Managing underperformance in the workplace can be challenging and even uncomfortable to address. Often these issues may have been occurring for some time, or the business has not had the time or resources to address these confidently. However, underperformance can have a significant impact on your workplace including impacting productivity, turnover and staff morale, so it is important for employers to invest in robust processes to work through these issues and understand their obligations when it comes to dealing with these matters. By equipping yourself with the knowledge and resources to effectively manage underperformance, this will enable you to better support your employees through the process, facilitate more productive conversations with your staff and effectively manage any potential risks that can arise when addressing these issues.
Underperformance is where an employee isn’t doing their job to the required standards or is failing to meet the outcomes of their role (such as failing to meet the KPI’s as set out in their role). This is sometimes mistaken for misconduct, which is when an employee is behaving in an unacceptable manner (such as breaching a workplace policy). However, these are two separate issues which generally are dealt with slightly differently. How underperformance is managed and ensuring this is appropriately handled is especially important in helping the business mitigate the risk of any possible claims that can arise, such as an Unfair Dismissal or General Protections claim. To effectively manage these risks, generally the business will need to provide for a procedurally fair process considering the severity of the performance issues, the employees length of service and any previous performance management. These considerations are vital in ensuring that the business can be confident in demonstrating that the employee was informed of the issues and given ample opportunity and support to improve their performance.
What does effective management of underperformance look like?
Before resorting to formal processes, we would recommend to first discuss the issues with the employee through informal counselling. Often an employee is unaware they may not be producing the results required in their role, or perhaps there are deeper issues that may be contributing to their poor performance (for example lack of training or employee engagement). Informal counselling is generally appropriate as a first measure for less serious matters, where the issue has only recently arisen or where this has not been raised with the employee previously, and is a good way to ‘nip it in the bud’. Informal strategies may include;
- Having an informal meeting with the employee to discuss the performance concerns (as well as other matters);
- Providing feedback that is constructive and informally monitoring performance over the course of a few weeks to assess whether there have been improvements
- Identifying any potential gaps in knowledge and offering support in the form of training sessions, shadowing opportunities or coaching.
When it comes to managing underperformance, we encourage open communication with your employees and recommend approaching such matters with empathy, understanding and actively listening to what your employee may be able to contribute as to why the performance issues are occurring or what support they need to effectively perform their role. If it is established that performance hasn’t improved following the informal consultation, then it may be time to consider taking more formal action. Below we detail our best practice approach for formally managing an employees performance:
1. Invite the employee to a formal performance review meeting
To ensure a procedurally fair process is followed, the employee should ideally be provided with at least 24-48 hour’s written notice to attend a formal performance review meeting. It is typically best practice to offer for the employee to bring a support person should they need and they should be informed of this within the invite letter. The letter should also clearly stipulate what will be addressed in the meeting and we recommend being clear with the examples provided – including dates, times and details of the issues to be discussed.
These types of discussions can obviously be quite sensitive for the employee, so it it’s important to ensure it takes place in a private area where the discussion won’t be overheard or interrupted by others. As an employer, you should also consider having another senior employee or appropriate manager attend the meeting for the purposes of being a witness and note-taker.
2. During the meeting
When meeting with the employee, we recommend not only explaining the purpose of the meeting but also reassuring the employee that the business aims to reasonably support the employee with succeeding in their role and is committed to working with the employee to get their performance back on track. You should also provide examples of where the employee’s performance has fallen short and consult with the employee on how their performance needs to be improved and what targets are going to be realistic for them to achieve. Allow the employee an opportunity to respond and raise any points for consideration regarding the issues.
Importantly, no decision on an outcome should be communicated within the meeting. The purpose of this meeting is to discuss the issues in detail with the employee and gain a further understanding to help inform the business’ judgement on what might be an appropriate outcome (i.e. written warning, performance improvement plan etc.). After discussing the performance issues and allowing the employee a time to respond, the business should conclude the meeting and review the information to decide what may be an appropriate way forward.
3. After the meeting
Consider the employees input and finalise the decision on what is an appropriate outcome. There is no set outcome for every performance issue, as this depends on the exact situation at hand. However, generally outcomes to an initial performance review meeting may include a verbal warning, a formal written warning for the employee to improve their performance and/or managing the issue on a formal performance improvement plan (‘PIP’).
A PIP is one of the most common methods in managing performance issues formally. The PIP should set realistic and measurable objectives for the employee to achieve, and run anywhere from approximately 4-8 weeks, however, it is up to the business to decide what timeframe is reasonable.
This plan should also include details about additional training or support that will be provided to assist the employee with improving their performance. Typically, it is best practice that the business seeks the employees input into the PIP design to ensure the outcomes are reasonable and whether there may be any other suggestions to include. Furthermore, it important that this makes clear possible further outcomes when the PIP ceases and where the employee has not been successful in meeting the requirements, such as further disciplinary action up to and/or including termination of employment.
During the course of the PIP, it is recommended to check in with the employee frequently, e.g. on a weekly or fortnightly basis. During these meetings, the business should track and discuss how the employee is progressing against the PIP outcomes. It is important to document these discussions within the PIP – including any feedback provided or additional training that was discussed.
Following the conclusion of the PIP, the business should set up a formal meeting with the employee to discuss its outcome and whether they have met the requirements of the plan. If the employee has failed to meet the requirements of the PIP, then this meeting can be set up as a formal disciplinary meeting, in which it is best practice to follow a procedurally fair process. The result of the formal disciplinary meeting may be a formal warning for example, and there may be consideration to further extend the PIP or it may be appropriate for the business to consider more severe outcomes such as termination of employment depending on the issue. However, if the employee has successfully met the requirements of the PIP then a formal letter should be provided to confirm conclusion of the PIP.
Underperformance can have serious flow on effects to the wider organisation and can therefore cost your business more in the long term if these issues are not managed, hence the importance of effective management. By approaching these discussions with genuine empathy and support, you will provide employees with the best chance of succeeding and even building long-term, rewarding careers with the business. If you need further guidance on managing underperformance issues within your business, reach out the HR Connect team today to learn more about how we can assist!
About HR Connect
HR Connect is one of Australia’s leading providers of HR and workplace safety advice service, designed to help small business owners make confident and compliant business decisions.
The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact HR Connect for advice.