acceptance of gifts and invitations
• Conflict of interest: where an employee’s personal interests may be in conflict with their
work role, for example a purchasing manager awarding a supply contract to a business
owned by a relative
• Misconduct and serious misconduct and consequences
• Performance management, discipline and termination
• Privacy policies
• Intellectual property
• Other ethical practices
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What are common characteristics of policies, standards and

procedures?
For documented policies, standards and procedures to be successfully implemented,
they should have certain key characteristics.
Click on the dot points to find out what these characteristics are.
⦿ Relevant
⦿ Current (updated regularly)
⦿ Written in collaboration with staff
⦿ Supported by training and induction
⦿ Readily available
⦿ Clear
⦿ Communicated in a variety of ways
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How do you effectively communicate these documents? Click to the next screen to learn
more.
How do you communicate policies, procedures and

standards?
Effectively communicating policies, procedures and standards is an ongoing process.
Click on the pictures to learn more.

The recruitment and selection process
It starts with the right person in the right job. This means having a detailed job description
(glossary) and person (job) specification (glossary) and a recruitment and selection
process that assesses against genuine job criteria.
The induction process

Here the company, department and job expectations are detailed. Code of Conduct,
performance expectations, SOPs and reward and remuneration systems are clarified.
Written communication
Company documents are made available in print media and electronically. Documents
should also be made available in other languages, braille, or in audio format to cater to
diverse groups of employees.
Meetings, emails, Intranet, social media

There are many ways organisations convey and reinforce their performance
expectations.
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In a nutshell
The greater the lengths an employer goes to in communicating organisational values,
policies and standards, the less risk they will attract if relying upon these for performance
management and disciplinary procedures in the future.
What are performance measures?

In addition to policies and SOPs, many organisations also use quantifiable performance
measures, such as KPI targets and goals.
Performance goals and targets describe what is to be accomplished by the individual

and/or the team or department over a defined period of time. They should be set in
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conjunction with the employee, so they have a sense of ownership over them and the
employee can participate in monitoring and measuring their own performance.
The goals or targets need to be SMART (specific, measurable, achievable, realistic and
time-based) and align with the organisation’s strategic direction.
Click on the letters to learn more about SMART goals.
SPECIFIC
exactly is to be accomplished? Who is involved?
S Where will it be accomplished and under what
conditions?
MEASURABLE
M What measures will be used to evaluate the success
of these goals? Progress points can also be written
into goals to help motivate staff.
A ACHIEVEABLE
Goals should be a challenge yet attainable within the
given resources and time frame. If staff perceive
goals as unachievable, they can be overwhelmed and
demotivated.
R
RELEVANT
Do employees understand how they link in with the
'bigger' picture? Goals should also be RECORDED.
Writing goals down ensures they are properly thought
T through.
TIME-BASED
By when? Timelines apply pressure, but again, they
should be achievable.
Goals should be written in terms of outcomes. What
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Note
Goals can be both long- and short-term and tend to focus on broader department and
organisational outcomes that may require the input of many people to achieve. Targets sit
within goals and KPIs. They focus performance on the specific, short-term outcomes along
the road to meeting goals.
Before preventing and managing performance can be investigated further, it’s important to
understand the components of effective communication. Click to the next screen to learn
more.
What is effective communication?
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Effective communication is the exchange of information, thoughts, opinions, ideas and
feelings between two or more people resulting in their mutual understanding.
Communication involves any behaviour, verbal or non-verbal, that sends a message to
someone. We could say communication has taken place when a message is sent to or
received by another person. Ultimately effective communication only takes place when the
message is received and understood in the way the sender intended. A lot can go wrong
in this process.
Click on the pictures to see the four components of communication.
Sender/Receiver encodes and decodes data.

Encoding and decoding a message is influenced by the following factors.
Nonverbal cues
Information is received verbally (words) and nonverbally. Nonverbal includes body
language, facial expressions, voice tone, pitch and pace. Interestingly, research suggests
that 93% of the information we receive and interpret in face-to-face communication is non
verbal!
It is important to ensure verbal and non-verbal cues match and to demonstrate

appropriate body language.
Timing
The timing of a message can influence how well it is received. In face-to-face
communication, it is important to ensure the receiver has time to give the situation his/her
full attention.
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Environment
The physical environment can influence communication. For example, if people are
uncomfortable because they are too hot or cold, the lighting is annoying or the chairs
uncomfortable, it will negatively affect concentration.
Values, beliefs and attitudes

How we interpret information is influenced by our values, beliefs and attitudes. These are
formed through many factors, such as education, religion, family life and media.
Channel
The channel is the chosen method of communication, such as face-to-face, email, instant
message, Intranet, telephone or letters. In choosing the right channel you must think
about the following.
• The importance of the message. Is it urgent, confidential? Generally this means face
to-face is more appropriate.
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• The audience. What are their language and literacy levels? Does the message need to
go to one person or several? Would this better suit an email or a meeting? • Is future
reference required? Does it need to be recorded in writing? • Preference. Consider what
channel people prefer. Some love email, others are big social media users and some
insist on face-to-face communication.
Message
What is the purpose or objective of the communication? Whatever channel is chosen, the
objective or reason for the communication needs to be clearly conveyed. Each message
has a specific purpose.
• Persuade someone to accept our ideas

• Convey important information
• Motivate
• Entertain
• Network
• Stimulate discussion and thought
Feedback
Feedback takes one-way communication to two-way communication. It helps the sender
ensure the receiver has understood the information as intended. More on feedback soon.
Click on the icon to see a diagram of the four components.
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Diagram of the four components

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Active listening
Listening and hearing are not the same thing. Hearing is a physiological process and
listening is what we do to construct meaningful messages during communication. It is very
common to ‘wait to talk’ rather than fully listening to others. Active listening means making
a conscious effort to hear what the other person is saying.
In correcting and improving performance, listening is essential to understanding the

employee’s needs to tailor improvement processes. The employee may also need
coaching on how to improve their communication skills, particularly listening skills. When
giving feedback, it is common for the receiver to go into a ‘defensive reasoning mode’.
This means they spend the discussion justifying their behaviour instead of really listening
to the feedback and therefore miss an opportunity to learn.
Click on the icon to see what active listening involves.
⦿ Listening to the whole message. Take into account the non-verbal cues. What are
they telling you? How do you think the person is feeling?
⦿ Paraphrase or re-state in your own words what you think you have heard, to ensure
understanding.
⦿ Don’t talk over the other person.
⦿ Avoid distractions. Give the speaker your full attention.
⦿ Try to put your own emotions aside and listen to the message.
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Barriers to effective communication

Barriers are things that get in the way of the message being effectively received. They can
happen anywhere in the communication process.
Click on the pictures to see some common barriers.
⦿ Use of jargon. Overcomplicated, technical language and use of abbreviations and

acronyms (glossary) can confuse and annoy people.
⦿ Lack of attention or concentration. Many things can interfere with someone’s
ability to focus. These could be distractions such as background noise, discomfort
and thinking of other things, like ‘what’s for dinner’!
⦿ Incorrect channel, for example, conveying lots of detail in a meeting that could be
better served by email.
⦿ Physical disability, for example, difficulty hearing.
⦿ Language differences, for example, difficulty understanding accents, or having
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English as your second language.
⦿ Cultural differences. Social norms and style of communication are influenced by
culture. For example, Australians tend to use a direct style of communication that
can sometimes be viewed as insensitive.
⦿ Perception and attitude. Everyone has perceptual biases that affect our attitude.
These could be stereotyped (glossary) views and prejudices.
⦿ Assumptions. It is common for people to assume communication is clear because
no one has said otherwise! It is important to seek feedback and ensure the message
has been received as communicated.
Why you need to be a good role model

As a manager, your behaviour serves as an example to others. This means not only
paying attention to your individual actions, but encouraging teamwork, cooperation,
growth and professional development, as well as acknowledging positive attitudes and
behaviours of others.
Employees look to emulate you. How can you provide corrective performance on
something you don’t do you yourself!
Click on these experienced managers for tips on successful role modelling.
Self reflection
Consider the feedback you receive from your managers. How could you improve? Seek
360 degree feedback (more on this in Section 3). What do subordinates, colleagues and
customers think? Continually assess the impact of your own behaviour.
Values and goals

Develop a clear picture of the type of manager you want to be. What do you want to
achieve? Establish your personal standards and values. Check they align with the
organisation’s standards and values.
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Walk the talk

Be consistent, honest and ethical. Be mindful of how you treat others, avoid office gossip
and talk positively about others.
People skills
Continually work to improve your people skills. This includes effective communication,
coaching, motivation and conflict resolution skills, as well as showing empathy and
respecting and valuing differences.
Hot tip
You need to be able to work effectively within a team, as well as lead and guide a team to
achieve goals. You not only monitor the performance of individuals, but the performance
of a team as a whole.
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Click to the next screen to learn about the characteristics of effective teams.
Characteristics of effective teams

Research into what makes an effective team identifies that teams not only share common
goals, they communicate effectively and support each other.
Click on the characteristics of effective teams to learn more about them.
Common purpose There needs to be a clear unity of purpose. Why has this team
formed? Does everyone understand their role and what is
expected of them?
Performance goals The team leader needs to clearly convey goals and the plan for
achieving them. To accept and strive for goals, it is better if
members have participated in setting them.
Diversity A team needs diversity. Too many people from the same background in
terms of age, gender, roles and experience can
result in a lack innovation and creativity.
Clear other. Effective teams have members who
communication trust and support each other.
Respect, active listening, participating in
discussion, seeking opinions and ideas,
Commitment and trust clarifying for understanding, constructive
feedback and avoiding interrupting. These
Beneficial team behaviours
are some beneficial team behaviours.
When, where and how are targets reviewed?
Evaluate effectiveness and celebrate
Effective review process successes. Review each other’s
How will the team communicate: in person or participation constructively.
electronically? Share information. Be open
and honest, yet respectful of others. The Members have a high level of
manager sets the foundation for effective self-awareness. They can analyse and
communication and must be the role-model. evaluate their own behaviour and
Commitment to team goals and to each contributions.
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Note
As you can see, besides a commitment to shared goals, a common theme is effective
communication. A manager needs to model and encourage open and supportive
communication.
Knowledge check!
It’s time to check your knowledge. What were some of the systems and procedures
required to monitor and manage staff performance?
You have 30 seconds to list them.
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What systems and procedures assist in monitoring and managing staff
performance? How did you go? Compare your answers to these.
• Comprehensive job description

• Recruitment and selection procedures
• Induction
• Training
• Performance appraisal
• Clear standards, procedures and policies
• Performance goals
• Ongoing feedback
• Reward and remuneration
• Acting as a good role model
Preventing performance problems

Effective and comprehensive performance management systems and procedures can do
a lot to prevent underperformance. This makes the workplace a lot happier for everyone.
Consistency is everything. It is helpful to think of the Hot Stove Rule when managing and
correcting performance. Developed by Douglas McGregor, the Hot Stove Rule draws an
analogy between touching a hot stove and undergoing discipline or corrective action.
Click and drag the hand onto the hot plates to learn about the Hot Stove Rule.
Advanced w arning
The stove is red and hot. You know if you touch it you’ll get burnt.
You know the policies, standards and procedures of the organisation and what will
happen if they are violated.
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Immediate
You touch the stove and you are immediately burnt.
To fully understand the cause and effect, corrective action needs to happen as close to
the performance problem as possible.
Consistent
Every time you touch the stove, you’ll get burnt.
You cannot be lenient one day and then harsh the next. Employees won’t know where
they stand with you and it will generate resentment.
Impartial
The stove doesn’t discriminate or play favourites. It burns everyone who touches it.
You provide corrective action based upon the act, not the person. Anyone who breaches
policy or doesn’t meet performance expectations is dealt with. Managers must then take a
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normal attitude towards the employee and not hold a grudge.
How do you give feedback effectively? Click to the next screen to find out.
How do you give effective feedback?

As managers, you need to give, seek and use feedback to improve not only the
performance of employees, but the team as a whole.
Feedback should be given with the right attitude, i.e. in the spirit of improvement, not
about finding fault. What training and support does the employee need to improve?
Feedback should be given consistently. Don’t wait for formal review processes or monthly
meetings.
Feedback should be two-way. The employee should have the opportunity to ask questions
and provide feedback too.
Click on the tabs to find out what the feedback needs to be.
Specific
Collect facts and data. Whether feedback is to a group or an individual, positive or critical,
it is the facts that matter. For example, ‘I was happy with your work yesterday’. What does
this mean? What were you happy with? You need to give specific examples. Focus on the
behaviours or actions, not on personality traits of the person.
Timely
Timing is important. As close to the event or issue the better. If you are giving a staff
member feedback about their performance on shift last night, it is better not to wait until
next week.
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Constructive
Feedback is not all that useful if it doesn’t provide information on how to improve. This can
be done directly with the employee, for example, ask ‘What do you think needs to be
improved?’ or ‘How can I help you improve?’ Importantly, if the feedback is critical, it is
important to discuss the issue in private.
Hot tip
Don’t give sensitive or negative feedback to people in front of others. It will only
embarrass the person, interfere with the learning process and contribute to poor morale.
Also avoid exaggerating to get your point across, as it can make people defensive. This
means avoid saying things like ‘you never’ and ‘you always’.
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How do you provide guidance and support?
It is often not enough to give feedback. Employees need guidance and support to help
them achieve performance expectations.
Click on the icon to see what guidance and support may include.
⦿ Coaching, training and development and advice on how to access these

opportunities.
⦿ Clarification of job role and responsibilities, including performance expectations and
performance objectives or measures.
⦿ Access to resources such as equipment, materials, staff, money and time to improve.
⦿ Forums such as meetings and Intranet blogs to discuss, evaluate and resolve
problems and work challenges.
⦿ Individual support and coaching to help deal with difficult interpersonal situations.
This may mean making referrals to appropriate experts both within the organisation
and externally.
How do you provide effective coaching?

Coaching is an essential management skill. You can provide coaching individually or to
teams, in a formal setting and informally in day-to-day corrective feedback.
You can break your coaching session down into six simple steps which incorporate the
key principles of training.
Click on the numbers to see the six simple training steps.
Step 1: Explain purpose and objectives
Step 2: Explain and demonstrate skills
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Step 3: Listen to trainee explanation
Step 4: Observe trainee demonstration
Step 5: Evaluate trainee performance
Step 6: Provide feedback

Mastering the demonstration process is important for any coach. Click to the next screen
to learn more.
How do you demonstrate clearly?

Click on each step to learn about the demonstration method.
• Give a short introduction to explain the objective of the coaching
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Give feedback
• Give feedback and encouragement.
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Introduce the task way the training creates a complete picture of a
competent performance. • Talking at this stage
can make the demonstration feel too long and
distract from learning.
Demonstrate at normal speed
• Now it's time to talk and break down the steps.
• As you explain each step, highlight any safety
issues and quality standard that must be
adhered to.
Demonstrate slowly
• Observe the trainee as they have their first

attempt at the task. • Remind them of steps,
Trainee standards and safety issues, where necessary.
demonstrates
session.
• If it's a practical task, it's great if you already • Have the trainee repeat the task under your
have a finished product for them to look at. supervision.
• You demonstrate the task without talking. This
How do you check understanding?

How do you know your feedback and coaching was effective? How do you identify the
need for further coaching and training?
You need to be proactive and check; don’t wait for an employee to tell you they don’t
understand and need more help.
Click on the tabs to learn different ways you can do this.
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Physical demonstration
• Ask employees to demonstrate practical tasks: taking a reservation, assembling
equipment, cleaning work areas, entering a booking for an event, disposing of waste,
checking deliveries, completing documentation, etc.
• Ask them to show you how they do the task.
• Observe them closely.
• Identify ways their physical demonstration varies from SOPs.
Role-play
• If employees are having trouble with a customer service task, get them to role-play it
with you.
• You can do this with many common scenarios in the workplace: answering the phone,
selling a product, promoting a service, resolving conflict, dealing with complaints,
taking orders, etc.
• Spot ways the employee’s communication, body language, attitude or behaviour varies
from SOPs.
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Verbal explanation
Get the employee to describe what they know or can do.
• Ask them how they would resolve a case study.

• Ask them to explain a common procedure step-by-step, or describe legislative, WHS or
hygiene requirements which relate to certain tasks they perform.
• Actively listen to their answers, check they’re correct, pinpoint gaps in their knowledge
or ways their descriptions vary from organisational requirements.
Q& A
Never ask an employee ‘Do you understand?’ To avoid embarrassment, most people just
nod their heads and say ‘yes’. Instead, ask questions to demonstrate their knowledge of
policies and procedures. Keep the questions open. This means the employee must
explain their answer. Open questions begin with ‘why’, ‘what, ‘how’, ‘when’ or ‘why’. Here
are some examples.
• ‘Would you like me to explain/show you again?’

• ‘What other information can I provide you?’
• ‘Is there anything you would like me to go over?’
• ‘Explain to me what you are going to do now.’
• ‘Can you outline what you will report back to me on?’
• ‘Can you show me what you are going to do?’
Spot gaps in their knowledge that you can work on together.
What if they don’t understand?

We all learn differently. If something is not understood, try a different approach. Include
information in different formats, such as verbal instructions, written materials and use
technology to help. Allow the employee time to practice. Go over the whole process again
if necessary.
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• Remind the employee why the policy or procedure is important.

• Advise them that you’re going to repeat your explanation and demonstration.
• Remind them that they can interrupt and question you at any time. •
Encourage them to ask the moment they don’t understand something. •
Explain what to do and how.
• Make sure that you check for understanding and give them a chance to ask questions
after every major step as you learned earlier.
• Go over a specific part of the SOP, policy or system again if necessary, until they
understand.
Hot tip
Some people are kinaesthetic learners. They learn by doing rather than watching or
listening. If you think this is the case with one of your employees, you might skip the
explanation itself and just demonstrate so they can copy you.
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What if you have identified a need for further coaching?
If you have identified a need for further coaching, training or professional development,
then organise this according to your company’s policy.
Click on the managers to see what this can involve.
⦿ Making a formal request for training by completing a ‘professional development form’

in writing or electronically and submitting it to senior management and/or HR. This
request is approved or denied in writing. Funding for the training may also need to
be approved. Costs can include the wages of the employee and the trainer,
resources and the costs of external training providers.
⦿ Scheduling the coaching or training for periods of time that will have the least impact
on business operations.
⦿ Completing appropriate records of training and coaching provided. This can involve
employees completing a professional development or skills register (HR data-base)
that tracks current skills, training and qualifications. Managers then sign to confirm
that training has been completed.
An important part of reinforcing expected standards of performance is to recognise and

reward achievements and outstanding performance. Click to the next screen to learn
more.
How do you reward and recognise performance?

We are all different. What you consider to be a reward, someone else might not even
want! For example, you think receiving a promotion is fantastic, but another employee
might not want the responsibility and is looking for flexible work, or the opportunity to take
more annual leave. The right reward can be a powerful motivator.
Rewards can be thought of as extrinsic and intrinsic.
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Extrinsic (or external) are tangible rewards: things given to you by the organisation, such
as bonuses, training opportunities and promotions.
Intrinsic (or internal) are intangible rewards: the feelings of satisfaction and achievement
that come from doing a job you enjoy. Mastering a skill, having a say in how you do your
job, enjoying your work and feeling like you make a difference are all intrinsic motivators.
Click on the icon to see a diagram of how extrinsic and intrinsic rewards work
together.
Diagram of total rew ard
Extrinsic:
Intrinsic: job developmental
satisfaction
social &
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financial
Total reward
There are many innovative ways organisations recognise and reward people. Rewards
can be individual and team-based. Usually an organisation will provide a combination of
both.
Click to the next screen to see some examples of formal reward and recognition
programs.
Formal reward and recognition programs

Click on the tabs to learn more about these rewards and programs.
Peer recognition programs
• Employee of the week, month or year.

▪ Staff have voting rights on who receives this award.
▪ Customer feedback is also used to help with decisions.
▪ Annual gala dinner event to celebrate employee of the year.
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• Acknowledgement of period of time employed. This can be letters of appreciation and

gifts for significant timeframes like five and ten years of employment. • Trophies and
certificates of appreciation given to individuals and teams for achieving KPI targets.
Developmental
• The opportunity to complete further education and training, either fully paid or partly
paid for by the company is considered by many to be a great reward. Education is
expensive and adds to skill levels, which means an opportunity to improve take-home
pay and obtain promotions.
• Financial support for completing further education, such as university degree courses.
• Scholarship programs.
• Sabbaticals. This is the term given to having time off to pursue study interests.
• In-house training programs.
• Cross-training to learn other job areas.
• Interstate and overseas exchange programs.
• Opportunities to attend conferences and join professional associations.
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Financial
• Commissions on sales.
• Monetary bonuses for achieving KPI targets and goals.
• Employee ownership plans. In essence, the employee becomes a part-owner by
receiving shares in the company.
• Profit-sharing schemes. At end of financial year, if the company has made a profit, the
business shares a portion of that profit with employees.
• Points reward systems whereby employees can use points earned to purchase rewards
of their choice from online gift sites such as Wishlist.com and RedBalloon.com
Social
• Health and wellness initiatives, such as gym memberships, staff sporting clubs and
discounted health care services.
• Footy tipping competitions.
• Celebration of religious holidays, birthdays and other special events throughout the
year.
• Staff drinks and nibbles provided once a month, or after meetings.
Hot tip
Don’t forget the importance of regular feedback and praise. Your acknowledgement of an
employee’s hard work does a lot to motivate, reinforce desired behaviour and contribute to
job satisfaction.
End of section
You have reached the end of Section 1.
Click to the next section to continue.
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2 Section 2:
Recognise and resolve
performance problems
• How to identify and investigate performance problems.

• How to use feedback and coaching to address performance problems.
• How to discuss and agree upon possible solutions with the colleague. •
How to follow up outcomes of informal counselling.
• How to organise and conduct a formal counselling session.
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What is underperformance?
Underperformance is the term used to describe an employee’s unsatisfactory
performance. An employee is underperforming when they fail to meet the organisation’s
standards, procedures, expectations or values.
While effective systems and procedures can do a lot to prevent underperformance,

inevitably there will be times when underperformance needs to be addressed.
Note
The term underperformance is preferred over poor performance because
underperformance is a more helpful term, suggesting that with training and time, the
employee can improve and meet expectations.
Extend your learning

1. What sort of things would you consider to be underperformance?
2. Have you ever worked with someone you thought needed to improve their
performance?
(a) If so, what was the impact of their underperformance on the organisation and
co-workers?
(b) Was their underperformance addressed? Why/why not?
3. How do you think you could manage the issue of an underperforming employee?
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80:20 rule on performance

The 80:20 rule or Pareto Principle was coined by management consultant Joseph Juran,
who named the principle after Italian economist Vilfredi Pareto. Pareto noticed that 80% of
the land in Italy was owned by 20% of the population. This 80:20 rule was noticed in many
areas of life.
Click on the tabs to learn about the 80:20 rule in the workplace.
The rule
• 80% of sales came from 20% of customers.

• 20% of an employee’s input (time, resources, effort) accounts for 80% of the output
(results, rewards).
• 80% of productive effort in a workplace comes from 20% of the employees. • 80% of the
causes of underperformance can be contributed to the work environment (lack of training,
resources, equipment) and 20% to the employee.
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While these figures are not an exact representation, they can help focus attention on the
impact of the smaller 20% and give managers something to reflect upon.
Rule highlights
The 80:20 rule highlights two important things in managing performance.
1. If 80% of productive efforts in the workplace come from 20% of employees, that means
that a good portion of employees are mediocre, average, or even below average.
While a certain number of people will always be mediocre, the organisation cannot
afford to let definite underperformance slip by and mediocre performance go
unchallenged.
2. Most of the time employees want to do a good job and are hampered by a lack of
support, training, tools and equipment required to perform. This highlights the need
to use critical thinking skills to investigate and evaluate the reasons for
underperformance and not just make assumptions about an employee’s character.
Wendy’s case
My manager called me into his office yesterday to talk about my performance. He said
that several customers had complained about poor service last week when I was on the
service desk. He said that if there were any more complaints he’d give me a formal
warning. I tried to have my say, but he told me to stop making excuses and improve, or
else.
I’m really upset about this and don’t want to work here anymore. Last week was a difficult
week because the computer database went down several times during peak periods and it
meant that customers had to wait longer. For some reason, a few orders submitted
through the system didn’t reach the purchasing department and so they were delayed. A
couple of customers were upset, but I thought I did a good job at handling their
complaints.
None of this was my fault, but I didn’t get a chance to explain.
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What are the signs of underperformance?

Every organisation has its own standards and performance expectations. However, there
are common areas that could be considered underperformance.
Click on the tabs to learn more.
Absenteeism
• Multiple cases of unauthorised leave

• Coming back late from breaks, taking additional unauthorised breaks, frequent
absences from their workstation
• Arriving late, leaving early
Lack of job efficiency
• Forgetting instructions, taking too long to complete tasks

• Missing deadlines, not taking steps to notify others and seek support when it looks like
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a deadline won’t be met
• Making mistakes, wasting materials
• Lack of care over equipment and resources
Poor w orking relationships
• Unacceptable interaction with other staff. Behaviour which is hostile or inappropriate,

intimidating other employees and harassment
• Negative attitude
• Problems providing positive, helpful customer service
• Use of offensive language
• Being dishonest
Non compliance
• Failure to comply with company policies, such as the grooming policy, customer service
policy, etc.
• Taking short-cuts to finish tasks; not following standards and procedures
• Making decisions outside scope of responsibility
What are the costs of underperformance?

What do you think are the costs of underperformance? To work it out, you need to
consider the obvious and hidden things that could contribute to the costs of
underperformance.
You have 30 seconds to list them.
List the obvious and hidden things that can contribute to the costs of
underperformance. How did you go? Compare your answers to these.
• Loss of productivity
• Cost of errors, such as wasted time and wasted products
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• Additional time management spent addressing problems

• Loss of repeat business due to customer dissatisfaction
The costs of underperformance

The costs of underperformance are difficult to calculate. Some research indicates that a
chronically underperforming employee can cost the company as much as 80% of the
employee’s annual salary. Sometimes more, if the result is dismissal and there are
replacement recruitment costs and potential legal costs of unfair dismissal claims.
Click on the icon for examples of underperformance costs.
⦿ Poor morale of team members who can be affected by the situation

⦿ Loss of production or service provision
⦿ Wasted resources
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⦿ Lost opportunities, such as to attract new business or keep repeat business
⦿ Time managers and HR spend managing the problem
⦿ Legal advice
⦿ Replacement recruitment costs
⦿ Training new staff
⦿ Payout costs, if employee is made to leave
Note
In 2004, global research by the Future Foundation found that a manager could spend as
much as 41 days a year dealing with underperformance. Managerial time that could be
better spent on things that add value to employees and the organisation!
Who is responsible for managing underperformance?

The direct line manager or team leader should manage underperformance. It is common
for line managers to seek support from HR or senior management, particularly if they lack
confidence or are inexperienced in handling underperformance. Follow your organisation’s
procedure on handling underperformance and always ask for guidance if you need it.
Although a challenging and often uncomfortable process for both parties,

underperformance needs to be addressed promptly and cannot be left until the formal
performance appraisal process.
Click on the icon to learn about the potential negative effects of failing to address
performance problems early.
⦿ Underperforming employees mistakenly believe their performance is satisfactory

without feedback to the contrary. This makes it more difficult when months or even
years down the track a manager wants to address the underperformance.
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⦿ Performance may continue to decline, adding to the already growing

underperformance costs.
⦿ Behaviour breeds behaviour. Others may lower their standards to match the
underperforming employee.
⦿ Employees who are performing comparatively well can find the lack of management
action de-motivating, contributing to poor morale, disengagement and a lack of
respect for their manager.
In a nutshell
To handle situations of underperformance, frontline managers need clear procedures to
follow, support from their organisation and training in how to manage these situations.
Show initiative and enterprise skills and take early action to address performance
problems.
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Should you use informal or formal counselling?
Unless the matter is a serious breach of company policy as outlined in the company’s
Code of Conduct policy, any attempts to correct underperformance should be done
informally first.
Typically informal approaches are for minor problems and coaching is offered to improve
performance. Informal approaches can follow the same process as formal processes in
investigating the performance gap. However, formal improvement plans are generally not
developed.
Click on the icon to learn more.
When informal attempts to correct performance fail, it is time to move onto formal
counselling. Formal counselling is a structured process as outlined in the company’s
employee handbook or HR policy. It involves a meeting where the performance gap is
discussed and a written action/improvement plan is developed. This is followed up with
another formal counselling session to assess whether improvement goals have been
achieved.
Click to the next screen to learn about informal performance improvement.
Informal feedback and coaching

The first thing to do is to assess actual performance against expected performance to
determine the performance gap. Then you can discuss the underperformance with the
employee, problem-solve together and develop an action/improvement plan and
timeframe for improvement.
Click on the headings to see how the process works.
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performance Gap Expected

Actual
performance
Performance
development
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Actual performance
Investigate the issue carefully. Remember the 80:20 rule. Is the poor performance due to
the work environment, or the employee?
What evidence do you have of current performance? Examples can include: missed
deadlines, complaints, errors, unfinished tasks and checklists, work samples, etc. Include
written evidence or documentation where possible.
Identify the performance gap

The performance gap is the difference between the desired performance and the actual
performance. Focus on measurable aspects of performance. Assess the gap against
KPIs, policies and SOPs.
Clarify expected performance

Clarify the expected performance. Be able to give examples of expected performance.
Refer the employee to the job description, KPI targets, SOPs and policies such as the
Code of Conduct.
Performance development
Discuss performance gap with the employee.
Use assertive ‘I’ messages. Focus on the problem, not the person.
Problem-solve and agree on actions together. Actions could include: further training, time,
equipment and other resources necessary to improve performance, an adjustment to
workload or reorganisation of work practices.
Evaluate/Follow -up
Check the employee’s progress on a regular basis, give feedback and offer training and
assistance.
Click to the next screen to learn how to communicate assertively.
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Assertive communication strategies

It is common to feel a bit nervous or apprehensive about managing underperformance.
The conversation can be uncomfortable and although you can’t control how others will
respond, you can control your own behaviour.
Assertive communicators are effective in handling performance management situations.

They are not afraid to address problems early. They respect the opinions of others and
speak calmly and confidently, working towards finding a mutually satisfying solution.
Click on the blue bird to learn more about assertive communication strategies.
⦿ Confront uncomfortable and potentially difficult situations with confidence.

⦿ Focus on the problem and don’t get personal.
⦿ Express feelings and needs clearly, honestly, appropriately.
⦿ Approach conflict with a ‘win-win’ attitude.
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⦿ Listen without interrupting.
⦿ Speak calmly and clearly.
⦿ Show respect for others and their feelings and opinions.
⦿ Make good eye contact.
⦿ Use open body language gestures.
⦿ Use ‘I’ messages, rather than ‘you’ messages.
Using ‘I’ rather than ‘you’ messages can help create an environment of open
communication. Listen to an example on the next screen.
How a ‘you’ message can be restated as an ‘I’ message

Click on the supervisor to hear the difference between a ‘you’ and ‘I’
message.
You message
‘You’re late again! You make things really difficult for the rest of the team. It’s just
irresponsible and unfair to your colleagues when you come in late.’
I message
‘Sam, the shift started 20 minutes ago. I feel let down when you come in late because we
have one less pair of hands to set up. It makes it a stressful start to the shift and puts us
behind for the rest of the day.’
In ‘you’ type messages, the other party only hears blame, judgement and criticism. It
tends to put the person in the defensive reasoning mode, where they make excuses and
stop listening. Feelings are hurt and the situation can quickly escalate into conflict.
Click on the icon to learn why the ‘I’ message has three parts.
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The ‘I’ message normally has three parts.

1. Describes the behaviour
2. Describes the feeling the behaviour creates
3. Describes the effect the behaviour has
‘I’ messages are particularly powerful in showing empathy and demonstrating that you can
identify with the other person’s feelings even if you don’t agree with what the person is
saying or how they are saying it.
Remember to avoid exaggerating by saying things like ‘you always’, or ‘you never’. This
often leads to an argument. Instead, give concrete examples of the behaviour.
In a nutshell
You can’t completely avoid saying ‘you’. However, before you say something corrective,
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always rehearse in your mind how you will say it without going into a blaming, attacking
mode. Think about describing the behaviour, the feeling the behaviour creates and the
effect it has.

Find a partner to role-play a discussion on underperformance in the following areas. Try to
apply assertive communication strategies.
• Missed deadlines
• Customer complaints about the employee
• Tasks not finished on shift
• Not abiding by grooming policy
• Wastage and errors made.
Corrective action and support

Section 1 looked at how to provide coaching. Put these skills into practice.
Create an environment of open communication, continuous learning and support. Share
your knowledge and experience. Provide your employee with tips and tricks you’ve
learned along the way that you believe have made a difference to your performance. Be
positive and encouraging, and give the employee a chance to provide input into their
learning and performance improvement.
Click on the pictures from left to right to see the process.
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Demonstration Observation Feedback Questions

Ask the employee to • mistakes steps,
demonstrate the task where necessary.
• ways they could
step by step, improve.
explaining what Correct mistakes.
they’re doing as they
go. Provide
suggestions for
Hot tip improvement.
Watch them closely Encourage the
for: employee to ask
• omissions questions and clarify
Sometimes it’s better to ask ‘How could you have done that better?’ rather than interrupt
them in the middle of a task.
Note
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Remember to apply other strategies to enhance learning and support and to check
understanding. These include: role-play, Q&A sessions and written materials in a variety of
formats.
What if your informal approach of corrective coaching and feedback doesn’t work and you
need to provide formal counselling? What do you do then? Click to the next screen to
learn more.
Performance counselling checklist

Before you undertake formal performance improvement counselling, it is worthwhile
completing a checklist. It will help you assess the need for formal counselling and ensure
you are fully prepared.
Are you prepared? Click on the tabs to learn more.
Performance level
Checklist to assess level of performance.
❑ Is there an up-to-date position description in place?

❑ Did the employee receive a full induction?
❑ Has the employee received all the training required to perform their role?
❑ What is the performance expectation?
❑ What is the gap between actual and desired performance?
Describe the shortfall in terms of behaviours
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Performance gap
Checklist to determine the importance of the performance gap.
❑ Is the gap really worth addressing? Who or what is affected by the underperformance?
❑ Would the employee’s performance and business results be better if the gap was
addressed?
Poor performance
Checklist to consider what could be causing poor performance.
❑ Could there be a lack of training?

❑ Is there a lack of equipment and resources that is contributing to the problem?
❑ Has there been a lack of support?
❑ Is there an attitude or behavioural issue?
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Aw areness
❑ Has informal performance improvement been undertaken?
❑ Has the employee been made aware of the underperformance issue?
❑ If so, how and when?
Note
Important! Ask yourself, ‘Am I being fair and basing decisions on job-relevant
information?’ Ensure you abide by relevant workplace relations, privacy and anti
discrimination legislation.
Steps to informal counselling

Before moving into formal counselling, review the steps to informal counselling. There are
many similarities.
You have 30 seconds to list the five steps.
List the five steps involved in informal counselling.
How did you go? Compare your answers to these.
1. Investigate actual performance. Collect evidence.

2. Identify the performance gap; the difference between desired performance and actual
performance.
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3. Clarify desired performance. Refer to the job description, SOPs, KPI targets and
company policies.
4. Performance development: discuss the performance gap with the employee.
Problem-solve and agree on actions for improvement.
5. Follow up: continue to provide feedback and coaching and review performance.
How do you conduct formal counselling?

As the counselling session is formal, the employee is given formal notification of the
performance management meeting. This is done in writing, usually via email, but may be
followed up with a letter. The employee is advised of the meeting purpose, time and place.
Who is included in the formal counselling session? Click on the dot points to find
out.
⦿ Two management-level employees are usually present; usually the employee’s
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immediate supervisor and manager. If the organisation has an HR department, an
HR representative may also be present.
⦿ The employee is advised that they are able to bring a support person with them,
such as a colleague or union representative.
⦿ Conduct the meeting in a comfortable, private space. Ensure other employees
cannot hear the conversation.
⦿ Turn off mobile phones and block incoming calls on landlines.
⦿ Ensure you have clear documentation of the performance gap and expected
performance.
⦿ Refer to your organisation’s policy for conducting formal counselling sessions.
Click on the icon to revisit the steps.
Formal counselling steps

The steps to conducting formal counselling are the same as informal counselling, with one
added step: a written performance improvement or action plan.
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performance Gap Expected
Actual
performance
Performance
development
Performance
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plan
Click to the next screen to learn about performance improvement plans.
Performance improvement plans

Performance Improvement Plans (PIPs) are a tool used to assist performance
improvement of underperforming employees or those employees who have demonstrated
unsatisfactory behaviour and conduct in the workplace. PIPs are discussed and agreed
upon in the counselling meeting after performance gaps and expectations have been
clearly defined.
Click on the icon to learn more about PIPs.
⦿ Desired performance should be made clear and include SMART goals where
possible. Allow a realistic timeframe for improvement, e.g., 30 days or 60 days.
⦿ PIPs must include a definite timeframe in which the employee’s progress and
performance will be reassessed to determine improvement or underperformance.
⦿ Details of support, such as training, coaching, feedback and resources required to
reach performance expectations should be noted on the plan.
⦿ The employee’s supervisor should monitor progress towards goal achievement and
provide support where appropriate.
⦿ Everyone present in the meeting must sign the PIP.
⦿ PIPs should always be documented, including any progress meetings and the issues
discussed. The original is kept with HR/management and a copy given to the
employee.
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PIP template
Performance Improvement Plan

Participants
Employee name: Position: ID number: Supervisor’s name: Department:
Manager’s name: Department:
HR rep’s name:
From: To:
Performance improvement
period:
1st interim review 2nd interim review 3rd interim review

Objective: To provide you with a formal performance improvement plan to correct performance in
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areas that need improvement. To meet the performance expectations of your job description, you
must improve in the specific area(s) as listed below.
Performance improvement areas
(Specific areas which need improvement)
Performance improvement goals

(Clear performance goals and timeframes for improvement)
Performance improvement plan

(Actions to be taken, including training and resources required to assist in meeting improvement
goals)
I have read the above and agree with the assessment, comments and actions
arising. I agree with the review date of ___________________
Participants’ signatures
Employee’s signature:____________________ Supervisor’s signature:___________________
Manager’s signature:____________________ HR rep’s signature:_______________________
How do you deal with difficult situations in performance

meetings?
Apply assertive communication strategies and continually work on improving your
interpersonal skills. Remember to focus on the behaviour or underperformance, and the
effect of the underperformance. Don’t get personal. Encourage open conversation and
work towards acknowledgement of underperformance. From here, you can discuss and
agree upon a PIP.
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Click on the icon to see the things you shouldn’t and should say.
What to say in difficult situations.
Problem Don’t say this Say this

Employee refuses to take responsibility.’ seeing?’
responsibility.
or better still …
‘It’s part of my job to help

employees perform to the
best of their ability. I want to
help you figure out what you
‘You’re not well liked by need to perform more
others. People find you too effectively.’
Employee is
direct. It comes across as ‘Have you thought about how
regularly in conflict with
‘Is there a chance there’s you come across to others?’
other team members.
‘You’re not taking something you’re not
or better still …
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Employee has poor anticipating customer needs
customer service skills is crucial to our business
success. As you’re aware,
we received three complaints
from customers about your
service over the past two
weeks. I’d like us to discuss
how we can improve your
‘Don’t blame others. Take service skills.’ ‘We are not
responsibility for your own here today to talk about X.
performance.’ We are here to talk about
Employee blames others ‘I don’t have my facts wrong.’ your performance. How do
for their underperformance you see your performance in
this area?’
Employee claims you have ‘It’s OK. Don’t worry about it. ‘I will check on this issue after
your facts wrong. It’s not that important.’ our meeting and get back to
you. Right now, let’s focus on
Employee gets emotional ‘Working effectively with what we have agreed upon
rude.’ others is an important part of and discuss
your job role and key to the how we can improve your
success of our business. I performance.’ ‘I understand
have received feedback from that this is upsetting for you,
others indicating they have but we need to resolve the
had difficulty in working with situation.’
you and we need to explore
how to change that.’ Offer tissues, water. Sit
‘We get a lot of ‘How would you rate your quietly and allow the person
customer complaints about customer service skills?’ to gain composure. If this
you. You’ve got a bad doesn’t work and the situation
attitude.’ or better still … escalates, advise that you
will take a short break and
‘Providing friendly, resume in 10 minutes.
professional service and
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The employee may be unhappy about the performance improvement meeting and feel
they have been unfairly treated. In this case, they may choose to lodge a grievance. Click
to the next screen to learn more.
Note
People may cry because they are angry and frustrated, not just because they are sad.
They might be embarrassed by their emotion and be unable to control it. Stay calm, show
empathy and give them a chance to compose themselves. It’s important that they feel
heard in order to resolve the situation.
What is a grievance policy and procedure?

A grievance is an employee complaint. Every organisation should have a clear policy
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detailing its stance on preventing and addressing employee complaints. It is not
uncommon for an employee to feel angry and upset after a formal counselling session and
if they feel unfairly treated, they may make a formal complaint.
Click on the printer to see an example of a grievance policy statement.
Grievance policy statement

We are an equal opportunity employer and committed to creating an inclusive and
harmonious working environment. We do not tolerate discrimination, bullying, harassment
or victimisation of staff.
We will attempt to resolve employee complaints as quickly as possible and support a fair
and equitable process. No assumptions are made or actions taken until all relevant
information has been collected and all parties have access to support should they need it.
Anyone unhappy with the outcome or decision made has an opportunity to appeal.
All people involved in handling the grievance will treat the matter in the strictest
confidence. No information will be released to a third party without the written consent
from those involved.
In a nutshell
A policy will highlight the impartiality, confidentiality, timeliness of the grievance procedure
and that complainants (those making the complaint) must be free from unfair
repercussions or victimisation. The process for appeals should also be highlighted.
Hot tip
Managers are less likely to experience grievances when there are clear performance
management systems and procedures in place, they provide regular feedback and
coaching, investigate performance problems, gather evidence of underperformance, and
involve employees in this process.
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Grievance procedure flow chart

The grievance procedure is often represented as a flow chart, with timeframes for
addressing problems included.
Click on the headings within the flow chart to learn more.
Preliminary action
Employees are encouraged to try and resolve any grievances directly with
the person(s) concerned.
grievance with your
immediate
If I am not comfortable to
raise
Step 1: Raise the
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supervisor/manager gather evidence. HR to obtain advice and
information on options.
Do so as soon as the issue occurs, grievance with my
preferably within three working supervisor?
days.
Immediate supervisor or manager If I am not satisfied with the
to investigate and resolve issue outcome?
within one week. Matter
Step 2: Raise the Each person involved in the
grievance with your HR complaint is interviewed and can
department within three bring a support person such as
working days union representative or colleague
to the meeting.
Employee then has two options:
informal and formal proceedings. HR to make a decision regarding
Formal process the matter.
The HR department is to People involved are to be advised

investigate the complaint within in writing of the outcome of the
matter.
two weeks.
Each person involved in the not
Informal process
complaint is to be notified in writing resolved
of the complaint and asked to An ‘off the record’ discussion with Matter resolved
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Step 3: External process • Bullying, rosters, pay
When complaints are not and conditions, work
resolved within the safety, unfair dismissal.
organisation, the employee can
seek external advice and
Human Rights Commission
support.
• Discrimination,
Depending on the nature of the
Matter resolved complaint, the employee has harassment based on
Matter the following options. discrimination, sexual
not harassment, victimisation.
Fair Work Australia
resolved?
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End of section
Click to the next section to continue.

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has been intentionally left blank.

Implement
performance
3
Section 3:
management
systems
• How to implement formal performance management systems.

• How to conduct individual performance evaluations openly and fairly.
• How to complete and file performance management records.
• How to agree on courses of action with colleagues and follow-up in the workplace.
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What is a performance appraisal?

Performance appraisal is a process of observing an employee’s performance in relation to
their job requirements over a period of time (e.g., 6 months or 12 months) and then
making an appraisal of it. It is a formal, structured system of measuring job-related
behaviours and the employee’s contribution towards organisational goals.
Click on the pictures to learn more about the appraisal process.
⦿ It involves both the employee and their manager completing an appraisal tool or
questionnaire which guides the appraisal process and forms the basis for
assessment.
▪ The employee evaluates their own performance.
▪ The manager evaluates the employee’s performance.
⦿ Organisations with an HR department will organise the appraisal system and tool.
⦿ The employee and manager complete the appraisal tool prior to the appraisal.
⦿ The employee and manager meet to discuss and compare results. This is known as
the appraisal interview. It can last up to two hours.
⦿ All areas of the employee’s performance are discussed and generally given a rating.
⦿ The employee has the opportunity to discuss their future goals and aspirations within
the company and training needs. Suggestions for improvement as well as things
they may be unhappy about in their current job may also be addressed.
Note
Due to the time-consuming nature of appraisals, most are done on an annual basis.
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Why do organisations have formal appraisal systems?

Although employees should receive regular feedback from their managers, some
managers are better at this than others. A formal appraisal system ensures all employees
receive feedback on their performance for development and improvement and it gives the
employee a forum for discussing their career objectives.
The appraisal system can help in other ways. Click on the tabs to learn what these
areas are.
Developmental
• Recognising good performance increases confidence, morale and motivation

• Personal professional development
• Addressing weaknesses and building on strengths
• Promotions, transfers and placements
• Training and development goals
• Career planning
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• Improving communication between employees and management
• Competency building
• Two-way feedback: suggestions for improvement and raising grievances
Administrative decisions and uses
• Confirmation of employment once the probationary period is finished

• Retention and termination decisions
• Remuneration (glossary) reviews and decisions
• Identification of underperformers
Documentation
• Legal requirements: to ensure the job grading and pay system is fair, to provide
feedback and development in claims of unfair dismissal
• HR decisions
HR strategy
• Goal identification and evaluation of goal achievement

• HR planning
• Training needs identification
• HR systems evaluation
Note
The linking of remuneration decisions to the appraisal process is hotly debated. Those for
it claim it helps to motivate people and makes a real difference in employee performance.
Those against it claim employees are more likely to compare themselves to each other,
which can lead to feeling unfairly treated and this can contribute to poor morale. It also
requires clear, objective measurements in place.
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What makes a good performance appraisal system?

Performance appraisal sits within an organisation’s HR strategy for monitoring and
managing employee performance. For the appraisal system to work effectively, it must be
clear how it fits in with this system and be effectively administered and managed.
Click on the headings to learn more.
Set goals
Plan
Reward
Annual
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appraisal
Set goals Review
Regular achievements New plan
feedback
The organisation has clear goals which are effectively communicated to departments and
employees. Departments and individuals have goals and/or KPIs with targets for
performance. The employee has some input in setting and monitoring these targets.
Plan
Identify learning needs. Employees have an individual training plan aimed to address their
learning needs, to develop the skills and knowledge required to achieve their goals.
Regular feedback
Nothing covered in the appraisal should come as a surprise. The employee should have
received regular informal feedback on their performance.
Review achievements
If the appraisal is conducted annually, it is necessary to hold a half-yearly meeting to
review progress.
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New plan
Identify and plan to meet new learning needs. Continue to provide regular, informal
feedback on performance, achievements and learning.
Annual appraisal
At least once a year, the employee meets with their manager for a formal review of their
performance. The employee also evaluates their own performance and has the
opportunity to discuss career and professional development goals and make suggestions
for how their role can be improved.
Rew ard
Reward and recognise achievements.
How do you prepare for the appraisal?
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Most organisations have a set time of the year that appraisals are conducted. It can easily
take a month for a manager to process all the appraisals for their employees! Think about
the time spent gathering supporting data, preparing employees, completing appraisal
forms and conducting the appraisal meetings, writing up results and evaluating the
process.
Click on David to learn about his experience.
Hi. I’m David.
The first time I conducted employee appraisals, I grossly underestimated how much time it
would take me. I’ve only got six employees in my team, so I thought ‘how hard can it be?’
Because I was new to the process, I attended a three-hour training session with HR on
how to complete the evaluation forms and conduct the interviews fairly. It still took me an
hour to prepare the appraisal paperwork for each employee. I had trouble rating some of
my staff in some competency areas because I couldn’t come up with examples of
performance.
Each appraisal interview took between one and a half and two hours, plus another 30
minutes afterwards writing up follow-up notes for training plans and professional
development requests. Then I had to compile the completed paperwork for HR, meet with
them to debrief and provide each employee with a written copy of their action plan. Phew!
All in all, I didn’t have much time for my regular work over the two weeks it took me to get
through those appraisals.
Click on the icon to see how the appraisal can be done in three
steps. Preparing for the appraisal can be done in three steps.
Step 1: Gather performance data

Step 2: Schedule the appraisal
Step 3: Prepare for the appraisal meeting
Each step will be examined over the following screens.
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STEP 1: GATHER PERFORMANCE DATA

The first thing to do is compile data and documentation relevant to the employee’s
performance. This will help you make a fair assessment of the employee’s performance
and complete the appraisal tool.
Click on the icon to learn about gathering performance data.
If you’re conducting an annual appraisal, there’s a tendency for the manager to reflect on
the employee’s performance over the past few months, but this is unfair, as it doesn’t
consider the performance over the past year, or performance period under review.
To help with fairness, keep an electronic or paper-based diary or journal and write up a
summary of performance for each employee at the end of each month. Note
achievements, KPI results, training and professional development undertaken, feedback
from customers and staff and any other relevant information. This information may be
stored on the employee’s HR file or database.
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Some organisations use a 360 degree feedback system to provide a wide range of
information about skills, performance and working relationships. Click to the next screen
to learn about this feedback.
360 degree feedback
While traditional appraisals involve self-evaluation and management evaluation, as the
name suggests, 360 degree feedback involves gathering feedback from all people who
interact with the employee in their job role. It takes a multi-dimensional approach to
feedback.
Click on each of the headings to learn more.
Manager
Self clients
Peers
Subordinates
Customer/
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Self
The employee evaluates their own performance.
Manager
The manager rates the employee’s performance.
Peers
Co-workers provide feedback on the employee’s performance. This is often done via
anonymous evaluation forms. Departments which work closely together may also provide
feedback on the performance of the department as a whole.
Customers/clients
Feedback from customers and clients is also considered when reviewing performance.
Feedback is gathered through regular customer/client satisfaction surveys.
Subordinates
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When team leaders, supervisors and managers are reviewed, their staff have the
opportunity to provide feedback on their effectiveness as a manager. This is usually done
through anonymous evaluation forms.
How effective is the 360 degree feedback process?
There are a number of factors that help 360 degree feedback to be effective.
Click on the dot points to learn what factors help 360 degree feedback become
effective.
⦿ Keep the peer feedback surveys brief and ensure the questions posed are relevant
to the person’s job role.
⦿ Respondents have credible contact with the person being appraised and so are in a
position to be able to provide valid feedback.
⦿ Train employees on how to give feedback that is specific and constructive.
⦿ Feedback from co-workers and subordinates is kept anonymous. ⦿ The
process is closely monitored and evaluated.

Conduct an Internet search for the term ‘360 degree feedback’ and read more about the
process. Answer the following questions.
1. What do you think are the benefits to the employee of receiving 360 degree feedback?
2. What do you think are the benefits to the organisation of using 360 degree feedback?
3. What difficulties can you see in administering this system?
4. What are the potential disadvantages or pitfalls of using 360 degree feedback?
5. What suggestions would you offer to an organisation to ensure they fairly use 360
degree feedback?
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STEP 2: SCHEDULE THE APPRAISAL

Once you have compiled the data, you are ready to schedule the interviews. Give plenty
of notice, so that both you and the employee have time to reflect on performance and fill
out the evaluation forms.
Click on the icon to learn about scheduling.
⦿ Block out an appointment in your diary or calendar for each employee. Be generous
with time, as they often take longer than anticipated. Allow for time at the end of the
meeting to make further notes and finish paperwork.
⦿ Give the employee two weeks’ notice of the date and time of their appraisal.
⦿ Ask employee to reflect on their performance and complete the appraisal forms prior
to interview.
⦿ Ensure employees are clear on the performance appraisal process and reasons for
it. Address concerns and queries. This could be done in a department or team
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meeting.
STEP 3: PREPARE FOR THE

APPRAISAL MEETING
Click on the steps to learn how to prepare for the interview.
Step 1 Complete the appraisal tool for each employee. Review each employee file.
Concentrate on work patterns that have developed. Remember that what you write here
will be reviewed by the employee. Be prepared to give examples of performance that is
above or below the standards expected. Focus on the behaviour and don’t get personal.
Step 2 Complete forms ahead of time. Then reflect on them and re-read before
interview. Try to avoid rating bias (this will be covered later in this section). Step 3
Prepare the meeting room.
• It is a good idea to use a designated meeting room, rather than your

office, as it is a neutral place, free from distractions.
• Position chairs on a 45 degree angle, rather than across a table. This
helps to relax the employee and create a conversation, rather than it
feeling like an interview.
• Provide water and tea and coffee, if possible.
What exactly is evaluated in an appraisal meeting? Click to the next

section to find out.
51 2016 Edition
Hot tip
It is not unusual for someone to get emotional for positive and negative reasons in an
appraisal meeting. Have a box of tissues placed discreetly to the side, in case they are
needed.
What will you evaluate and discuss in the appraisal meeting?

There are many different appraisal methods and tools that can be used. Regardless of
what is used, the employee’s performance is often assessed in the following three areas.
Click on the tabs to learn about these areas.

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Skills and behaviours
• Quality of work
• Knowledge of work
• Customer service
• Ability to work with others
• Initiative
• Punctuality
• Professional presentation standards
• Effective use of resources
• Ability to work to procedures
• Level of motivation/enthusiasm
• KPIs, targets or goals achieved
Once these are addressed the appraisal will move onto employee development.
Employee development
• Responsibilities the employee is unclear on

• Things the employee would like to do more or less of
• Training and development
• Career path
• Goals for improvement; these are developed into an action plan
Finally, other areas of concern or issues that the employee wants to raise can be
discussed.
Areas of concern
• Barriers that prevent the employee from doing the job

• Suggestions for improvement
It’s now time to look at the different appraisal tools and forms that can be used to evaluate
employee performance. Click to the next screen to learn more.
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Appraisal methods
There are several appraisal methods and tools an organisation can use. It depends on the
size of the organisation and its HR objectives.
Some methods involve comparing employees’ performance against each other and then
ranking employees from highest performing to lowest performing.
Other methods involve comparing performance against criteria, such as targets achieved,
job competencies or behaviours.
Click on the pictures to see the different appraisal methods.

Job description rating method
The job description is used as a basis for the manager to check off duties as either
‘competent’ or ‘not competent’. The job description is written in terms of job competencies,
rather than a list of duties.
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Essay method
The appraiser writes a statement that best describes the strengths and weaknesses of the
employee, with recommendations for development.
Critical incidents
The manager keeps a journal of times when an employee has performed particularly well,
or poorly, over a period of time. The manager then draws on these critical incidents to
assess overall performance.
Graphic rating scales

An employee’s performance is rated on a numeric scale (usually a 1 to 5 scale) for key
work behaviours and/or attributes, such as job knowledge, productivity and attendance.
Behaviourally Anchored Rating Scales (BARS)

This method is a combination of critical incident and rating scales. A specific appraisal tool
is developed for each position. Job-specific behaviours are identified and rated. Each level
of rating is defined in terms of competency.
Management by Objectives (MBO)

The manager and employee agree on responsibility areas and performance measures.
Measureable objectives or KPI targets are then set. Performance is assessed against the
achievement of these targets.
Forced distribution
Key performance areas are identified. Employees are evaluated against these and ranked
from highest performing to least performing. A set proportion of employees will fall within
these rankings, similar to that of a normal bell curve.
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Mixed method
A combination of some of these methods.
As you can see, there are a few systems to choose from! Over the following screens, the
four most common methods will be looked at in more detail. These include: graphic rating
scales, BARS, MBO and forced distribution.
Graphic rating scales

This is one of the most widely used performance appraisal methods. It involves using a
numeric rating scale, often 1 to 5, with 1 being unsatisfactory and 5 exceeding
expectations. The manager rates an employee’s performance on a variety of job
behaviours, e.g., quality of work, punctuality, initiative, teamwork, etc., and will support the
rating with examples of performance.
Graphic scales allow for quantitative comparison of performance from one appraisal
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period to the next. It can also be used to generate an overall average rating for each
employee.
It is favoured by many organisations because it is less time-consuming to develop. The

one form is used for all positions within the organisation. However, as the form is not
adapted to each position, it may not be suitable for all jobs within the organisation. Criteria
can overlap and it can be hard to justify low ratings.
Click on the icon to see examples of graphic rating scales.
1 2 3 4 5 Very poor Poor Satisfactory Very good Excellent
12345
Below Needs expectations
improvement Exceeding expectationsOutstan
expectations ding
Meeting
5 Outstanding Performance consistently exceeds standards and KPI targets set for
the position.
4 Exceeding expectations standards required. Regularly meets KPI
3 Meeting targets.
expectations Performance is inconsistent. Behaviour
2 Needs sometimes does not meet expectations.
improvement Targets are often met, but there is room for
improvement.
1 Below Performance does not meet requirements in
expectations several critical factors. Performance is
Performance is often above the standard inconsistent and unreliable and behaviour
required and the employee sometimes needs improvement. KPI targets are
exceeds KPI targets. regularly missed.
Performance is consistent and meets the
Click to the next screen for an example of a graphic rating performance appraisal.
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54
Sample graphic rating appraisal form

This is an example of how a performance appraisal tool using graphic rating scales may
look. It is not complete. The performance areas evaluated could go over several pages.
Click on the icon to see an example of a performance appraisal.

Employee name __________________________ Employee ID ________________________

Position _________________________________ Department ________________________
Appraised by ____________________________ Appraisal date _______________________
Reason for appraisal __________________________ (annual, promotion, end of probationary period)
Performance period from: _________________to________________
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Instructions: Reflect on the employee’s performance over the whole performance period. Refer to
supporting notes and evidence collected over this time. Check the appropriate rating for each
performance area. Indicate ‘N/A’ if not applicable.
Definition of performance ratings
12345
Below behaviour needs not meet meets the sometimes exceeds
expectations improvement. KPI expectations. standards required. KPI targets.
Performance does targets are Targets are often Regularly meets Outstanding
not meet regularly missed. met, but there is KPI targets.
requirements in Needs room for Exceeding Performance
several critical improvement improvement. expectations consistently
factors. Performance is Meeting Performance is exceeds standards
Performance is inconsistent. expectations often above the and KPI targets set
inconsistent and Behaviour Performance is standard required for the position.
unreliable and sometimes does consistent and and the employee
Job-related skills: The extent to which the team member is competent in the practical/technical
skills required to perform on the job.
12345
Below Needs Meeting Exceeding s
expectations improvement expectations expectation Outstanding
Interpersonal skills: The extent to which the team member willingly cooperates and demonstrates
effective communication skills when interacting with internal and external customers. 1 2 3 4 5
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Organisational skills: The extent to which the team member organises and produces work within
a timely manner.
12345
Problem-solving and continuous improvement skills: The extent to which the team member
proposes new ideas, finds new and better ways of doing things and uses appropriate problem
solving skills.
12345
Below Needs Meeting Exceeding Outstanding
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expectations improvement expectations expectations
Personal presentation: The extent to which the team member meets organisational standards
related to grooming and hygiene.
12345
Behaviourally anchored rating scales (BARS)

This method is a combination of critical incident and rating scales. Employee performance
is rated on a scale, but the scale points are anchored with critical incidents. These are
areas of behaviour that have critical significance to the performance of the job role, either
positively or negatively. Rating scales are often 1 to 7, or 1 to 9, allowing for a greater
degree of evaluation.
BARS is said to be the fairest method of appraisal. However, it is time-consuming to

create, as a separate appraisal tool needs to be generated for each job. This is usually
done in cooperation with HR, managers, supervisors and employees, to ensure the job is
fairly represented.
Click on the icon for an example of a BARS rating scale for a performance area.
Confidentiality: Can be trusted to use discretion in dealing with customers and co

workers. Maintains confidentiality of information or materials appropriate to the position.
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7
Performance Points Possible behaviours Extremely good ❑ Actively promotes an
atmosphere of confidentiality through continuous monitoring and communication of confidentiality
standards.
❑ Has a comprehensive knowledge of the company’s privacy
and confidentiality policy and can guide others in these
matters.
❑ Displays a high level of professional integrity and discretion
when dealing with colleagues and customers and potentially
sensitive information.
6
Good ❑ Uses discretion when dealing with sensitive information. ❑ Has a good
knowledge of the company’s privacy and
confidentiality policy and demonstrates support for it in own
work area.
❑ Discourages gossip about customers and colleagues.
5
Above average ❑ Does not participate in office gossip concerning clients and customers.
❑ Can generally discern when it is appropriate to disclose
Jacqueline Bes information based on relevant company policy, however

may need to seek assistance from their supervisor at times.
❑ Complies with confidentiality standards and policies.
4
Average ❑ Complies with confidentiality standards and policies. ❑ Seeks supervisory
support on areas of the policy they are
unsure about.
❑ Maintains confidentiality of appropriate records or materials.
3
Below average ❑ Demonstrates some lack of concern for confidentiality through
behaviour or conversation.
❑ Has some gaps in knowledge on how to apply the
confidentiality and privacy policy to own work area, but is
aware of these and is working towards correcting them.
2
Poor ❑ Demonstrates insufficient knowledge of policies and procedures related to privacy
and confidentiality policies.
❑ Has been known to participate in office gossip regarding
colleagues and customers that can impact on confidentiality.
1
Extremely poor ❑ Has a poor grasp of privacy and confidentiality policies. Demonstrates
little regard for these policies.
❑ Participates in office gossip with little regard to potential
negative consequences.
Note
It takes specialised knowledge and skill to create a BARS appraisal tool for each position
within an organisation. The process is usually managed by an HR specialist, or even an
external HR consultancy firm.
57 2016 Edition
Management by objectives (MBO)

This method involves evaluating employee performance according to the results they
achieve. Areas of responsibilities are identified, for example, sales, WHS and employee
engagement. Areas included should be key areas the employee’s performance has an
impact on. Performance activities and targets are then set for these areas. Targets or goals
are aligned with department and organisational goals. For MBO to work effectively, the
employee should have input into setting their targets, rather than having management
dictate them.
Click on the icon to learn more about MBO.
MBO is popular in some industries and is used commonly to assess management

performance. This type of appraisal allows the employee to play an active part in the
monitoring and review of their progress in between the formal appraisal meeting. However,
MBO appraisals can make it difficult to compare performance, measure improvement and
can lead to the setting of ‘easy to achieve’ or short-term goals.
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The MBO method is often used in conjunction with other performance appraisal methods.
Performance and development plans are individualised.
Click on the icon for an example of an MBO performance and development plan template.
Performance & development plan

Employee name __________________________ Employee ID ________________________
Position _________________________________ Department ________________________
Appraised by ____________________________ Appraisal date _______________________
Reason for appraisal __________________________ (annual, promotion, end of probationary period)
Performance period from: _________________to________________
Performance plan
Major responsibilities Goals Evaluation of goal achievement
Development plan
Development goals Development activities Due date Comments
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58
Hot tip
Goals and targets set must be SMART (specific, measurable, attainable, relevant and
time-based).
Forced distribution
A forced distribution or ranking system is a variation of grading whereby a set proportion
of employees must fall within set categories, similar to that of a normal bell-shaped curve.
It is a form of comparative evaluation in which the manager rates subordinates according
to a specified distribution, for example 5% must be ranked unsatisfactory and 5%
exceptional. Unlike ranking methods, forced distribution is frequently applied to several,
rather than only one component of job performance.
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Click on the icon to learn more about forced distribution.
Companies may use it to force managers to confront underperformers, particularly in past

situations where rating bias has resulted in underperformers being given satisfactory
ratings. Forced distribution is commonly tied to a reward and incentive scheme whereby
only the top performers receive bonuses.
50%
15% 15%
5% 5%
Unsatisfactory Borderline Satisfactory Good Exceptional
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Click on the icon for an example of forced distribution results.
Forced distribution example

A manager was told to rate his subordinates according to the following distribution:
• 10% low; 20% below average; 40% average; 20% above average; and 10% high.
• Therefore in his department of 20 staff, it meant that:
▪2 were placed in the unsatisfactory category
▪4 in the borderline category
▪8 in the satisfactory category
▪2 in the good category
▪2 in the exceptional category.
However, it is not free of rating errors itself because it forces discriminations to be made
between employees, even where job performance is quite similar. Employees can feel this
method is harsh, may damage trust and potentially create harmful rivalry between staff.
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How should you conduct the appraisal meeting?
You have completed the appraisal forms, given your employees plenty of notice and set
up a comfortable, private meeting space. You are now ready to conduct the appraisal
meeting.
A modern professional should be prepared for this appraisal, but if you are locked in the
past a lot can go wrong at this point!
Click on the radio and listen to an old style ‘talky’.
Welcome back to DDC Radio. This week on ‘The Other Office’ John has been asked to
see Imogen about his appraisal.
Once again we see Imogen on the phone in her messy office. Papers are strewn. Files
appear mixed up as she is talking about her proper crazy weekend with the girls. Know
what I mean girlfriend!
There’s a knock at the door.
Imogen waves John in to sit down. She hangs up the phone and rifles through her
paper. ‘Hi Greg. Thanks for coming in. Have you got your forms filled out?’
'What forms are you talking about?’
'Your appraisal forms. That’s why we are having this meeting. It’s your annual
performance review. HR distributed all the forms last month. You should have brought
them with you, already filled out.'
‘I didn’t get any forms. I didn’t realise I had to fill out anything. Sorry.’
‘Well that’s a nuisance. Look, don’t worry about it, I’ll just use mine and you can tell me
how you’d rate yourself as we go along.’
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'OK. This won’t affect my review will it?’
'Well no …’
(Phone rings)
‘I can’t talk right now, I’ll call you back, OK?
OK … OK … (laughs again). Bye … bye.’
‘OK where were we? … Right, let’s just get started. It’s crazy here today and I really need
to get through your appraisal as soon as possible. So Greg, I’ve rated you as satisfactory
in all job areas (looks through form), teamwork, productivity, punctuality, customer service
… yes, all satisfactory. However, I think you need improvement in some areas. What do
you think?’
'I don’t know what you’re referring to. I think I’ve done an excellent job in all areas. I
received employee of the month in May …’
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'That was ages ago now.’
'Does that matter? I still got employee of the month and I’ve received some outstanding
mentions on customer feedback surveys. I’ve never missed a deadline, well not that I can
recall and I get along really well with everyone. I think I deserve a higher rating than
“satisfactory”.’
And that was this week’s episode of the ‘The other office’.
What do you think went wrong with Imogen in The Other Office? Click to the next screen
to find out.
What went wrong?

Imogen was disorganised, didn’t make the purpose of the appraisal clear and couldn’t
support her ratings with evidence.
Click on the icon and learn what key points should be considered during an
appraisal meeting.
Key points to consider during an appraisal meeting
• Ensure your meeting location is comfortable and free from distractions. • Welcome the
employee and clearly define the purpose of the meeting. • Discuss each item one at a
time. The meeting should be a two-way conversation, not a one-way lecture.
• Listen more than you talk.
• Ask open questions.
• Look interested. Maintain good eye contact and attentive posture.
• Positives should be emphasised before negatives are discussed.
• Be specific and descriptive, not general or judgemental. Be able to give examples to
support ratings.
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• Discern the difference between effort (how hard someone is working) and quality results
(whether those efforts contribute to the achievement of business goals). Be able to
explain this to employees and clarify requirements.
• Discuss your differences and resolve them.
• Avoid suggestions about personal traits to change. Instead, focus on more acceptable
ways of performing.
• Be professional and supportive.
• Allow time towards the end of the meeting to discuss any further queries or concerns
the employee has, as well as suggestions for improvement and career objectives.
Jointly discuss and agree upon action plans for growth and development.
Click to the next screen to learn more about action plans for growth and professional
development.
What does a follow-up action plan look like?
Jacqueline Bes
The appraisal tool itself often has a section at the end for making an action plan for
professional development. This will include goals, actions to be taken to achieve goals
and completion dates.
Managers need to ensure that employees receive the appropriate support to achieve their
goals. Any actions and completion dates need to be followed up, to ensure achievement.
Click on the icon for an example of an action plan.

Goal Action Completion date
Comments
taken to achieve goal] [insert supporting comments]
[date action to be completed]
[insert goal] [insert action to be
Complete relevant first development approval
Example aid courses form. Once course completed,
Example Dec XX show original certificate
Obtain
Enrol in course and give to HR department,
occupational level first Example
invoice to department where a copy will be
aid qualification Complete professional manager for approval. taken for file.
Example
How should you deal with difficult situations in the appraisal

meeting?
Inevitably, you will come across difficult and uncomfortable situations when conducting
performance appraisals. These issues can’t be ignored. They must be assertively dealt
with, using effective communication and enterprise skills.
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62
Click on the dot points to learn how to handle underperformance.

⦿ Tell the employee exactly how you see the performance situation. Focus on the facts.
Have examples to support your facts.
⦿ Identify why the underperformance is a problem for the organisation.
⦿ Ask for their feedback about what you’ve said and listen to their response. Allow
them to vent, if they need to. Don’t argue. Focus on the performance.
⦿ Focus on how improving performance will benefit the employee.
⦿ Partner with the employee to find the solution.
⦿ Don’t get side-tracked or drawn into discussing the performance of other staff.
Hot tip
Role-playing different scenarios with someone skilled in conducting appraisals, such as
Jacqueline Bes
HR or senior management will help give you the confidence to manage difficult situations.
Refer back to notes in Section 2 regarding managing underperformance for more tips on
managing difficult situations.
Why performance appraisal programs may fail

A performance appraisal process has potential drawbacks for the manager, employee and
the organisation as a whole. Despite having a sophisticated performance management
system in place, the success or failure of the performance appraisal largely hinges upon
the validity and reliability of the judgements made by the manager. This can be influenced
by their personal bias and attitude towards the employee and their attitude towards the
value of the appraisal process itself.
Click on the unhappy eggs to learn about common reasons for the appraisal
process to fail.
⦿ Lack of top management support for the process

⦿ Lack of job-related standards in place
⦿ Rater bias
⦿ Too much paperwork to complete
⦿ Benefits of appraisals not made clear
⦿ Manager’s inability to deal with face-to-face confrontation
⦿ Lack of training given to managers on how to manage the appraisal process
⦿ Judgemental role of appraisals conflicts with the helping role of developing
employees
⦿ Process takes too much time for the value it provides
⦿ Professional development action plans and goals not followed up
⦿ Lack of informal feedback given in between appraisal process
⦿ The appraisal becomes a ritual which neither party takes seriously
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Click to the next section to learn about rater bias.
Are you being fair?

As humans, we are affected by emotions, values and beliefs. A degree of self-awareness
and an understanding of perceptual errors that can lead to rating bias is essential to a fair
appraisal process.
An appraisal by nature is somewhat subjective. It is influenced by personal opinion.

Objectivity can be enhanced by: collecting data and examples of performance to support
ratings, using 360 degree feedback and measuring against KPIs and goals.
Click on the tabs to learn about common perceptual errors that can lead to rating
bias.
Recency effects
Jacqueline Bes
This refers to the tendency for people to be influenced by recent performance, instead of
reflecting on performance for the whole appraisal period.
Leniency/strictness errors
This is where the rater uses extremes of the rating scale. For example, being lenient
because you are reluctant to confront an aggressive employee, or being strict because
you think it motivates people to strive for better performance.
Confirmation bias
The rater looks for information that confirms a belief already held about a person. For
example, a manager thinks an employee is an efficient worker and therefore only sees
information that supports this belief.
Central tendency errors

The rater avoids extremes on the rating scale and therefore all employees come out as
average. This can happen out of fear of rating too high or too low, as it seems safer to
cluster all scores to the middle.
Halo/horns effect
This refers to being influenced by favourable (halo) or unfavourable (horns) impressions,
particularly physical characteristics of a person. For example, if an employee is attractive
and immaculately groomed, they are more likely to be rated higher on all areas of job
performance. Once formed, a positive or negative view of a person is difficult to change.
Stereotyping
To stereotype means to place people in categories and assume that all people in these
categories are the same. Stereotypes can be favourable, but usually result in unfair
treatment, as people are not assessed as individuals. Common stereotypes include: Asian
people are good at maths, beautiful people are not that intelligent, men are better
managers, older people can’t learn new things and women are too emotional.
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64
Attributions
Attribution errors result when the rater makes an assumption about the cause of the
employee’s behaviour, which then influences how they rate them. For example, you think
an underperforming employee has personal problems and so you rate them easier. This
results in the underperformance not being dealt with.
Relationship effect
This is where the rater’s ability to accurately appraise an employee’s performance is
affected by the nature of the relationship they share and the length of time they have
worked together. A close relationship makes it difficult to objectively appraise
performance. For example, you have worked with an employee for five years and see
each other outside of work. This relationship would make it difficult to objectively appraise
the employee’s performance.
Complete and file records
Jacqueline Bes
Appraisal forms can be paper-based or electronic. Organisations may create their own
appraisal tools or use specialist HR software programs. Either way, a record of the
appraisal tool/form is given to the employee, the manager and the HR department.
Appraisal documents are kept on the employee’s file and may be referred back to for
future decisions such as promotion and remuneration and to support legal compliance.
Click on the checkboxes for some tips for completing paperwork.
⦿ Complete the forms only after gathering and reflecting on the evidence.
⦿ Regularly assess for rating bias.
⦿ If completing paper-based forms, use a pen and write clearly.
⦿ Ensure the administration section of the form is completed. This includes the
employee name, position, employee number, etc.
⦿ Review the form after completion to ensure it is free of spelling errors, all sections
have been completed and you have signed and dated the forms.
⦿ Ensure the employee has completed their copy of the forms in full and they have
been signed and dated.
⦿ Any actions noted during the appraisal such as follow-up training and other
professional development must be noted on both the manager and employee’s copy
of the form.

Conduct an online search of companies that offer performance appraisal tools and see if
you are able to look at samples. Also search for sample performance appraisal tools and
view the different forms and templates available.
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End of section
Click to the next screen to read the unit summary.
Summary
Effective monitoring and performance management depends upon having clear policies,
performance standards and expectations in place.
Everyone needs regular, constructive feedback to improve. Most employees want to do a

good job and just need the structures, support and systems in place to help them get
there.
Jacqueline Bes
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66
GLOSSARY
Glossary
Word Meaning
Acronym Word formed from the initials or components of a phrase or word.]
Benchmarking A process of comparing your business practices to others to create
standards of best practice.
Job description Outline of the duties and responsibilities relating to a particular job or
position.
Kaizen The Japanese term for ‘good change’, but commonly used now to mean ‘continuous
improvement’. Kaizen was first introduced to Western
business practices in the 1950s as part of the Total Quality
Management (TQM) system or philosophy of management.
Jacqueline Bes
KPI Key performance indicators. KPIs are performance metrics critical to the success of the
business.
skills and knowledge needed to perform a job
Person (job) specification or fulfil a position.
Outline of the personal or human qualities,
Remuneration Pay and other benefits of monetary value such as company car, mobile
phone, additional leave and incentives.
Stereotype To place people into categories and assume everyone in this category is the
same.
WHS Workplace Health and Safety.
didasko.com 2016 Edition 67
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Section 1: Monitor staff performance and provide feedback ..........................

3 Section 2: Recognise and resolve performance problems...........................

27 Section 3: Implement performance management systems

© 2016 Didasko Digital. All Rights Reserved.

Jacqueline Bes This

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with clear performance expectations and regular, constructive feedback.

Let’s look at what you will learn on completion of this unit.

Section 1: Monitor staff performance and provide feedback

Section 2: Recognise and resolve performance problems

Section 3: Implement performance management systems

In this section you will learn the following.

• How to consult and inform colleagues about expected standards of performance.

Where does monitoring staff performance fit within the role of

Click on each of the functions that managers perform to learn more.

Jacqueline BesControlling Organising

Thinking about how and what is involved in achieving goals.

• Recruitment and selection.

Leading Motivating employees to achieve organisational goals.

Networking, developing relationships.

Controlling This is often referred to as monitoring.

Continuous improvement (Kaizen) (glossary).

Why do you need to monitor staff performance?

An effective monitoring system works as a feedback mechanism for future planning,

You have 30 seconds to describe them.

Click start to begin.

How did you go? Compare your answ ers to these.

Systems to manage staff performance

Click on each of the headings to learn more about performance

Performance standards and objectives

Communicate expectations to employees

Regular informal feedback

Training and development

Rew ard and remuneration

What does monitoring on a day-to-day basis involve?

Click on the pictures to learn more.

What does monitoring involve?

What are service standards?

What are service levels or service rates?

What are productivity rates?

How do you monitor employee performance?

Standard operating procedures (SOPs)

Procedure: the step-by-step process in which something is done.

Click on the icon to learn about the benefits of having SOPs.

Benefits of having SOPs

• SOPs detail specifications for quality control.

Typical standards and procedures

Click on the pictures to learn more about the different types.

• Recruiting and selecting staff

• Manual handling procedures

• Use of social media at work

What are policies?

• Give staff protection in case of legal action.

Click on the icon to find out more.

• Use of alcohol and other drugs

What are common characteristics of policies, standards and