Project Description

Performance Management – with Gabrielle Sullivan and Allan McLean

This time on the HR Breakfast Club podcast we’re discussing performance management; an absolutely necessary tool in the well-managed workplace but sometimes vexed in reality. How do you manage the process fairly for everyone and arrive at a workable outcome? 

Our host, Genevieve Jacobs discusses the intricacies of performance management with our guests, Gabrielle Sullivan from Bradey Allen Love, and Allan McLean who is secretary of ALERA – the Australian Labor and Employment Relations Association.

For more resources, see our HR Breakfast Club resources below. If you have a topic that you would like us to discuss, we would be happy to hear from you, please contact us!

Some topics we cover:

  • What is Performance Management and how has it evolved
  • How best to address performance issues in the workplace
  • Putting yourself in the position of the employee, and being understanding of reasons for poor performance in certain situations
  • Coming to the table with a positive view and a mindset to achieve a peaceful resolution

Genevieve Jacobs: This is the HR Breakfast Club Podcast. My name’s Genevieve Jacobs. Our focus in this series is on the world of work in Australia with a legal spin. We work our way through a variety of HR issues you might be dealing with within the workplace and we give you some important information about how to manage them, perhaps some new perspectives on where to go from here. The website is hrbreakfastclub.com.au. If you’d like to make contact with some questions, we can respond to those too.

This time we’re talking about performance management, an absolutely necessary tool in the well-managed workplace but sometimes vexed in reality. How do you manage the process fairly for everyone and arrive at a workable outcome? With me are Gabrielle Sullivan from BAL and Allan McLean who’s secretary of ALERA. That’s the Australian Labor and Employment Relations Association. Hello to you both. Allan, let’s start with the whole concept of performance management. What is it? Explain how it evolved and what the idea behind it is?

Allan McLean: Firstly, I’d just like to say that performance management is something that you do to somebody, so I don’t even like the term. When you’re looking at performance management, it’s actually two different areas. One is, how do we build somebody’s capability so they can improve and meet the needs that we have for them and the role they have? The other is when you’ve gone through that process extensively and found that they don’t meet the role, then how do you manage that under-performance part of the relationship?

Genevieve: Talk to me about the evolution of this within a workplace because 40 years ago the conversation would have been you’re in you’re out. These are grounds for dismissal that’s all there is to it. How do we get to this point in the employee-employer management relations?

Allan: You’ve got probably two areas, you’ve got the private sector and you’ve got the public sector. They deal with things fairly differently. Going back many many years, it’s often been even the cut of your jib, if you like I don’t like and so we’ll terminate. Things have moved on throughout the years where the Fair Work Act, for instance, has provided different conditions that must be met to manage someone’s performance as it’s called.

Generally speaking, certainly in the workplaces where we see best practice performance management, it’s much more about identifying well the role that you have, identifying the skills and hiring to that very well so that you can actually get the right fit the right person the right fit for the right role and then build the capability as you need. In the past, it’s been very much expected to come to the role with those skills. With today’s all the roles developing like they are, they’re iterating constantly and you’re constantly needed to change and update how that role is. That’s why I think we need to work more with our employees to improve that.

Genevieve: I think we’ve touched on this a little later on in the podcast, but it is about a process and working towards the best outcomes for everybody involved. Gabrielle, legally speaking, where does performance management fit within an employer’s responsibilities towards staff? We heard just a moment ago from Allan about the Fair Work Act, for example. What are the legal parameters for this?

Gabrielle Sullivan: I suppose the probably most important legal parameters, as Allan mentioned, come out of the Fair Work Act. It’s the unfair dismissal laws, because ultimately if a performance management process doesn’t lead to improved performance to a satisfactory level, then termination is a likely consequence. The Fair Work Act prescribes that that dismissal process has to be fair and has to meet certain criteria. That’s the sort of main legal constraint or domain background against which the performance management process has to be undertaken. That’s the endpoint as it were. It’s a top of mind criteria is with for HR managers.

There are these other things though. I mean, ultimately if we were just to put this in a little bit more perspective or to put the framework more fully around employment law, of course, an employee has a contract with their employer essentially to perform the contract. We will pay you wages. If you don’t perform that contract, then the parties are free to go their separate ways. That’s how a contract would say it, but unfair dismissal laws in the Fair Work Act to come over the top of that and regulate that process.

You do start with the contract. It’s very important, I think, for HR managers to understand not at the end of the process but at the start you pull out that contract and you have a look at what exactly is it that we’re paying you to do because that will form the basis for a decision as to whether is it fair bearing in mind what you’re paid to do, how much you’re paid, what your duties are, what we’re told you your duties were, that detail which may or may not be in the contract will be germane to the fairness of dismissal at the end of the process.

Starting with the contract is a really good idea for HR managers. Don’t overlook it. I do say in my practice that nobody bothered to check what the contract said about performance management. There are times when a contract will delve into what’s supposed to happen in that practice. That’s not a good idea to have any new contract, but I do find it in there. To the extent it’s part of your contract, how are you going to manage that under-performance process. You must comply with it.

Tend to the framework you need to look at the contract of employment, you need to look at any HR policies your organisation might have adopted to prescribe the performance management process and you need to keep your eye on a weather eye to the unfair dismissal provisions of the Fair Work Act. Occasionally, some enterprise agreements may also tackle the process for performance management tends to happen in the public sector and most are in the private sector but to the extent your organisation is bound by an enterprise agreement, it does talk about performance management, well, you better make sure you comply with it.

It’s against your question, I think it’s rather complicated. There is quite a background there, but it behooves HR managers or any manager who’s faced with a performance management decision or process to make sure you’ve got out those documents, that you’re aware of that framework and you’re complying with it.

Genevieve: We’ve got the legal framework, the background and the important note about going back to the contract because that’s what everybody has agreed to do for one another. What kind of venues will have gone into formulating these policies? What are the foundational principles for how you carry out performance management?

Allan: What I would say is, you first got to look at job design. I mean, really when we’re talking performance management here we’re probably talking about the sharp end of it when things are going badly. What I would say is shift back and say what is the job design, what are the skills knowledge and behaviors I’m looking for correctly and then use an evidence-based recruitment process when you’re hiring, because prevention in this space is always going to be best and really that’s going to underpin your relationship with your employee that is. 

Often, I also see people hiring people who are the best employee that applied rather than picking the right person. If you can’t get the right person, don’t hire the best person because you might have a fractured relationship ending. The other thing is being honest and constructive. What I recommend to managers is have regular conversations, have regular meetings with your staff, establish what it is you’re expecting of them and give them good honest constructive feedback about how they’re meeting those expectations.

Then you’re setting yourself up very well for the future whether it goes well because you’ve established a really good relationship with your employee and categorically identified what you need them to do and they understand that or if you have to go down the under-performance path you’ve set yourself up very well for managing that process because you’ve been very clear about what your expectations are and you’ve provided them with advice support and information about that. You can actually manage that process to its final resolution if that ultimately means termination.

Genevieve: Starting well, that’s a great beginning, but from an HR perspective in dealing with staff, talk to me about fair process but also that people feel fairly traded and those are not always the same things in the workplace.

Allan: No. Quite right. How you approach this is often the most difficult element. We often find that people leave it, managers leave the process to the point where they feel frustrated and now they come in with a tone, body language, and appearance of, “I just needed to get the job done.” This is why you’ve got to get in early and get in quick about anything that is a concern. The concerns can be anything from the actual technical ability to do the job, but it might also involve your behavioral abilities and how you interact with others and also your attendance, when you show up.

As HR managers, we’re looking at all of those things to inform the manager to say when you’re dealing with your people come to it with a more positive view and the first step saying “I’m here. I’ve hired you,” and said “I want you to work for me. Now let’s make that work in the best way we can.” That means again being very clear and honest and open about what your expectations are. Often, we find people don’t like confronting that, people don’t like having hard conversations. I don’t, none of us do, so you shy away from it. What happens is then you’re digging that proverbial hole and then when you try to dig your way out, you’re not getting very far.

Genevieve: Gabrielle let me turn this in another direction. It’s important to have a defensible process. What does that mean?

Gabrielle: I think you’ve hit on it with fairness. Of course, fairness is really difficult to define. The legislation and, I guess, the law if it were to summarize it, frankly is that flexible. We’ll look at all the circumstances. The law is not terribly helpful in answering what is fair, but that’s probably a good thing because I think actually people probably know what fairness is in a particular situation. The law will look at it objectively though, I should say. There’s an objective test as it were there looking at fairness all round. Nobody wants to be told they’re not good at their job. That’s always bad news to deliver and it’s often met with claims of unfairness.

Of course, if you’re a manager then there’s a lot bigger perspective to look at. Your job is to make decisions for the whole of your organisation, not just looking at it from the individual’s point of view. What we want is an objectively fair process regardless of the subjective feelings of unfairness by the particular employee in question, because there’s a fair chance they’re going to feel like it’s unfair. If only you understood me more, you would understand that, this, that and the other.

Obviously, the law requires a bit of effort to be taken on behalf of management to get some of those things, but there have to be limits because, let’s face it, jobs have to get done and there is such a thing as under-performance. If it’s bona fide, then it really needs to be dealt with for the benefit of that employee. Frankly, because they’re probably not having a good time either and definitely for the benefit of their colleagues because we all know that under-performance by one person affects everybody. It needs to be tackled.

How can you do it fairly? Sorry to answer your question Genevieve, but what does the law actually require? As I said, it’s an objective test. Use common sense. My advice to our clients is, put yourself in the position of the employee. Look at it from their point of view. If you can see some unfairness there, fix it. They’ll say, “It’s unfair because I didn’t know that that’s exactly what the problem was.” Tell them clearly and in writing. The other concern we’ll often get is, “I didn’t know. Nobody’s told me this has been a problem for years and now you Mrs New Manager come and tell me that what I’ve been doing for years has been told has been fine is not fine.” I didn’t know.

When you told me you were upset about it I didn’t know that you were taking it seriously. I certainly didn’t know that my job was on the line. Now it’s unfair for me to find out late in the day that it is. Yes, that is unfair. Don’t do it. Tell them when you’re the new manager coming in saying, “The past is the past. I’m the new manager. These are the expectations that I have. Here’s how you are falling short and here’s the potential consequences.” It’s tough and it’s really hard work for a manager to actually get this right, requires time and effort.

It’s really about doing the hard work and identifying with precision what the problem is and having the courage to sit down with that employee and have that conversation and then follow it up. In one week I expect X, so let’s be around in a week and say, “Well, why didn’t X happen?” They might have a legitimate reason for it, listen to it, they may not. Honestly, it’s about hard work and diligence and following it through. My last piece of advice. If you really want to be fair and you’re a manager, you’ve got some uncertainties about it, get a second opinion.

Go and ask a colleague at a level whose judgment you trust, “What do you think of this? Am I being too tough? Is it just my personal little peccadillo that I like semicolons on page four? Is that just me? We do have our little foibles, don’t we? If you’re a little concerned that perhaps it’s just your subjective concern, get a second opinion. That’ll help you meet that objective taste of fairness and reasonableness that I’ll talk about later. That’ll help fend off any of those claims should they arise in the future.

Genevieve: Just on that, should the point of performance management be that it really is a process? It doesn’t necessarily need to be a means to an end to get rid of someone, does it?

Allan: Absolutely not. In totality, really what you’re doing is you’re trying to set the person up to succeed as opposed to fail. Often, what we find is when people aren’t performing as well, there’s something else going on in their own life, whether it be in the workplace or somewhere else on their personal life. I often ask managers to consider why. Get to the root cause of what’s going on. They might have performed well before or their attendants might have been falling off and things might be coming crashing down around them in their personal lives.

We need to think about all of those things because it takes so much more energy to hire somebody. Definitely, it is a process, but it’s a process that starts when they first start. You don’t have to give it a label. You just have to say, “Let’s be clear about what we’re doing, what we’re expecting,” and then work with them on that. I would add to what Gabrielle said, which was, let’s look at what we can do to help them succeed.

Again, if there’s any training or any support. For small business, it’s much harder quite understand. Sometimes it’s just I just need to get this delivered. Again, it is hard to get the right people. If you’ve hired this person with the idea that they can do the job in the first place, it might be just about giving them bit of form to get them to fit into your organisation well.

Genevieve: Nevertheless, this is a process that can sometimes generate very strong emotions. People can feel threatened, distressed. You might also get into bullying allegations which can really derail things, people take leave of absence and the like. How do you manage that?

[laughter]

Allan: I think I’d be very wealthy if I had the cornerstone on that one. I know I’m sounding like I’m probably harping on the same thing, but how do we manage something that’s going to come to a nasty end? It’s about having that process at the very beginning. If you’re honest with people, most of the time they understand. I know in our own experiences in our workplaces I’ve worked at, we introduced a performance series and trained managers up. Over that time we found that many people left the organisation because it wasn’t the right fit.

We actually had the manager who helped them, the HR manager that helped them. They came back to that person and said, “Thank you because I now realize that wasn’t the right thing for me.” At the time, you need to be understanding that this is seriously traumatic. They need to have time to have somebody come with them. Somebody who can generally provide support, generally not a relative that doesn’t work, but we’re looking at somebody who they can trust to be on their side to have their back in that meeting. If it gets to that more pointy end.

Initially though, we’re really only talking about you and you’re talking to your colleague at the workplace to say, “Hey, this is what we need to do. How can I support you to do your job better?” It’s really about attacking it in a different way so that they feel supported in the workplace. Really the times we’ve seen it work best is when as much as possible maintain a positive working relationship with the person and make sure that it doesn’t become personal and just focus on some of the activities that they’re doing.

Genevieve: Gabrielle, the process comes to an end. What responsibilities does the employer have and what are the likely outcomes? What happens when you’re at the final point of that performance management process?

Gabriel: Well, ideally performance is improved to a point where everybody’s happy and we can all just get back to work. Obviously, in a legal practice I tend not to say those. I say the ones where performance hasn’t improved to the requisite standard and so a decision has got to be made. What are we going to do? We’ve gone through this process and we’re not where we need to be. What’s going to happen? In a private sector context, separation is the obvious solution. A transfer is something that may be available to bigger organisations or the public sector, depending on the nature of the problem. So it might be that they don’t have skills for the particular role, but there are other roles that they would be well suited to.

A transfer is another more benign option than termination. Some organisations will say, “Well, we’ll just have to live with it.” The separation is the obvious resolution of the dilemma where we’ve identified that you can’t perform your contract as agreed. We’re frankly paying good money for you to do that. That’s the obvious sort of resolve.

Genevieve: Are there alternatives to performance management?

Allan: In terms of somebody’s capability in what they’re doing and their behaviors, there is no alternative but to address those issues when they happen. Really, whether you give it that performance management label, which I don’t really like because performance management is something you do to somebody, you’re actually trying to help somebody really find their place. We definitely like to have the conversation and an honest conversation about, “Well, look, if this role isn’t the perfect role for you, what might look like that?” Certainly, like Gabrielle said, in big organisations, you can do that.

You can say, “Where might they fit better?” It’s not about ignoring their issues and just putting them somewhere else and shifting them from position to position which has happened in the past. It is actually about working with them about where do they see themselves in five years, what kind of skills do they believe they have and actually building on those skills and finding somewhere else. It’s actually if you like an alternative to the pointy end, but ultimately you do have to address where somebody’s performance whether it be a skill-based, behavioural-based or attendance-based thing, you have to address those things.

Genevieve: Gabrielle, in summary, how does an employee know that they’ve carried through this process fairly well and in a defensible manner?

Gabrielle: I suppose in summary, Genevieve, I’d say the way to get it right is to follow your instruments and your policies to the letter, to be consistent in the way you manage the person. Use common sense and follow the golden rule. Be fair. Put yourself in their shoes, look at it from their point of view and make decisions that are proportionate, sensible, thereafter, and that will put you in the best position to defend any sort of claim of unfair dismissal, bullying, workers’ comp, what have you, that might arise in this space. I think then everybody can be comfortable that a fair process has been followed all around.

Genevieve: In summary, it’s about a fair process. It’s about giving people a chance to express their own concerns but moving towards the right outcome, whatever that might be as an outcome of the process. My guest today on the HR breakfast club had been Gabrielle Sullivan from BAL, and Allan McLean, who’s secretary of the Australian Labor and Employment Relations Association. You’ve been with me, Genevieve Jacobs on the HR Breakfast Club Podcast. If you’d like to get involved, we would love to hear from you. You might like to offer yourself up as a talent. Perhaps you’ve got some ideas about topics we need to address. Go to hrbreakfastclub.com.au and get in contact with us.

BAL Lawyers have put together a suite of HR policies and training bundles to support and enable best practice HR strategy. Click on a policy for more information or view all available policies here.

VIDEO