Under the Fair Work Act (FWA) it is important that companies have a formalised review process. Many smaller to mid-sized companies have a less structured system, leaving it up to individual managers to decide how to conduct an appraisal at the time.
The FWA has resulted in a major overhaul of the Workplace Relations System in Australia. The FWA makes changes that significantly reduce the flexibility for employers and increase the rights of employees.
The FWA increases the protection for employees who have been unfairly dismissed. It incorporates a range of related protections, including freedom of association, unlawful termination and other miscellaneous protection provisions.
The updated laws provide more comprehensive protection for employees than under the previous workplace relations law. As a result of this there will be increased scrutiny and potential exposure on redundancies.
Employees will be responsible for proving the reasons behind their termination decisions, as well as the validity of these decisions. This dramatically increases the importance of a good performance management process, performance appraisals and the upkeep of performance records.
Performance Appraisals And The Fair Work Act
Under the FWA it is important that companies have a formalised review process. Many smaller to mid-sized companies have a less structured system, leaving it up to individual managers to decide how to conduct an appraisal at the time.
Under the FWA it is now more important than ever for employers, no matter what their size, to establish and consistently administer systems that provide feedback regarding skill level, work quality and productivity. The entire process needs to be documented and kept up-to-date.
Employers who decide to terminate employees without communicating and documenting the areas of performance deficiency are taking a huge risk. The employer’s lack of communication will be seen as unfair and improper. A lack of documentation could potentially lead to a large monetary lawsuit against the employer even if they happen to be right.
For better transparency, consistency and control it is now considered best practice to use a web-based or server based performance management system to help document performance appraisals and limit the chances of a lawsuit.
What Are Performance Appraisals?
Performance appraisals are a structured formal interaction between an employee and their manager. In the appraisal process meetings are usually held where the work performance of the employee is reviewed and discussed. The idea is to identify strengths and weaknesses as well as any opportunities for improvement and skills development.
In many organisations performance appraisal results are used to determine rewards and promotions. The FWA requires employers to make employees aware of the company’s approach to formal and informal performance feedback, how performance will be measured and the procedures in place for employees to challenge a manager’s evaluation. To make sure this is successfully done employees need to ensure they have well documented performance appraisal documents and guidelines.
What Are The Benefits Of Performance Appraisals?
The most significant benefit of a formal scheduled appraisal is that it compels an employer and employee to have a one on one discussion about important work issues that might not otherwise be addressed. A well managed appraisal will allow an open forum for an employee to discuss their performance and also their career aspirations and future development needs. With daily time pressures these items can often not be discussed and in their absence can often lead to significant resentment by the employee. Further company management can use the process as part of its ongoing succession planning.
Performance appraisals are seen as beneficial and positive by both managers and employees. They offer a valuable opportunity to focus on work activities and goals, to identify and correct existing problems and to encourage continual improvements. Appraisals help to enhance the performance of the organisation as a whole.
The value of the interaction between managers and employees should not be underestimated. They help motivate and satisfy the employee, evaluate if any training is necessary, monitor the success of a company’s recruitment process and evaluate all processes.
The Fundamentals Of Performance Appraisals
In order for appraisals to be effective the systems needs to be relevant and applicable to everyday work, acceptable and fair and a mutual collaboration between the manager and employees.
For a performance appraisal to have the greatest impact it needs to follow a specific planned out process. The following five steps make up a basic performance appraisal process:
- Identify key performance
- Develop appraisal measures
- Collect performance information from different sources
- Conduct an appraisal interview
- Evaluate the appraisal process
When Should Appraisals Be Conducted?
All employees should undergo performance appraisals with their managers with timing that is based on the level of their role. However, the maximum time between reviews should be 12 months.
All performance appraisals should be timed from the date employment commences. Timing should be set and documented to ensure that performance management is a regular management responsibility.
It is important to remember that performance appraisals are separate from remuneration reviews, although the outcome of the two processes should be aligned.
How To Make The Documentation Process Simple
Under the FWA it is a requirement to document the whole performance appraisal process. This can be tedious and consuming. A web based performance management system can minimise the hassles.
Performance management systems simplify the appraisal administration process, eliminate paperwork and significantly reduce employee appraisal-time stress. The system is designed to significantly reduce the subjective nature of appraisals, allowing constructive and productive appraisal interviews to be conducted.
The system helps reach corporate goals and the KPIs of individuals to ensure specific accountability. The transparency of the process is enhanced and managers are better equipped to target-develop employees, retain top performers and identify poor performers.
Further, the advanced reporting functionality gives management the tools to assist with their HR strategic decisions for their organisation.