Background: Supporting and retaining older workers has become a strategic management goal for companies, considering the ageing of the workforce and the prolongation of working lives. The relationship between health and work is especially crucial for older workers with manual tasks, considering the impact of long-standing health impairments in older age. Although different studies investigated the relationship between work ability and job performance, few studies have analysed the impact of workers’ capability to balance between health and work demands, including managerial and organisational support (work-health balance). Considering health as a dynamic balance between work and health demands influenced by both individual and environmental factors, we assess the mediator role of work-health balance in the relation between work ability and job performance, both self-reported and assessed by the supervisor. Methods: The study utilises data from a case study of 156 manual workers, who were 50 years old or older and employed in a steel company in Italy. Data were collected inside the company as an organiational initiative to support age diversity. Results: The findings show that work-health balance partially mediates the relationship between work ability and self-rated job performance, while it does not mediate the relationship with job performance as rated by the supervisor. Supervisor-rated job performance is positively associated with work ability, while it decreases with the increasing perceived incompatibility between work and health. Conclusion: A perceived balance between health and work is a strategic factor in increasing manual older workers’ job performance. For older workers, not only the perceived capability to work is important but also the organisational health climate and supervisor’s support. More studies are needed to verify if managers overlook the importance of health climate and support, as strategic elements that can foster performance for older employees.