Understanding Performance Management

The organisation’s role in performance management

In the ideal situation:

  • The organisation accepts that performance management is an important way of guiding, developing and rewarding staff.
  • The organisation’s performance management system is integrated with other business planning processes and is focused on longer-term goals.
  • The organisation has established a culture in which individuals and teams take responsibility for the continuous improvement of business processes and of their own skills, behaviour and contribution.
  • The organisation encourages a shared expectation of what will be achieved during the year by listing objectives in business plans.
  • The organisation measures standards of performance informally throughout the year and formally at least once a year.

The manager’s role in performance management

In the ideal situation:

  • Managers use the performance management system to achieve a positive work environment. They encourage individual staff members and the team to behave in a way that fosters better work relationships. They regularly review staff performance and provide them with training that will lead to improvements in their standard of work.
  • Managers inform staff of what they are expected to accomplish over the next year.
  • Managers praise staff on their accomplishments. They give them timely, constructive feedback when their work needs improvement.

The individual’s role in performance management

In the ideal situation:

  • Individuals regard performance management as an effective way of achieving a positive work environment.
  • Individuals contribute to the discussion of individual and team goals. They discuss their career goals, development needs and work preferences with their manager.
  • Individuals understand what is expected of them over the next year, have the capacity to undertake the work and are supported with training.
  • Individuals are praised and rewarded for their accomplishments. They receive timely, constructive feedback from their manager when they need it.

The litmus test for performance management

Some important questions to ask about your organisation:

  • Does the organisation integrate performance management with other aspects of the business?
  • Does the organisation recognise that performance management is an important way of achieving a positive work environment?
  • Does performance management incorporate performance improvement, skill development and behaviour assessment?
  • Are employees actively engaged in managing their own performance?


Measures that may be useful for confirming the quick check tool results or monitoring cultural change could include:

  • Career path ratio
  • Retention rate

A Dictionary of People Metrics 

Case study: The Power of a Positive Plan

Dale, the newly appointed manager of the Overseas Business Unit was failing miserably in his role. Rather than disciplining him as he’d expected, Dale’s boss Noel sat him down to talk about what he thought was going wrong and why. Together, they worked out that Dale just didn’t have a plan of action, so they developed one with assistance from the

HR director. They first looked at Dale’s natural strengths. He had always been good at identifying and promoting business opportunities for Victoria in Asia but now he had a much broader brief. He had tried the same strategies without success in America and Europe. He had not listened to advice from people who had been working in these markets for some time.

So Dale’s performance improvement plan identified a number of challenging goals that he was to achieve over the coming year. He needed to improve his knowledge of other markets, become more open to other viewpoints, be more adaptable to changing circumstances and establish new business networks in America and Europe.

Noel and Dale agreed on how his performance in these areas would be measured and on the support he would receive. Dale worked hard during the year to improve his performance. He met regularly with Noel to discuss his progress and get further tips and advice from him.

Dale succeeded beyond everyone’s wildest dreams. All he had needed was a little direction and this had been provided through a well-planned, positively focused and measurable plan and his manager’s support and encouragement.

Further Resources for Workflow Management

  • Code of Conduct for Victorian Public Sector Employees
  • Code of Conduct for Victorian Public Sector Employees of Special Bodies
  • Directors’ Code of Conduct and Guidance Notes
  • Ethics Framework: chapter on reinforcing ethical behaviour
  • Ethics Framework Planner: how to reinforce ethical behaviour
  • Ethics Resource Kit: Implementation Guide (a: performance management) Feedback Matters: Effective Communication is Essential
  • Merit in Employment Standard and Guidelines
  • Talking Performance
  • The Victorian Public Employment Capability Framework: An Introduction for Public Sector Agencies
  • The VPS Employment Capability Framework: Strengthening the Professionalism and Adaptability of the Victorian Public Service
  • Victorian Public Sector Workforce Planning Resource Kit
  • VPS Employment Capability Framework Card Set: A Tool for Managers