November 2010

Managing performance
A guide for ORIC corporations covered by the federal industrial relations system

This document has been prepared solely for the use of not-for-profit corporations registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act). Its application in any particular case will depend upon the facts of that case. In every case, due care will need to be taken by a corporation registered under the CATSI Act in assessing the suitability of its application. The Australian Government Solicitor and ORIC cannot take any responsibility for this assessment.
This document may only be reproduced or distributed for use in the drafting of a contract for a not-for-profit corporation registered under the CATSI Act. All other rights are reserved.

Hardworking and happy employees may become demoralised if they see other employees not bothering and getting away with it. This is the risk you take if you don’t take the trouble to manage performance and why it is so important. 
Recognise and motivate good employees and tackle poor performers before their habits become entrenched.
The key to performance management is that you must do it.  Don’t think it takes care of itself.  It doesn’t.
What to do and how to do it
Be sure your employees know what’s expected of them and what they are required to deliver. Their functions and responsibilities should be clearly defined and understood.
If it’s required, make sure employees receive adequate training and set performance standards. Training needs are ‘performance specific’ and must directly relate to key deliverables. As a manager you must have meaningful discussions with your staff about their development needs. If you identify gaps you must address them.
Keep an eye on performance
Putting in place individual performance agreements is a useful way to develop clear performance expectations. Organise a meeting with each person at the start of their job to discuss how you would like it to be performed and your expectations over the next 12 months. 
Prepare a performance agreement and make sure you have clear and measurable outcomes defined. They should also be:
•	specific
•	achievable
•	realistic
•	targeted and timed. 
Outcomes do not have to be numerical to be measurable. A measurable outcome could be a satisfaction rating such as, ‘All clients report they are happy with the employee’s work.’
Give regular feedback to all employees
Give regular feedback to the employees about how they are going. For example:
•	Provide positive comments as soon as you can on work that has been carried out well. Don't wait to do this or the moment is lost, and you’ll miss your chance to boost confidence and morale.
•	Give useful and constructive feedback sensitively. Not every task will be perfectly executed – and, certainly at the beginning, it may be very unreasonable to expect this. Tell employees about weak points in a considerate way so they can learn. It is in your interests that your staff members succeed and be committed to your corporation. 
•	Be constructive. Providing useful feedback is about letting employees know how they can perform tasks better and/or in less time. Don't save up your comments for a major feedback session. Give feedback as soon as possible after a task has been carried out. Make sure your tips for raising standards are both practical and reasonable. 
•	Be specific. When giving employees feedback, make sure you have specific examples of where they have performed well and/or areas where there’s room for improvement. Generalised negative feedback will not help much, and will often upset employees unnecessarily. If you haven’t clearly told your employees what their shortcomings are they will not know how to fix them. For example, don’t tell an employee they have a bad phone manner – tell them that when they answer the phone they are to say XYZ, that they are to be polite and speak in a friendly tone, and that they are to be as helpful as they reasonably can be. 

Conducting formal performance feedback sessions
Prepare well
If you decide to set up a formal performance feedback session as part of your management process, you need to prepare well. Have ready exactly what you want to say to each individual. Both the employee and manager have a responsibility for the outcomes of this process.
Make notes of your discussion
Make a note of the performance discussion and put it on the file of your employee. Before doing this, however, it may be sensible to invite your employee to read the document and, if he or she is happy with it, to co-sign. In this way the document becomes an official and agreed record of discussions. As time goes on and you hold further performance discussion sessions, these documents are able to give you quite a detailed employment history – highlighting an employee’s strengths and weaknesses, how you dealt with issues that came up, and what actions you plan to take in the future. In short, they are a useful shared document to track progress.
Poor performance may have a range of causes
Be aware that there may be some underlying reason for underperformance. Before taking a formal approach, try to find out if something is troubling your employee. There may be, for example, medical reasons or emotional reasons – like mental illness or the break-up of a personal relationship. How you deal with this is very important. Don’t ignore the situation. If there is a problem behind the employee’s poor performance, lend support and see what you can do to lessen work burdens, at least in the short term.
Dealing with serious underperformance
If there is an underperformance problem, with no mitigating circumstances and no will to improve, you need to warn the employee about possible serious consequences, including dismissal.  
Once employees have been warned, they need to be given a reasonable chance to lift their game. And to do this, you must make sure your employees have a clear idea of what is expected of them to do better—that is, they must have a clear idea of the standard of performance they must meet.  Generally they will need to be given real work to do over a reasonable period of time so that they can demonstrate improvement.
In some cases, extra training may be needed so employees are better able to do their jobs properly. You will need to give feedback along the way—to help your employees to reach the standard you have set for them.
If all fails, and you need to dismiss employees for poor performance, you will need to give your employees a chance to put their case to you. You must do this before you take the final decision to terminate employment.
Look at the Termination of Employment Guide for ORIC corporations covered by the federal industrial relations system and at your employee’s contract of employment.
Note: The Fair Work Ombudsman has published an excellent best practice guide on managing underperformance.  You can find this at 
http://www.fwo.gov.au/Best-Practice-Guides/Documents/09-Managing-underperformance.pdf
Managing performance is worth doing well
Remember, if the performance process is managed well, employees who are good performers will be encouraged that underperformance is tackled head on. And those employees who don’t work as well as they could will soon get the message that their performance is under review. 

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