Why performance management is ‘back in fashion’

The commencement of the Fair Work Act (FWA) in 2009 brought with it the expansion of unfair dismissal rights to all employees, regardless of the size of the employer’s workforce. As a result, employers have to ensure that if they are considering dismissing an employee for non-performance, that they have appropriate performance management systems in place. This is just one of the reasons why performance management is back in fashion.

Employers need to constantly audit the performance of their employees to ensure the business is running as effectively as possible. Such performance management will also assist employers who have to counsel or dismiss an employee for non-performance.

Feedback should be an ongoing task. Ben Thompson, CEO, The EI Group said, “When employees hear it is time for appraisal or feedback, they often get defensive. The stigma is that generally appraisals only occur once a year and are used to measure an employee’s performance over the previous year – which has probably already been forgotten. This is an ineffective technique. Once a year reviews don’t provide enough opportunities or challenges for either party.”

“Performance appraisals are traditionally used as a process of judging past performance. Managers should measure performance against clear objectives and goals set out to the employee on an ongoing basis,” Thompson said.

“An effective manager needs to be conscious of addressing the developmental needs of employees. Ongoing performance management is also about motivating, rewarding and recognising employees. Performance management is now ‘back in fashion’ and I encourage business managers to ditch the traditional annual appraisal system, and adopt performance management techniques that are implemented on an ongoing basis providing feedback and developmental opportunities closely linked to the employees and employers goals – not just once a year. This provides real growth platforms for both the employees and the business, and opens up a lot of opportunities,” Thompson said.

One of the biggest issues facing managers moving forward is managing ‘Gen Y’ employees, who represent the up-and-coming pool of talent. They have a different set of values and attitudes towards life and working habits. They have never known a world without instant communication due to technology, mobiles, and of course social media. Ben Thompson believes this is one of the reasons managers need to shift to an updated approach to performance management.

“One effective way companies are now catering to Gen Y is adopting a rewards and recognition strategy. Putting effort into rewarding and recognising your staff on an ongoing basis will boost company morale and profits,” Thompson said.

Ben Thompson highlights the three key benefits of adapting updated techniques for performance management:

1. Financial gain. Employees will be more motivated and enthusiastic. Recognising employees will decrease the amount of time spent on operational changes, which in turn, will help the execution of business strategies.

2. Improved managementcontrol. People feel empowered, loyal and interested when they know their leadership team is making an effort to keep them up-to-date. It reduces gossip, increases morale and improves productivity. Managers are better placed to manage issues immediately and effectively.

3. Motivated and fresh employees. Ongoing performance management improves employee engagement because everyone understands their mulberry sale contribution to the company. Employees will actively work towards company goals and objectives. It will set a better tone other than ‘business as usual’ – it will be more of a ‘let’s get pumped team’ tone.

“Ongoing performance management is a win-win opportunity for managers as it reinforces the goals of the business while motivating and invigorating employees as well as ensuring the employer’s processes will assist them if action is taken by an employee after dismissal,” Ben Thompson, CEO, The EI Group.

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It is important for employers to develop effective performance management systems and policies. And if in doubt, obtain legal and HR advice.

About Ben Thompson
Ben Thompson is CEO of The EI Group – Australia's leading provider of workplace relations, HR and performance improvement services. Ben is known throughout the industry as ‘the ideas man’. Ben’s ability to think outside the square, combining incentive/reward structures, employment law and IT solutions, allows mulberry handbag clients to be far more competitive and prevail over the challenges faced by modern employment every day.

About The EI Group
The EI Group are leaders in integrated and innovative human resource management solutions, The EI Group creates peace of mind by giving clients the HR consulting expertise they need. From human resources systems to workplace law and even reward and recognition solutions, it brings human resources solutions together Mulberry Bag so you can bring the best out in your business.

The EI Group comprises of EI Legal, Power2Motivate and OneStopHR.