How to performance manage an employee in Australia
Performance management is a process, not a conversation. Done properly it takes weeks, not months, and most of the time it ends with the person improving. The process protects the business precisely because it gives the person a genuine chance to fix the problem.
First, work out what you're actually dealing with
Performance and conduct are different, and mixing them up is the most common mistake employers make.
Performance is someone not meeting the standard: too slow, too many errors, missing targets. It's addressed with support, clear expectations and time to improve.
Conduct is a choice: abuse, dishonesty, safety breaches, refusing a reasonable direction. It's addressed with an investigation, not an improvement plan. Serious misconduct can justify dismissal without notice, but only after you've found out what actually happened.
Two other things get mistaken for performance problems: an employee who is unwell, and an employee who was never told what was expected. Both need a different response, and neither is fixed by a warning.
The process, step by step
1. Get specific before you talk to anyone
Write down what the gap is, with examples and dates: "Three quotes sent late in a fortnight, and a customer complaint on 14 August," not "attitude." If you can't write it specifically, you're not ready to raise it.
2. Have the first conversation, and make it a conversation
Tell them what you've observed, ask what's going on, and listen to the answer. Genuinely. A fair chunk of the time there's something you didn't know: a system that doesn't work, a training gap, something happening at home. And it changes what should happen next.
Confirm what you agreed in a short email afterwards. Not a formality. A record.
3. Set the expectation in writing
What needs to change, how you'll both know it's changed, what support you're providing, and by when. Give a realistic timeframe: usually four to eight weeks, depending on the role and the gap. A week isn't a genuine opportunity to improve, and it will be read that way later.
4. Check in during the period, not just at the end
Short, regular, documented. If it's going badly, say so while there's still time to act on it. People should never be surprised at the end of a performance process.
5. Hold a formal meeting before any decision
Tell them beforehand what the meeting is about and that the outcome could include a warning or dismissal. Tell them they can bring a support person. Then actually hear their response before deciding anything, not after.
6. Decide, and put it in writing
If they've improved, say so in writing and close it out. If they haven't, the outcome might be more time, a warning, a change of role, or dismissal with notice. Whatever it is, set out the reason plainly and confirm it in writing.
What the Fair Work Commission looks at
If a dismissal is challenged, the questions are broadly these: was there a valid reason connected to capacity or conduct, was the person told that reason, were they given a real chance to respond, were they allowed a support person, and if it was about performance, were they warned before being dismissed.
Notice the pattern. Almost all of it is about process, not about whether you were right. Employers who were entirely right about the performance problem lose these cases regularly, because they can't show the person was told and given a chance.
The mistakes that undo an otherwise fair process
Warnings that aren't warnings. If the letter doesn't say the person's employment is at risk, it won't be read as a warning later.
No documentation. Everyone remembers the conversations. Nobody wrote them down, so they didn't happen.
Deciding first, meeting second. If the decision is made before the meeting, the meeting isn't a chance to respond, and it usually shows.
Waiting too long. Eighteen months of tolerating something makes it much harder to argue it was serious enough to act on.
Performance managing someone who just made a complaint, took personal leave, or raised a safety issue. Even if the performance concern is real and predates it, the timing invites a general protections claim. Unlike unfair dismissal, that has no minimum employment period. Get advice before you start.
Small business and the 12-month rule
If you employ fewer than 15 people, employees can't bring an unfair dismissal claim until they've been with you 12 months. For larger employers it's six months. If you dismiss inside that window and you're a small business, following the Small Business Fair Dismissal Code is what protects you.
This buys time, but it isn't a reason to skip the process. General protections and discrimination claims apply from day one, and a person you rush out badly talks to other people in your industry for years.
How long the whole thing should take
For a straightforward performance issue: a first conversation, four to eight weeks of a documented improvement period with check-ins, then a decision. Six to ten weeks end to end.
If it's dragging past three months, something has gone wrong: usually the expectation was never made specific enough to measure.
When to get help
Get advice before you start if the person has recently made a complaint, taken extended leave, raised a safety concern, or is on a visa tied to their employment. Get advice during if you're not sure whether what you're dealing with is performance or conduct. And get advice before dismissing anyone with more than 12 months' service, because that's the point at which process errors become expensive.
I'm Emily. Seventeen years in HR: operational HR, senior People and Culture leadership in public and community sector organisations and now advisory work with small and medium businesses across Australia. Most of this work is helping an owner or manager run the process themselves, properly, rather than running it for them.
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This guide is general information, not legal advice, and doesn't take your specific circumstances into account. TendHR is not a law firm.