Training, performance management and termination (VCE Business Management Unit 3)
“Training options - on-the-job and off-the-job - and their benefits; performance management strategies - management by objectives, appraisals, self-evaluation, employee observation; termination management - retirement, redundancy, resignation, dismissal, and the entitlement and transition issues involved”
Training comes in two modes - on-the-job (in the workplace, low cost, directly relevant) and off-the-job (away from the workplace, specialist depth and formal certification). The four performance-management strategies are management by objectives (joint goal-setting, links to Locke and Latham), performance appraisals (formal periodic review), self-evaluation (employee assesses self) and employee observation (manager observes in the flow of work). Termination management covers retirement, resignation, redundancy (genuine, with service-scaled pay and redeployment first) and dismissal (valid reason, procedural fairness, documented warnings). Manage entitlements, transition support and the morale of the remaining workforce. Apply with a real Australian example such as Coles's automated distribution-centre transition.
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What this dot point is asking
VCAA wants you to know the two training options (on-the-job and off-the-job) and their benefits, the four performance-management strategies (management by objectives, appraisals, self-evaluation, employee observation), and termination management (retirement, resignation, redundancy and dismissal) including the entitlement and transition issues. Section A questions commonly test training types or a single performance-management strategy; Section B case studies often require you to recommend how a scenario business should train, manage and, where necessary, exit staff lawfully and humanely.
The answer
Training options
Training develops the skills, knowledge and behaviours employees need. The study design names two delivery modes.
On-the-job training
Training delivered in the workplace while the employee performs the actual role. Methods include coaching, mentoring, job rotation, shadowing and supervised practice.
- Benefits
- Low cost, directly relevant to the role, the employee stays productive while learning, and learning transfers immediately because it happens in context.
- Limitations
- Quality depends on the trainer, bad habits can be passed on, and it can disrupt the trainer's own work.
- Example
- A new Coles team member learns the register, stock rotation and customer-service standards from a supervisor on the shop floor.
Off-the-job training
Training delivered away from the immediate workplace - external courses, classroom sessions, e-learning, conferences and formal qualifications (TAFE, university, professional certifications).
- Benefits
- Access to specialist expertise, broader and deeper skills, formal certification, and fewer workplace distractions.
- Limitations
- Higher cost, the employee is away from production, and the learning may need adapting to the specific workplace.
- Example
- A NAB employee completing an external risk-and-compliance qualification, or an Atlassian engineer attending an industry conference.
Most businesses blend the two - on-the-job for role-specific skills and off-the-job for formal qualifications and leadership development.
Performance management strategies
Performance management is the ongoing process of setting expectations, monitoring performance and supporting improvement. The study design names four strategies.
1. Management by objectives (MBO)
Manager and employee jointly set specific, measurable objectives aligned with business goals, then review performance against them at set intervals. MBO links directly to Locke and Latham's goal-setting theory - participation builds commitment, and clear goals with feedback drive performance.
2. Performance appraisals
A formal, periodic review (annual or quarterly) of an employee's performance against expectations, with structured feedback and a development plan. Modern variants include 360-degree feedback, where input is gathered from peers, subordinates and customers as well as the manager.
3. Self-evaluation
The employee assesses their own performance against agreed criteria. Builds self-awareness and ownership, and surfaces gaps the manager may not see. Usually paired with a manager review rather than used alone.
4. Employee observation
The manager directly observes performance over time, gathering evidence in the flow of work rather than only at review points. Common in customer-facing and operational roles where performance is visible.
Termination management
Termination is the ending of the employment relationship. The manager must handle each type lawfully (under the Fair Work Act 2009 and the National Employment Standards) and with care for the employee and the remaining workforce.
| Type | What it is | Key manager considerations |
|---|---|---|
| Retirement | The employee voluntarily leaves at the end of their working life | Superannuation and entitlement payout, knowledge transfer, succession planning, phased-retirement options |
| Resignation | The employee chooses to leave | Notice period, exit interview to learn why, knowledge handover, references |
| Redundancy | The role is no longer required (restructure, automation, downsizing) | Genuine-redundancy test, redundancy pay scaled by service, consultation (including unions), redeployment first, transition support |
| Dismissal | The employer ends employment for cause (serious or repeated misconduct, or sustained underperformance) | Procedural fairness, documented warnings, valid reason, avoiding unfair-dismissal claims |
Entitlement and transition issues
- Entitlements. Accrued annual leave and long-service leave must be paid out. Redundancy pay is scaled by years of service under the National Employment Standards. Notice periods apply.
- Procedural fairness. Dismissal requires a valid reason, a chance for the employee to respond, and (for performance) documented prior warnings. Getting this wrong exposes the business to unfair-dismissal claims at the Fair Work Commission.
- Transition support. Outplacement services, references, retraining and counselling help departing employees and protect the business's reputation as an employer.
- The remaining workforce. Survivors watch how leavers are treated. Handling termination poorly damages the engagement and trust of the staff who stay.
"A contemporary Australian business is automating a process that makes 200 manual roles redundant. Recommend how the business should manage the training, performance and termination issues. (10 marks)"
Plan. Address redeployment-through-training, fair performance and termination process, and transition support.
Diagnosis. Automation creates a genuine redundancy of the affected roles. The business has obligations under the Fair Work Act 2009 and a strong interest in protecting workforce trust and reputation. Coles's automated distribution-centre rollout (2023-2024) is the real-world template.
Training and redeployment first. Before redundancy, the business should identify redeployment opportunities into new roles (technology operation, maintenance, customer service) and fund the on-the-job and off-the-job training needed to move displaced staff across. Redeployment reduces both the human cost and the redundancy-pay bill.
Performance management. Use management by objectives to set clear goals for staff moving into new roles, with appraisals and observation to support them through the transition. Do not confuse genuine redundancy with dismissal for performance - they are different processes with different obligations.
Termination management for unavoidable redundancies. For roles that cannot be redeployed, run a genuine-redundancy process - consult affected employees and unions, apply redundancy pay scaled by service, give proper notice, and offer voluntary redundancy before involuntary where possible.
Transition support. Provide outplacement services, references, EAP counselling and retraining vouchers. Communicate honestly and early.
Verdict. The combined strategy meets the legal obligations, minimises the number of involuntary redundancies through training-led redeployment, and protects the engagement of the workforce that remains - the people the automated operation still depends on.
- Confusing redundancy and dismissal
- Redundancy is the role disappearing (no employee fault); dismissal is ending employment for cause. They have different processes and entitlements.
- Listing training types without benefits
- Markers want why each helps - on-the-job for low-cost relevant skills, off-the-job for specialist depth and certification.
- Treating performance appraisals as the only performance-management strategy
- The study design names four - MBO, appraisals, self-evaluation, employee observation.
- Forgetting procedural fairness
- Dismissal without a valid reason, warnings and a chance to respond risks an unfair-dismissal claim at the Fair Work Commission.
- Ignoring the remaining workforce
- How a business treats leavers shapes the trust and engagement of the staff who stay.
Examples in context
Example 1. Redundancy done with consultation (Coles automated DCs, 2023-2024). When Coles opened its Ocado-powered automated distribution centres at Kemps Creek (NSW) and Truganina (VIC), manual DC roles became redundant. Coles consulted with the relevant unions, offered voluntary redundancy, and funded retraining and redeployment for staff who could move into the new operations. The process illustrates genuine redundancy handled with the consultation and transition support the Fair Work framework expects.
Example 2. Off-the-job training as a retention tool (knowledge-economy firms). Atlassian and Canva fund external conference attendance, formal qualifications and structured learning budgets. The off-the-job training builds specialist depth and doubles as a motivation and retention strategy - addressing Lawrence and Nohria's drive to learn and Maslow's self-actualisation as well as building capability.
Try this
Q1. Distinguish between on-the-job and off-the-job training. [2 marks]
- Cue. On-the-job is delivered in the workplace while doing the role (low cost, directly relevant); off-the-job is delivered away from the workplace (specialist depth, formal certification, higher cost).
Q2. Identify and explain two performance management strategies. [4 marks]
- Cue. Any two of: management by objectives (joint goal-setting reviewed against targets), performance appraisals (formal periodic review with feedback), self-evaluation (employee assesses own performance), employee observation (manager observes performance in the flow of work).
Q3. Explain the issues a manager must consider when terminating an employee by (a) redundancy and (b) dismissal. [3+3 marks]
- Cue. (a) Genuine-redundancy test, service-scaled redundancy pay, consultation and redeployment first, notice and transition support. (b) Valid reason, procedural fairness, documented warnings for performance, avoiding unfair-dismissal exposure at the Fair Work Commission.
Exam-style questions
Questions in the style of VCAA exam questions on this dot point, each with a worked answer. They are written by ExamExplained unless tagged "Past paper"; the year shows the paper a question is modelled on.
Practice6 marksDistinguish between on-the-job and off-the-job training, and explain a benefit of each to a business.Show worked answer →
A 6-mark answer needs both training types, the distinction, and a benefit of each.
On-the-job training. Training delivered in the workplace while the employee is performing the actual role. Methods include coaching, mentoring, job rotation, shadowing and supervised practice. Cost is lower, the training is directly relevant, and the employee remains productive while learning.
Benefit: directly relevant skills, low cost, immediate productivity. A Bunnings team member learning the point-of-sale system, stock procedures and customer service from a supervisor on the shop floor is being trained on-the-job.
Off-the-job training. Training delivered away from the immediate workplace - external courses, classroom sessions, e-learning, conferences, formal qualifications (TAFE, university). Cost is higher and the employee is away from production, but the training can be deeper, broader and delivered by specialists.
Benefit: access to specialist expertise and broader skills, fewer workplace distractions, formal certification. A NAB employee completing an external compliance qualification or a leadership program is being trained off-the-job.
Markers reward (1) clear definition of both, (2) the distinction (in-workplace v away-from-workplace), (3) a benefit of each, ideally with an example.
Practice6 marksExplain two performance management strategies a business could use, and outline the issues a manager must consider when terminating an employee through redundancy.Show worked answer →
A 6-mark answer needs two performance-management strategies and the redundancy issues.
- Management by objectives (MBO)
- Manager and employee jointly set specific, measurable objectives aligned with business goals, then review performance against them. Links to Locke and Latham's goal-setting theory. Builds commitment through participation.
- Performance appraisals
- A formal, periodic review of an employee's performance against expectations, usually annually or quarterly, with structured feedback and development planning. Other valid strategies: self-evaluation (the employee assesses their own performance) and employee observation (the manager observes performance directly over time).
- Redundancy issues
- Redundancy occurs when a role is no longer required (through restructure, automation or downsizing), not because of employee fault. The manager must consider: genuine redundancy criteria under the Fair Work Act 2009, redundancy-pay entitlements (scaled by years of service under the National Employment Standards), consultation obligations (including with unions where an enterprise agreement applies), redeployment options before redundancy, notice periods, and the wellbeing and transition support (outplacement, references) for affected staff.
Markers reward (1) two distinct performance-management strategies defined, (2) the genuine-redundancy and entitlement issues, (3) recognition of consultation and transition obligations.