Performance management in the workplace
The first question in a performance management issue is what constitutes poor performance?
Often an employer will know when an employee is not performing their role properly, but before addressing the issue, he or she needs to:
- Clearly describe the problem;
- Identify the specific task or tasks that are not being performed correctly;
- Check that the employee has been told how to perform the task or tasks;
- Consider whether the employee may simply need additional training; and
- Assess whether the standard expected is objectively reasonable.
The employer must be able to clearly articulate to the employee what the problem is, what the expectations are, and how the employee is expected to address the issue. In order to be able to have a conversation with the employee about these matters, the employer must first understand themselves what they are seeking.
This is a form of gap analysis. What is happening at the moment? What does ‘good performance’ look like? What’s the gap and how does the employee bridge it?
When should poor performance be addressed?
Ideally, poor performance is addressed as soon as practicable after it is noticed. This gives the employee the opportunity to have fresh in their mind what they have done, which means they have a better chance of understanding when the employer describes the problem, and therefore identify opportunities to change.
In fact, if the employer lets poor performance slide for a long period of time, possibly because he or she isn’t really confident addressing the employee directly about the problems, then it could be argued that the standard that is accepted is the reasonable standard that could be expected in the workplace. Commencing a process for correcting poor performance needs to be a priority to allow the process the best possible opportunity to be successful.
How to address underperformance – the process
- Have an informal discussion with the employee, giving specific examples of behaviours or outcomes that you want the employee to change. Keeping it informal reduces the apprehension any employee would reasonably feel being told that they’re not meeting expectations. However, do keep notes of what you discussed, and importantly, any actions that you or the employee are going to take.
- If performance does not improve, or still does not meet the reasonable expected standard, then it may be necessary to move to a formal process, a Performance Improvement Plan (PIP). This starts with another discussion with the employee and finishes with documented and agreed outcomes. See the sample PIP entry at the bottom of this page.
- If the employee fails to meet the specified standard within a reasonable period of time, then a written warning may be warranted. A ‘reasonable period of time’ will depend on what you’re asking the employee to do. In the below example, greeting customers properly is a behaviour that can be improved immediately, so a review period of a week or two would be appropriate. If the PIP relates to a salesperson achieving budget, a review period might need to be a quarter, or at least, a month.
If an employee makes an unfair dismissal claim, the Fair Work Commission will want to see evidence that the employee was clearly told what they need to do, and that termination of their employment would follow if they don’t follow those instructions.
You are not required to give three warnings. Sometimes one warning will be sufficient, but often two (a first warning and a final warning) will be called for.
- If, after an appropriate number of warnings and PIPs, the employee is still failing to meet your reasonable standards, then termination of employment is the next step.
Employee responses to performance management
Ideally, the employee and the employer have a reasonable conversation about expectations, agree on actions, and the employee improves. This is the whole point of the process – to gently steer the employee in the right direction. It doesn’t need to be confrontational, it shouldn’t make the employee feel scared or stressed.
Sometimes, however, an employee does not respond positively to the process. This can result in misconduct, which would be managed as a separate process, potentially leading to dismissal.
Performance management is uncomfortable for both the employer and the employee, and it does result in some additional pressure being put on the employee to meet expectations. This can result in the employee getting sick, which automatically means the performance management process must cease until the employee is fit to return to full duties.
If the employee makes a workers compensation claim alleging that they are stressed, the insurer is likely to investigate the claim. If the performance management process is objectively judged to be reasonable management action, conducted in a reasonable manner, then the probability is that the claim will be rejected.
Employers need to seek advice on specific situations as they arise, as careful management is necessary to ensure the outcome is as positive as possible for all involved.
Emma Watt is an independent industrial relations consultant who has, for more than 20 years, provided advice and assistance to employers in the timber industry. She has also worked as an unfair dismissal conciliator with the Fair Work Commission. Emma is very keen to ensure that employers know their rights and obligations, so they can sleep well at night!