Performance management is essential for a business’s success, ensuring employees meet goals and contribute effectively to the company’s objectives.

However, managing underperformance can become a source of stress and anxiety for some, potentially impacting the employees’ mental health. In 2022 the Managing the risk of psychosocial hazards at work Code of Practice was released providing the employer with a positive duty to manage the risk of mental health within the workplace.

We’ve put together some key do’s and don’ts to guide you through this tricky process.


Create a Safe and Supportive Environment
Foster an open culture where employees feel safe discussing their challenges without fear of judgement or retribution. Encourage regular check-ins to ensure employees receive consistent feedback from their managers and feel comfortable voicing their concerns.

Explore the reasons for poor performance through informal discussions and employee history documentation, especially when mental health is a known factor. Provide support and make reasonable adjustments before formal performance management procedures occur. Employees who are aware that performance management is occurring are likely to be more mentally prepared. Keep the process concise to avoid overthinking.

Approach with Empathy
Understand that underperformance can stem from personal or family challenges, work-related pressures, and or existing mental health concerns. Engage in empathetic conversations, showing genuine concern for employees’ well-being rather than focusing solely on performance metrics.

Training for Managers
Equip managers with training on mental health awareness, fair performance management processes, effective communication, and compassionate leadership. This ensures they handle performance issues sensitively and supportively.

Clear and Constructive Feedback
Offer clear, specific, and constructive feedback that focuses on behaviours and outcomes rather than personal attributes. This helps employees understand what needs improvement without feeling personally attacked.

Set Realistic Goals and Expectations
Ensure that goals for improvement are realistic and attainable, considering the employee’s current situation and mental health. Provide support with breaking down larger goals into smaller manageable tasks to avoid overwhelming the employee.

Offer Support Resources
Allow the employee to bring a support person to performance management meetings. Provide access to mental health support resources, such as counselling services, employee assistance programs (EAPs), and wellness initiatives.

Provide Flexible Work Arrangements
When possible, offer flexible work arrangements to help employees manage stress and maintain work-life balance. Consider adjustments like flexible hours, remote work options, or modified workloads to accommodate their needs.

Regular Check-In and Follow-Up
Monitor the employee’s progress regularly and provide continuous support and encouragement. Adjust the performance improvement plan as needed, considering any new developments or feedback from the employee.

DON’T make assumptions or judgments
Avoid labelling the employee as “lazy” or “unmotivated” without understanding the root causes of their underperformance.

DON’T force disclosure
Allow employees to disclose any health problems that might impact their performance, but do not force them to reveal their health or personal issues.

DON’T ignore warning signs
Act early if there are significant changes in the employee’s behaviour, such as increased absenteeism, reduced productivity, aggressive behaviour or comments, or noticeable stress. Addressing these signs promptly can prevent larger problems from developing.

Balancing performance management with mental health support requires a thoughtful and empathetic approach. By fostering open communication, providing necessary resources, setting realistic goals, and being attentive to warning signs, you can help ensure that performance management processes not only address underperformance but also support the mental well-being of your employees. This balance is crucial for creating a positive, productive, and healthy workplace for all.

We completely understand the tight-rope of mental health within the workplace and balancing the needs of the business and the employee for ongoing success.

Some of our team members undertook the St John’s Mental Health First Aid course and we can’t recommend this 2 day training more highly.  Click here to find out more:  Standard Mental Health First Aid – St John Ambulance QLD (stjohnqld.com.au) .

We also work closely with Emily and Scott at Get Mentally Fit who provide Organisational Psychology Services to businesses and individual  Workplace Psychology Services | Get Mentally Fit

Our professional team can help you implement effective strategies, ensuring your organisation maintains a healthy balance between performance expectations and employee well-being. Please feel free to contact us.

Email: info@humanresourcing.com.au or Phone: (07) 5613 1846.

(written by Victoria Li, Senior HR & WH&S Coordinator)