What Is Staff Performance Management?

Wednesday, 26 August 2026

What is performance management?

A manager notices in March that a team member is missing details in reports. It’s minor, the person is well liked and it can wait until the mid-year review. By June there are three more instances, the conversation is uncomfortable and it gets softened into a development goal. In November the person goes on a formal plan and is blindsided, because for eight months every signal they received said the work was acceptable.

Performance management is the set of practices meant to prevent that. It covers agreeing what good work looks like for a role, checking in on progress, giving feedback close to the event, dealing with problems while they’re still small and supporting people to develop. The formal review is the visible part and the part people complain about. Almost everything that determines whether performance improves happens outside it.

The term carries baggage. In many workplaces “being performance managed” is understood as a euphemism for being pushed out, which makes the phrase almost unusable in ordinary conversation. That association exists because the process is often only started once someone has already concluded the employment should end, at which point it’s documentation rather than management.

Does feedback actually improve performance?

Less reliably than most managers assume. Avraham Kluger and Angelo DeNisi analysed 607 effect sizes drawn from more than 23,000 observations and found that feedback interventions improved performance on average, but that over a third of them made performance worse. The average effect was moderate and positive, a d of .41, with a large minority of results sitting on the wrong side of zero. Sampling error didn’t explain the spread. Neither did whether the feedback was positive or negative.

Their explanation is about attention. Feedback that keeps the recipient focused on the task tends to help. Feedback that shifts attention to the self, meaning to what the recipient concludes about their own ability or standing, tends to hurt, because the person starts managing their self-image instead of the work. It’s why “this section needs the data source added” and “you’re not detail-oriented” can produce opposite results from the same underlying observation.

Keep feedback on the work: what specifically happened, what the effect was, what should be different next time. That’s an argument for more of it, not less. Ratings and rankings sit awkwardly here, since a number is an evaluation of the person and will be received as one whatever the framing says.

Why organisations keep redesigning the annual review

Dissatisfaction with the annual cycle is old and widespread. When Deloitte counted the hours its own system consumed, the total came to close to two million a year across the firm, spent on completing forms, holding the meetings and producing the ratings. Writing in Harvard Business Review, Marcus Buckingham and Ashley Goodall described replacing it with a lighter model built on frequent check-ins and a short set of forward-looking questions asked of each team leader, on the reasoning that ratings said more about the rater than the person being rated.

Plenty of large organisations followed, some abandoning ratings entirely and then quietly reinstating them when pay decisions became difficult to justify. Be sceptical of any redesign presented as the answer. What the research supports is frequency and specificity, which any system can deliver or fail to deliver. A weekly check-in that consists of “all good?” isn’t an improvement on an annual review. It’s the same absence of information at higher frequency.

The Australian legal layer

For anyone managing staff in Australia there’s a second reason to do this properly, which is that the record you create becomes evidence. Section 387 of the Fair Work Act 2009 sets out what the Fair Work Commission must consider when deciding whether a dismissal was harsh, unjust or unreasonable. The list includes whether there was a valid reason relating to capacity or conduct, whether the person was notified of it, whether they had an opportunity to respond, whether a request for a support person was unreasonably refused and, where the dismissal related to unsatisfactory performance, whether the person had been warned about it beforehand.

Two points from the Fair Work Ombudsman guidance cut against common belief. There is no general rule requiring three warnings, or even one, although an employer should usually give an employee a chance to fix the problem. And warnings should be in writing, stating the reason, the details and clearly what needs to be done differently. The guidance also separates underperformance, meaning work not done to the required standard, from serious misconduct, which follows a different process.

None of this makes performance management a legal exercise. It does mean the conversation you avoid in March is the gap in the evidence in November. The same records that protect an employer are the ones that show an employee was treated fairly, which is the more useful way to think about why they exist.

How do you manage performance well?

Set expectations in a form that can be checked. “Improve your stakeholder engagement” can’t be assessed, so it becomes a source of disagreement later. Something closer to “brief the regional managers before the paper goes to the committee, not after” can be observed by both of you.

Raise things early and small. The cost of the first conversation is low and it rises every month you leave it, partly because the person accumulates evidence that the work was fine and partly because your own frustration builds and leaks into the eventual discussion. Separate what you observed from what you concluded when you speak. Most defensive reactions are to the conclusion rather than the observation.

Find out what’s causing the problem before designing the response. Underperformance can come from unclear expectations, missing skills, a poor role fit, a personal situation or a workload nobody has looked at, and the treatments are entirely different. Ask rather than assume, and be prepared to discover the cause is something on your side.

Write things down as you go, not when you need them. A short note after each conversation covering what was discussed and what was agreed takes two minutes. It is worth considerably more than a reconstruction attempted six months later.

The framework is rarely what makes this hard, and most organisations already have one. The difficulty is having the conversation at all, with someone you like, whose work has slipped, who hasn’t been told. AcademyGlobal (AG) runs a one-day Managing Staff Performance workshop covering expectations, feedback and performance improvement plans, taught through presentations, group tasks and case studies.

If you’re managing someone whose performance has slipped and you haven’t yet raised it, the most useful thing you can do this week is the smallest version of that conversation.

Frequently asked questions

What is the difference between performance management and a performance review?

The review is a scheduled conversation, usually annual or six-monthly, that summarises how someone is going. Performance management is everything around it: expectations, feedback, coaching, development and dealing with problems as they arise. An organisation can run excellent reviews and manage performance badly.

How many warnings do you have to give before dismissal in Australia?

There is no general legal rule requiring three warnings, or even one. What matters is whether there was a valid reason, whether the person was notified and given a chance to respond, and, for performance-related dismissals, whether they were warned beforehand. Employers should usually give an employee a genuine opportunity to improve.

What is a performance improvement plan?

A structured plan setting out where performance falls short, what needs to change, what support will be provided and over what period. Used properly it gives someone a real chance to improve. Used as a formality after a decision has already been made, it tends to be recognised as such by the employee and, later, by the Commission.

How often should you give feedback?

Close to the event rather than on a schedule, which usually means more often than most managers manage. The research favours specific, task-focused comments delivered soon after the work. Saving observations for a quarterly conversation reduces both their accuracy and their usefulness.

Should performance management include ratings?

It’s contested. Ratings help with comparability for pay and promotion decisions, and several organisations that abandoned them later reinstated them for that reason. The evidence is less kind on their developmental value, since a number tends to be received as a judgement of the person and can pull attention away from the work itself.

References

Buckingham, M. and Goodall, A. (2015). Reinventing Performance Management. Harvard Business Review.

Commonwealth of Australia. Fair Work Act 2009, section 387. Federal Register of Legislation.

Fair Work Ombudsman. Managing Performance and Warnings.

Kluger, A. N. and DeNisi, A. (1996). The Effects of Feedback Interventions on Performance. Psychological Bulletin, 119(2), 254 to 284.