Clear, fair and under control: 6 tips for effective performance management

Originally published in 2012 | Updated September 2026

Performance management can be one of the more challenging parts of leading a team. Done well, it gives employees clarity, support and a genuine opportunity to improve. Done poorly, it can damage trust, increase stress and create unnecessary workplace risk.

The fundamentals remain relevant in 2026: address concerns early, set clear expectations, listen carefully and follow through on support. Here are six practical tips for managing performance fairly and effectively.

1. Develop a clear process and apply it fairly

Have a performance management process that explains how concerns will be raised, when informal coaching may move to formal action, and who is responsible for each stage.

Follow applicable policies, employment agreements and industrial instruments. Apply consistent principles while considering each employee’s circumstances.

Before a formal meeting, explain its purpose, provide relevant information and invite the employee to bring a support person. Give them a genuine opportunity to respond before deciding what happens next.

The Fair Work Ombudsman’s managing underperformance guide provides practical guidance on preparing for and conducting these conversations.

2. Keep clear, factual records

Document the performance concerns, specific examples, discussions, employee responses and support offered. Record what needs to improve, who will take each action and when progress will be reviewed.

Keep records objective. Describe observable work and behaviour rather than making assumptions about someone’s attitude or motivation. Share written meeting summaries with the employee and give them an opportunity to identify inaccuracies.

Good documentation supports a fair process, but it cannot make an unfair process fair.

3. Make expectations specific and achievable

Employees need to understand what successful performance looks like. Explain the required standard, where performance is falling short and how improvement will be assessed. Acknowledge strengths as well as areas that need attention.

A performance improvement plan should set out:

• The specific areas requiring improvement.
• Realistic, measurable expectations.
• Training, resources and support to be provided.
• Responsibilities for both the employee and manager.
• Review dates and a reasonable timeframe.
• Potential consequences if the required improvement is not achieved.

Seek the employee’s input and work towards a shared understanding. Record any disagreement and consider it fairly.

4. Listen to the employee and examine the work environment

Underperformance can have several causes. Ask questions before drawing conclusions, and consider whether unclear priorities, excessive workloads, inadequate resources or gaps in training are contributing.

Safe Work Australia identifies high job demands, poor support and lack of role clarity among common psychosocial hazards. Addressing these factors may be an essential part of improving performance.

If an employee raises health or personal concerns, respond respectfully and involve HR or an appropriate adviser to consider support and any applicable adjustment obligations. Managers should focus on workplace needs rather than attempting to diagnose a condition.

5. Allow a reasonable opportunity to improve

Set timeframes that reflect the role, the performance gap and the support needed. Schedule regular reviews so employees know how they are progressing and can raise difficulties early.

Keep the process focused on improvement. Avoid changing targets without explanation or treating the outcome as predetermined.

Performance management can involve difficult conversations. However, reasonable management action carried out in a reasonable manner is not workplace bullying. Both the action and how it is delivered matter.

6. Provide coaching and follow through on support

Outlining the required standard is only part of the manager’s role. Employees also need practical help to develop the skills and confidence to meet it.

Deliver the training, coaching and resources you have committed to. Give timely feedback, recognise progress and address remaining gaps directly and respectfully. For remote or hybrid employees, make sure access to feedback and support is equally reliable.

At each review, explain what has improved and what still needs attention. If performance remains below the required standard, consider the employee’s response and the support provided before deciding on further action. Seek appropriate advice before taking steps towards dismissal.

Effective performance management is an ongoing leadership responsibility. Clear expectations, regular conversations and fair decisions help employees understand where they stand and give them a meaningful opportunity to succeed.