While addressing poor performance can be a difficult task, it pays to respond quickly and appropriately. Taking swift action can save you a big headache — and perhaps even a legal claim — in the long run.
But the action you take must always be correct. There are three key things you should not do when managing an underperforming employee:
1. Don’t procrastinate
Failing to address underperformance in a timely manner can allow an employee’s poor performance problem to become much worse than it needs to be.
It is also very hard to defend an unfair dismissal claim if you failed to manage underperformance when it arose.
Deal with performance issues incrementally. Listen to the employee. Let them know your concerns. By getting these things out in the open early, you have a much better chance of resolving the issue.
2. Don’t make assumptions
There are many reasons for poor performance, so don’t assume the employee cannot improve. For example, an employee could be underperforming due to personal issues, conflict in the team, or disliking their role.
3. Don’t be negative
When discussing performance issues, it’s important to support the employee. After all, you are trying to help them improve.
Be honest and direct, but try not to damage their self-esteem with endless details about every task they have failed to perform adequately. Doing this will only get the employee offside.
For a positive, productive conversation:
- ask open questions to find out why the employee is not performing;
- ask them what they need from you. e.g. extra training or resources; and
- listen carefully to what the employee has to say and respond appropriately. If, for example, they are being negative and making excuses, provide them with specific examples about why their performance is inadequate and what they need to do to improve.
You can use open questions to determine whether an employee is unmotivated, or requires training or resources.
By being open, honest and direct, you will allow the employee to reflect on why they are not performing and to understand the consequences.
4 things you should do
To effectively manage poor performance, you should do the following;
1. Document the issue
Documenting evidence of performance issues and related discussions with employees provides an objective and logical recording of the poor performance, which can benefit you by:
- reducing any confusion of who said what down the track; and
- giving you a better chance of defending unfair dismissal claims.
2. Develop policies and procedures
Not having a policy to deal with underperformance can make the process more complicated and expose your business to legal risk.
Develop policies and procedures that provide guidance on fair and clear ways your business will handle poor performance and dismissal. The policies need to provide for:
- clear rules and steps for managers to follow; and
- adequate time for employees to improve.
You may want to set out such procedures in your code of conduct or a performance management policy.
3. Be consistent
Handle every case of underperformance consistently by following the relevant policies and procedures.
If the implementation of your policy is inconsistent, there is a risk that an employee dismissed for breaching that policy could successfully claim they were unfairly dismissed.
4. Follow a fair procedure
There are times when an employee’s performance does not improve, despite any support, training, coaching and goal setting you may give them.
In these situations, implement a formal performance management process that sets out how and when the employee must improve.
Doing this will:
- help to resolve issues in a timely manner;
- help you to treat employees fairly and provide them with every opportunity to improve; and be a point of reference for documented evidence should an employee make a legal claim if they are dismissed.
Although there is no legal requirement to provide a certain number of warnings during a formal performance management process, it’s generally a good idea to provide three warnings before dismissing an employee.
These will normally include:
- An informal verbal warning.
- A written warning setting out the consequences of failing to improve.
- A final written warning advising that a failure to improve will result in dismissal.