At the outset, managers often struggle to articulate whether underlying issues are due to the organisation’s structure (potentially requiring a restructure) or related to individual performance. 

While restructuring can be an effective way to realign resources to meet changing market demands or strategic requirements, it must be driven by a genuine business need. When a business mistakenly proceeds with a restructure rather than formally addressing ongoing performance concerns, it can open itself up to risk with potential unjustified dismissal and disadvantage claims. 

The safest and most ethical approach, when issues clearly relate to individual performance, is to tackle these concerns head-on through a fair and transparent process. 

Fortunately, the guidelines are very clear.  

How to manage performance issues in the workplace 

Act early, act fairly 

When done well, performance management doesn’t just resolve performance issues, it also strengthens workplace culture. A healthy workplace culture is the foundation of good performance. When leaders set clear expectations from the start, employees are far more likely to succeed. This begins via strong onboarding, well-defined responsibilities and deliverables, regular feedback, and open communication about what success looks like. If expectations slip, they should be reset promptly and ideally documented so everyone is aligned. Timeliness and transparency are gold when it comes to performance management. 

The role of performance management 

At its core, a Performance Improvement Plan (PIP) provides: 

• A structured framework with specific, measurable goals
• Clear timelines
• An outline of the support needed to help an employee meet the expectations of their role 

Don’t be tempted to circumvent the plan. The crucial point to remember is that a PIP is designed as a developmental tool, not a punitive measure. Employers have a duty to act in good faith to genuinely support improvement. 

Avoiding common pitfalls with employee performance 

One of the biggest mistakes managers make is ignoring performance issues early on. Even a single incident deserves timely feedback. A simple, informal conversation can resolve concerns before they escalate. Most people want to do well, so approaching these conversations with curiosity and empathy, seeking to understand potential barriers or misunderstandings, will help get the employee on board with the process. If informal feedback doesn’t lead to improvement, the next step is implementing a formal PIP process. 

Note that performance management processes are prone to breaking down when steps are skipped, timelines rushed or outcomes predetermined. 

A fair process requires managers to: 

• Give employees the opportunity to respond
• Genuinely consider feedback
• Maintain transparency about the possibility of disciplinary action if improvement isn’t achieved 

Equally important is ensuring that performance standards are as clear and objective as possible, and clearly defined within the PIP itself, rather than leaving managers to make subjective judgments based on vague or unspecified criteria. 

Performance management process overview 

To bring this all together, the table below provides a high-level overview of the key steps (in order) in the performance management process.   

By fostering open dialogue and supporting employees through each stage, managers not only address immediate concerns but also lay the groundwork for a more resilient, engaged and high-performing workplace. 

If you need support with a performance management process, or some tailored advice or support along the way, please reach out to one of our performance management specialists to discuss. They assist businesses across New Zealand.