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Managing people's performance

Performance management means developing goals for employees to work to and regularly checking in to make sure they’re on track to achieve them.

It’s particularly motivating for people who need structure. But done right, it can be rewarding for all.

Why manage performance

Performance management helps you achieve your business objectives by:

  • identifying what employees are doing well and areas for improvement
  • finding out what employees would like to do and how you can help them to do it
  • ensuring that rewards and recognitions are fair and effective
  • motivating employees in the right direction
  • building an effective business culture.

For performance-based management to really work, you need to motivate people in other ways, eg learning and development, financial and non-financial rewards.

Make sure your employees have the right resources and skills to achieve their goals — and yours.

Make sure your employees have the right resources and skills to achieve their goals — and yours.

Thinking about performance management has evolved. Experts now agree it’s more effective to give employees ongoing feedback, rather than to talk once or twice a year about how they’ve done over the past year.

Many businesses now focus on coaching and development as performance-based management tools. They’ve switched from rigid annual reviews that only evaluate performance to regular check-ins that help people perform.

This approach to performance management looks at building future performance rather than dwelling on the past — which can be more helpful and motivating for both employer and employee.

Aim to check in with employees weekly, fortnightly or at least once a month.

Aim to check in with employees weekly, fortnightly or at least once a month.

Talk about what they’re working on and how you can help them meet their goals. Check goals are helping your employee and your business grow.

Worksheet: Assess performance in a role

Worksheet: Assess performance in a role

Get ready for a performance conversation with your employee. Grab their job description, think about what they do well and what they could improve, identify achievements, what to focus on, and goals that will work for them and your business.

Performance management in action

Fuel performance

Having a coaching mentality helps employees continually improve and stay on task.

To do this, you’ll need to:

  • Set clear expectations — make sure people know what you want them to do and how you want them to do it. Be certain they have the right skill level to do the job.
  • Review priorities — check whether they are on track, or will they need to shift their attention to another task to meet their goals?
  • Comment on specifics — is what they’re doing working, or is there a better way to approach the task. Try to be objective. Remember, your way won’t always be best. Get their input. They may have a better idea about what needs to be changed than you.
  • Coach and give information — steer them to information that will help them stay on track. Give constructive feedback, without laying out step-by-step what has to be done. Make it a joint effort — ask for feedback, too.

Be available

Knowing you’re invested in their goals will help employees stay motivated. Make times during the day or week when employees know it’s ok to meet with you. This helps if you’re constantly juggling business-related tasks with being there for your people. 

Stay objective

Studies show when managers rate employees’ past performance, bias can creep in. But when they think about how the person fits into their future business plans, they give a much fairer assessment. 

When thinking about employee performance, consider which of the following future-focussed statements fits them best:

  • I would give this person the highest possible pay increase.
  • I would always want this person on my team.
  • This person is at risk of performing badly.
  • This person is ready for promotion today.

Give the person a ranking, eg true, fairly true, neither true or untrue, not really true, not at all true.

This is a much fairer way to decide if someone gets a promotion, bonus or pay rise. Or to raise the red flag if someone’s performance is below par.

Ask people who work closely with the  person for their feedback.

Ask people who work closely with the person for their feedback.

This might be other managers, staff, suppliers, clients or someone else.

Managing performance levels

How employees are meeting their goals may influence your approach:

Overperforming employees

When people consistently go above and beyond what’s expected, make sure they know you appreciate it.

Some ideas:

  • A simple thank you — be mindful to make it clear what you’re thanking them for.
  • Make them star of the week, or similar — some people will cringe, others will love it.
  • Reward them with promotion, pay or another perk, eg letting them use the work van at the weekend.

Different personality types will respond to different things so use your intuition, or ask them. Personality tests are also a great way to learn more about your employees.

Regular performers

People who do exactly what’s expected can sometimes slip under the radar. Their performance isn’t exceptional, but it’s usually right on track. These employees can be a bit like the ‘middle child’. Make sure you keep them motivated by noticing and praising them, too.

Some ideas:

  • Show you’ve seen that they’ve done what you asked.
  • Get their feedback on how they felt about the project.
  • Find out what skill they’d like develop to help them grow.


Dealing with underperformance means treading a fine line. You don’t want to shatter your employee’s motivation. But long-term poor performance will damage your business and so needs to be dealt with before it gets worse. Don’t assume it’s all them. Make sure there’s nothing they need from you and be open to their feedback.

Some ideas:

  • Check they have the right skills and resources to do the job.
  • Try to show empathy and get to the bottom of what’s going on, from their point of view.
  • Suggest working with you, or another team member, to improve how they perform.
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