Mental Health and Performance

Can you support an employee's wellbeing while still holding them accountable for their performance? It's a question many managers and business leaders are grappling with. Workplace wellbeing has rightly become a much bigger part of the conversation. Employers are thinking more carefully about workload, flexibility, psychological safety, burnout and how they

support their people. But what happens when someone's wellbeing starts affecting their performance? And how do you have that conversation without making an already difficult situation worse?

Wellbeing and performance aren't opposites

Psychosocial hazards and performance management are often treated as separate issues, but in reality, they can be closely connected. Managers may hesitate to address poor performance because they are concerned about an employee’s wellbeing or the potential for a difficult conversation to escalate. However, avoiding performance issues can create its own risks, increasing workload on other team members, creating frustration and contributing to workplace conflict.

Good performance management is not about punishing employees; it is about setting clear and reasonable expectations, providing appropriate support, having regular conversations and addressing concerns early. Managers also need to consider whether workplace factors such as excessive workloads, unclear roles, poor communication, interpersonal conflict or lack of

support may be contributing to the performance issue. The key is to manage both sides: support the person while still managing the performance.

Conflict is a significant psychosocial hazard in Australian workplaces

Safe Work Australia specifically identifies conflict and poor workplace relationships and interactions as psychosocial hazards, alongside bullying, harassment and violence. For managers, this highlights why workplace conflict shouldn't simply be dismissed as a personality clash or interpersonal issue. When conflict becomes ongoing, unreasonable or poorly managed, it can contribute to stress, psychological harm, absenteeism, reduced performance and, ultimately, workers’ compensation claims. Early intervention, clear expectations, respectful communication and confident management of difficult conversations are therefore critical to creating a psychologically healthy workplace.

When does wellbeing become a performance issue?

There isn't a single moment when it suddenly changes from one to the other. Instead, managers should look at patterns and impact. For example, are deadlines consistently being missed, or has the quality of work changed? Has attendance or reliability become an issue, or is their behaviour affecting other members of the team? One bad day isn't necessarily a performance problem, however a sustained change that isn't addressed can become one.

What should managers do when a high performer becomes disengaged?

These employees are often highly committed, reliable and motivated, so a noticeable change in attitude, productivity or behaviour shouldn’t be ignored. The first step is to have an honest, private conversation to understand what has changed. Is it workload, lack of recognition, career stagnation, workplace relationships, leadership, burnout or something happening outside of work?

Managers should listen without jumping to conclusions and avoid treating disengagement as a performance problem before understanding the cause. Supporting a disengaged high performer doesn’t mean lowering performance standards, it means understanding what is getting in the way of their performance and giving them the opportunity, support and clarity to re-engage. Often, the earlier a manager starts the conversation, the greater the chance of retaining a valuable employee and preventing a temporary issue from becoming a resignation.

How do you identify burnout before performance drops?

By the time performance has significantly deteriorated, the problem may have been developing for some time. Managers should pay attention to changes such as in their behaviour, work patterns, quality of work, energy, engagement and communication. They can be signals that a conversation is needed and that conversation shouldn't wait until the employee is already struggling significantly.

Where does the employee's responsibility begin?

Workplace wellbeing isn't solely an employer's responsibility; employees also have a role to play. That might include communicating when workloads become unmanageable, raising concerns early, using available support, taking reasonable breaks, maintaining appropriate boundaries and participating in agreed strategies to improve performance. Managers can't support a problem they don't know about. Wellbeing is a shared responsibility. The employer needs to create a safe and supportive environment. The employee needs to engage with that environment and communicate where they need help.

What if performance doesn't improve?

When performance doesn't improve, this is where managers can sometimes become uncomfortable. They may have provided support, made reasonable adjustments where appropriate, checked in regularly, clarified expectations and provided ongoing feedback, yet performance may still not meet the requirements of the role. At that point, avoiding the conversation doesn't help anyone. It isn't fair to the employee, the manager or the rest of the team, who may be carrying additional workload. Supporting an employee's wellbeing doesn't mean removing reasonable performance expectations. Good leadership means balancing compassion with accountability and understanding the individual circumstances while also being clear about what the role requires and what needs to improve.

What about the rest of the team?

If one person’s performance is consistently below expectations and nothing happens, other employees notice. High performers can become frustrated, workloads can become uneven and resentment can develop. That’s why accountability is part of wellbeing and creating a healthy workplace. People need to know that expectations are fair, consistent and reasonable. The best managers don’t wait for a performance problem to become a crisis; they notice changes early, have honest conversations, listen, clarify expectations, provide appropriate support and, when necessary, take action.

The real challenge isn't choosing between wellbeing and performance; it's learning how to manage both. A healthy workplace isn't one where performance expectations disappear and it isn't one where people are expected to perform regardless of what they're experiencing. It's one where people are supported to do their best and where leaders are equipped and confident enough to have the difficult conversations when they are necessary.