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1 Contents Contents Before you begin Learning outcomes Competency standard How to use this book Assessment Developing employability skills Developing an evidence portfolio Resources vii vii vii x xi xi xv xvi Introduction: Managing performance management systems 1 Chapter 1: Developing performance management systems Analysing organisational plans to identify relevant policies and objectives 6 for the system 1.2 Designing methods and processes for managers to develop KPIs Developing time frames and processes for formal performance 11 management sessions 1.4 Ensuring the flexibility of systems to cover the range of employment 15 situations within the organisation 1.5 Consulting with key stakeholders about the features of the system Gaining support for the implementation of the system 21 In ACTION 23 Discussion topics 23 Chapter summary 23 Find out more 24 Checklist for Chapter 1 24 Assessment activity 1: Developing performance management systems 25 Record your employability skills 26 Chapter 2: Implementing performance management systems Training relevant people to monitor performance and identify 28 performance gaps 2.2 Ensuring performance is monitored regularly, and appropriate 31 intervention occurs 2.3 Assisting managers to address poor performance 34 iii

2 BSBHRM503A Manage performance management systems 2.4 Supporting managers to counsel and discipline employees Providing support to terminate employees who fail to respond to 40 intervention 2.6 Recognising excellence in performance Ensuring the outcomes of performance management sessions are 45 accessible and stored appropriately In ACTION 47 Discussion topics 48 Chapter summary 48 Find out more 49 Checklist for Chapter 2 49 Assessment activity 2: Implementing performance management systems 50 Record your employability skills 51 Chapter 3: Coordinating formal feedback processes Developing feedback plans, and lodging them with HR staff Providing training and assistance to managers participating in the 57 feedback process 3.3 Agreeing on plans for performance improvement and individual learning 59 and development 3.4 Establishing grievance processes Making specialist advice on career development available to participants 64 In ACTION 65 Discussion topics 66 Chapter summary 66 Find out more 67 Checklist for Chapter 3 67 Assessment activity 3: Coordinating formal feedback processes 68 Record your employability skills 69 Chapter 4: Coordinating learning development plans Contracting appropriate providers for performance development Designing learning and development plans Delivering learning and development plans, and ensuring they deliver 78 specified outcomes 4.4 Ensuring the compliance of activities with quality assurance standards Negotiating remedial action with providers Generating reports on the progress and success rates of activities Evaluating and improving the system regularly 88 iv

3 Before you begin In ACTION 89 Discussion topics 90 Chapter summary 90 Find out more 91 Checklist for Chapter 4 92 Assessment activity 4: Coordinating learning development plans 93 Record your employability skills 94 Final assessment: BSBHRM503A Manage performance 95 management systems Employability skills 99 v

4 Chapter 1: Developing performance management systems Chapter 1 Developing performance management systems Of all the initiatives conducted in an organisation, it is the performance management process that consistently supports the business. Your responsibility is to ensure that the performance management system is supported by managers and employees and that it provides continued value to the organisation. Your role is to facilitate the establishment and monitoring of processes that contribute to the performance management system. This involves working closely with managers at all levels within the organisation to help develop key performance indicators (KPIs), ensuring that the system meets organisational needs and is supported across the organisation. This chapter will discuss the following theory: 1.1 Analysing organisational plans to identify relevant policies and objectives for the system 1.2 Designing methods and processes for managers to develop KPIs 1.3 Developing time frames and processes for formal performance management sessions 1.4 Ensuring the flexibility of systems to cover the range of employment situations within the organisation 1.5 Consulting with key stakeholders about the features of the system 1.6 Gaining support for the implementation of the system 5

5 Chapter 1: Developing performance management systems 1.3 Developing time frames and processes for formal performance management sessions A performance appraisal is the formal assessment and rating of individuals by their managers, usually as part of their annual review meeting. Performance management, on the other hand, encompasses a wider scope of ongoing activities and aims to clarify mutual expectations and establish support requirements to enable the employee to more effectively meet their performance goals. Managing the performance management system requires developing suitable processes and time lines so line managers can conduct formal sessions with their staff, consistent with organisational requirements. Formal performance management sessions are an opportunity to help staff identify how they can better contribute to organisational goals. Performance management sessions Formal performance management sessions provide a means through which the five primary performance management elements of planning, monitoring, developing, assessing and rewarding can be put to good use. Sessions should provide an opportunity for: undertaking self-assessment and reflection reaching a mutual agreement regarding the employee s performance identifying problems and/or barriers to effective performance and determining appropriate solutions coaching, mentoring or other support and guidance. One of the key functions of this meeting is to look forward to what needs to be done by people to achieve the purpose of the job; to meet new challenges; to make better use of their knowledge, skills and abilities; and to develop their capabilities by encouraging a self-management approach. 11

6 BSBHRM503A Manage performance management systems 1.5 Consulting with key stakeholders about the features of the system When establishing a performance management system, you need to take the time to understand the needs and concerns of relevant stakeholders and in some cases consult with them when shaping the features of the performance management system. These stakeholders may include: senior management line managers and supervisors employees union representatives. You require leadership skills that allow you to obtain the support and endorsement of stakeholders in the organisation s performance management system. Stakeholder consultation is important for the long-term effectiveness of an organisation and enabling it to build a sustainable performance management system. Determining the features of the system When consulting with your key stakeholders you should use the performance management cycle to discuss key features of the system. System feature Planning Monitoring Developing You will need to decide on: Description a process for the creation of KPIs and how to ensure vertical alignment with organisational objectives time frames for performance management sessions and how often they will be held the development of processes and documentation to support all stages of the performance management system. In conjunction with stakeholders, determine the most effective ways for managers to monitor staff performance. For example, it may be decided to hold annual performance reviews with employees and that these reviews will be further supported by monthly progress meetings between a manager and staff. Part of monitoring involves managing underperformance; determine the organisation s policies and procedures for managing underperforming employees or employees who have not complied with organisational standards or requirements. In consultation with stakeholders consider both internal and external opportunities for developing and improving employee performance. This may include coaching, mentoring, external training courses, career counselling and so on. Both you and line managers may also need to be skilled in how to effectively deliver performance improvement methods to other staff. continued 18

7 Chapter 1: Developing performance management systems In ACTION Legal Eagles is a large law firm with offices in each capital city in Australia. Recently, retention of staff became a major concern as experienced professional and administrative staff leave or are poached by other firms. A year ago, senior management decided to review the firm s performance management system to stem the exodus, ensure that high-performing staff are retained and to stay ahead of their competition. Discussions were held at all levels of the organisation to identify critical features of the system. By consulting with all employees, the human resources department is able to develop a system that is user-friendly and supported by staff at all levels. One of the key changes implemented is to ensure a planning meeting occurs each year between managers and employees to establish personal and professional goals consistent with the strategic objectives of the business. Because of the diversity of the workforce the firm employs legal professionals, administrative and clerical staff and paralegal staff a consultant builds a complete performance management system based on organisational goals and input from some of the more influential stakeholders. Six-monthly progress reviews are implemented to enable discussions to occur regarding performance achievements and performance issues. Another change is to promote flexible working arrangements such as job-sharing, working from home and flexible working hours. Project outcomes are monitored to ensure individuals meet their targets. It has been a year since the performance management system was implemented and senior partners can already see positive results in staff retention and the relationships between legal and ancillary staff. Discussion topics Learners in a classroom can form a discussion group or have a debate. Those in the workplace might like to brainstorm these ideas with their colleagues. If you are learning independently, you might like to set up a chat room with other learners or ask a friend for their opinion. Performance appraisal is no different to performance management. Gaining support for new ideas within a business is more a political exercise than a logical one. Many employees view performance management as a negative exercise. How can I create a more positive view of performance management? Chapter summary Analysing the organisation s structure allows you to define reporting roles, positions of influence and cross-functional relationships and develop insight into the nature of the organisation. Performance planning is used to provide a structured approach to the attainment of the desired level of performance for individuals and teams. Key performance indicators (KPIs) are measures commonly used to define and evaluate how successfully an individual or team is performing. 23

8 BSBHRM503A Manage performance management systems 2.5 Providing support to terminate employees who fail to respond to intervention Termination is the cessation of the contract of employment between an employer and an employee, at the initiative of the employer within relevant industrial agreements. Termination should be a last resort, used after all attempts to correct an employee s underperformance or poor behaviour have failed. Termination of employment shouldn t be regarded as a disciplinary measure; rather, it should be a response to a problem for which no other resolution can be found. For some human resource practitioners, termination of employment due to poor individual performance represents a failure of the performance management process. Before you or a line manager decides to terminate a person s employment, you should be aware of the legislation for dismissal and the rights granted to employees in the event of a termination. Some legal obligations Laws relating to employee dismissal are largely state- and territory-based. However, similar general principles apply across all jurisdictions. A valid reason is required, usually based on an employee s poor performance, or for operational reasons. These laws are largely designed to ensure that workers are dismissed for a valid reason and protect workers from unfair dismissal practices. For example, in New South Wales, it is illegal to dismiss an employee for: temporary absence from work due to illness or injury participation in union activities outside working hours or with the employer s consent inside working hours union membership or non-union membership; being an elected representative of the employees filing a complaint or taking legal action against an employer reasons relating to race, colour, sex, sexual preference, age, physical or mental disability, marital status, ethnicity or religion. Termination should also be mindful of anti-discrimination and equal opportunity legislation and other ethical principles. The reason/s for terminating employment must be communicated to the employee. Accepted reasons for termination fall into the following two categories. Poor performance when an employee s performance has been unsatisfactory and records show a work history that supports your claim. Changes to the operational requirements of the business if the organisation can no longer support the job position the employee currently holds. This may be due to restructure, financial issues, competitive forces or legal requirements. A restructure is not a valid reason if it is viewed not as a necessary act but rather as a strategy to dismiss an employee. 40

9 Chapter 2: Implementing performance management systems Find out more Resource Walking with leaders Taking action to address poor performance PoorPerformance.html My BRC The basics on unfair and unlawful dismissal https://mybrc.com.au/staffing/staff-solutions/ Firing-Staff/Pages/Basics_Unfair_Unlawful_ Dismissal.aspx New South Wales Government Industrial Relations Counselling and disciplinary procedures Employers/Dismissing_staff/Counselling_and_ disciplinary_procedures.html Office of the Privacy Commissioner Western Australian Government, Equal Opportunity Commission FAQs Why it is useful This website provides useful tips for managing poor performance. This site provides an overview of unfair and unlawful dismissal, and the difference between the two. This website provides information on how to provide counselling and administer disciplinary procedures in accordance with legal requirements. This website contains information regarding the key principles for storing, recording and accessing personal information. This Western Australian government site is devoted to frequently asked questions about equal opportunity and employment. Checklist for Chapter 2 Tick the box when you can do the following. Train relevant people to monitor performance and identify performance gaps Ensure performance is monitored regularly, and appropriate intervention occurs Assist managers to address poor performance Support managers to counsel and discipline employees Provide support to terminate employees who fail to respond to intervention Recognise excellence in performance Ensure the outcomes of performance management sessions are accessible and stored appropriately 49

10 BSBHRM503A Manage performance management systems Discussion topics Learners in a classroom can form a discussion group or have a debate. Those in the workplace might like to brainstorm these ideas with their colleagues. If you are learning independently, you might like to set up a chat room with other learners or ask a friend for their opinion. Discuss the advantages of informal feedback. Do you think that informal feedback could be better used to help staff? How? All performance management activities should be conducted formally in order to keep accurate records and historical evidence. In our organisation we don t like to promote our grievance policy, because it draws attention away from our organisation s successes. Of course, if an employee went down that path we would adhere to our policy, but it is not something we seek to draw attention to. Chapter summary Performance feedback, both negative and positive, must be provided to employees. It is crucial for advancing and improving organisational productivity. To be worthwhile and effective, feedback requires planning, care and skill. Performance feedback, if it is to achieve its purpose, needs to be delivered in a constructive and positive way, with specific reference to detail, rather than with general comment. It is a powerful tool if provided in an ongoing way rather than during performance reviews alone. A performance improvement plan should facilitate constructive discussion between a staff member and their line manager and clarify the work performance to be improved. The effectiveness of a performance management system and its embedded feedback process depends on how well managers and team leaders use it. The organisation may need to provide training and support to line managers and supervisors to ensure they have the knowledge and skills to provide effective feedback. A performance improvement plan is a concise and specific plan to improve on recognised issues and may be used in conjunction with a personal development plan. Performance improvement plans should be agreed on by management and the employee/s concerned. Plans should provide for consistent and fair treatment of employees across an organisation or department. The primary purpose of an appeal and grievance procedure is to provide a means by which employees, without jeopardising their jobs, can express complaints or dissatisfaction with an outcome and obtain a fair and unbiased hearing. Career development looks at how individuals manage their careers within and between organisations and how organisations structure the career progress of their employees and prepare a person for more-rewarding positions. 66

11 BSBHRM503A Manage performance management systems Assessment activity 3 Coordinating formal feedback processes The following table maps the assessment activity for this chapter against the element and performance criteria of Element 3 in BSBHRM503A Manage performance management systems. The activity has been designed for all learners to complete. Part Element Performance criteria A 3 All B 3 All Part A: Theory review and application What role does positive and negative feedback play in the performance management process? Why is it important to lodge feedback with HR? Provide two suggestions on how managers can successfully use formal and informal feedback to improve performance. Outline the kind of training or assistance you may use to support managers in your organisation to provide effective feedback. What is a performance improvement plan and how should managers use it to improve performance? Describe the purpose of a grievance process. What role does career advice play in the performance management process? Provide one example of how a manager could utilise career advice for an underperforming employee. Part B: Case study Read the case study, then complete the tasks that follow. Case study A medium-sized professional accounting practice hires you as a human resources consultant. The firm has three partner accountants, eight junior accountants and eight administration staff in various roles including office management and administration support (including a junior office clerk), financial control, customer service and marketing. Two of the administration staff have concerns in relation to their respective roles. The customer service team member feels under-qualified and has no-one to ask about service issues, as most staff are from a financial background. The junior office clerk wants to clarify his career goals and establish an appropriate direction, but this hasn t been actioned by the firm. The reason the three partners have asked for your help is that they are having trouble managing the performance of their staff. Specifically, they don t have an effective or efficient way in which to listen to, record and use feedback from their staff. In addition, none of the partners are able to devote sufficient time to the overall performance management process and would like to pass responsibility for performance management to the administration manager. 68

12 Chapter 4: Coordinating learning development plans Example Mid-level manager Joseph is considering development options for one of his staff, Sue. In a recent performance evaluation, Sue agreed that she needed more knowledge and understanding of corporate taxation compliance in order to fulfil her role more readily and be more confident. Joseph consults his HR manager regarding the training options for Sue. According to the HR department, the organisation s budget allocation allows for any form of external training, as long as it is work-related and a case for improved work outcomes can be argued with the HR manager. Joseph asks Sue to research local providers and come back with at least two options including costing, time requirements and how she perceives her work performance and the organisation will benefit. Practice task 19 Read the case study, then complete the tasks that follow. Case study John is an employee of 20-years standing with Smithhurst Construction. He has performed numerous roles for the company including foreman, site manager and technical training officer. John is from the old school and is not keen on adopting new technology. Recently the organisation automated their training and reporting systems. Smithhurst has held internal training sessions to upskill employees but John has not attended any of these. As John s manager, you approach him regarding the inappropriateness of his behaviour and he agrees to undertake the performance development activities that you recommend. The HR manager informs you that company policy for external training requires return on investment justification for every request. 1. Identify performance development activities that John could undertake. Use your organisation s policies and procedures to guide you and resources on the Internet to help you. 2. Comment on the reasons behind your choice of provider with respect to company policies or development options. 75

13 BSBHRM503A Manage performance management systems 4.2 Designing learning and development plans A learning organisation exists when the culture, systems, processes and policies all provide opportunities to foster and enhance the organisation s knowledge base. The following table lists and describes activities that contribute to a successful learning organisation. As you read through, consider how a learning and development plan can be used to incorporate each activity. Activities Methodical problem-solving Trialling new methods Learning from experience Disseminating knowledge quickly and efficiently throughout the organisation Description Creating a systematic approach to the identification, analysis and improvement of existing problems This can include one-off trials, or ongoing experiments with new ways of learning about or doing specific tasks An ongoing analysis of historical events, both internal and external to the organisation, to determine the best and least effective methods used in the past with the aim to improve future experiences Creating efficient, seamless methods of getting information to those who need it or can benefit from it Learning and development plans Learning and development plans are an integral part of the process of creating a learning organisation as they: are directed by organisational policy contribute to and form part of the learning culture assist managers and staff to understand and implement the learning process create skills and knowledge outcomes that can be monitored and measured. Learning organisations take time to develop. The most successful organisations have developed a learning culture based on the attitudes, commitment and management processes that support an open learning environment. Successful learning organisations have the capacity to continually adapt and respond to changes in business environments. Once managers have established a supportive and open environment, learning and development plans should be created for their employees. These plans must be designed using specific learning outcomes and tailored to meet the needs of the individual and organisational strategic directions. A learning and development plan should: incorporate and adhere to existing legislation and corporate policies regarding learning, privacy, anti-discrimination and health and safety list and describe the learning activities required to be completed by the employee 76

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