5 Common Performance Management Mistakes (And How to Fix Them)

Managing performance isn’t just about reviews and ratings. It’s not even necessarily about correcting negative behaviour and underperformance. It’s about creating an environment where expectations are clear, feedback is ongoing, and growth is supported. As great as performance management can be when done well, even the most well-intentioned managers can fall into some common traps, especially when they’re juggling multiple roles, tight timelines, and the daily demands of running a business.

If you're a business owner or people leader who cares deeply about your team, this blog is for you. Let's unpack five common performance management process mistakes that show up in New Zealand workplaces (even the good ones!) and more importantly, what to do instead.

1. Only Addressing Performance When There’s a Problem

Remember, performance management’s number one objective is to propel your business forward. It’s the key to growth. With this goal in mind then, we need to be proactive, not reactive, when it comes to addressing performance.

If the only time employee performance management conversations happen is when something goes wrong, we’re using performance management for the wrong reasons. And in this environment, it's no wonder people start to dread the word “feedback.” Waiting until there’s a visible issue can turn small missteps into major roadblocks, and it sends the message that feedback is synonymous with criticism, when it really should be much more than that! High performan

Try this instead:
Make performance management conversations a regular part of your one-on-ones. As a step before, actually, make one-on-ones common practice in your workplace (if they aren’t already). Share wins as they happen, and course-correct gently along the way. Regular check-ins keep your team engaged, supported, and aligned. It’s not just about correction—it’s about growth and motivation.

Want to build this into your routine? Our Performance Management Checklist covers how often feedback should happen and what to include in those conversations.

2. Confusing Performance with Personality

“They’re just not a good fit” is a feeling, not a fact—and it’s one that can get in the way of fair and effective performance management process nz. When we let gut instinct drive decisions without data or other forms of evidence, we risk misjudging talent and missing opportunities to coach people into success.

Try this instead:
Focus on the work. What behaviours or outcomes need to change? Be specific and measurable. Using models like SSI (Situation, Standard, Impact) can help remove bias from the equation and give your team clarity on what needs to improve.

3. Saving Feedback for Formal Reviews

Annual reviews are often filled with surprises, and not the good kind. Employees know there is an uncertainty attached to any review, which makes them dread them before they even come up. When feedback is infrequent and reserved only for these sessions, not only can it cause stress and agitation, but it loses its relevance. Think about it, if you’ve just handed in a project, would you want feedback tomorrow or in three months time? Does it even matter if it’s not timely?

Try this instead:
Shift to a rhythm of informal, in-the-moment feedback. Whether it’s a quick “great job” after a client win or a gentle steer during a project, these small exchanges build trust and make formal reviews feel like a summary, not a shock. Plus, giving regular feedback, focusing on achievements, makes any negative feedback down the road way easier to give (for you) and to receive (for the employee). It’s a win-win!

Tip: Set a calendar reminder for monthly check-ins. Not only will this boost engagement, but it’s also one of the easiest ways to embed continuous feedback into your team’s rhythm. You’ll be amazed at what a 20-minute conversation can unlock.

4. Setting Vague or Unrealistic Goals

Unclear targets are like setting out on a hike without a map - you might get somewhere, but it probably won’t be where you meant to go. While it’s great to be spontaneous from time to time, I think we can all agree that performance management has to unfortunately be a little more measured and thought-out. Goals that are too ambitious, vague, or disconnected from business outcomes can leave teams demoralised and directionless.

Try this instead:
Use the SMART goals framework (Specific, Measurable, Achievable, Relevant, Time-bound). Better yet, involve employees in goal setting. When goals feel relevant and attainable, motivation goes up, and so does accountability.

Need a pulse check on your current process? Our checklist can help you evaluate whether expectations are truly clear and aligned.

5. Skipping the Human Side

If you’re familiar with the Core HR way, then you’ll already know how much we stress and obsess over the “Human” part in “Human Resources”, and with good reason. Managing high performance teams isn’t just about compliance, it’s about care, empathy and connection. When we focus too much on policies and forget about people, we miss the chance to truly support our team. This can create a culture of fear instead of growth.

Try this instead:
Start from a place of empathy. Raise concerns early, offer support generously, and treat formal processes as the last resort, not the first step. When your team feels safe and supported, they’re far more likely to meet expectations.

We cover how to approach this in our checklist’s section on psychological safety and growth support.

Final Thoughts

Mistakes in performance management don’t always come from bad leadership. More often, they come from a lack of time, tools, or training.

The good news? They’re fixable, and the results of getting it right are huge: better retention, higher productivity, and a stronger team culture.

If you’re ready to take the next step, we’ve put together a simple yet powerful performance management process checklist that breaks down what great performance processes look like section by section. It includes practical prompts around everything from employee performance goals and objectives examples to a managing poor performance checklist.

Need help bringing your performance strategy to life?
We works alongside small and medium-sized businesses across New Zealand to make people management simple, providing practical, effective, no-fluff HR solutions. If you’d like personalised support to improve how performance is managed in your business, we’d love to support you and your team.