In certain situations, letting go of underperforming employees can be difficult, particularly when you have bent over backwards trying to help them correct poor conduct or performance. However, there comes a time when it is obvious the employment relationship is no longer viable, especially when the employee’s attitude indicates they have no desire to improve.
In a recent case before the FWC, it was found that there can be exceptions to the usual requirement to follow a formal performance management process when dealing with underperforming staff. Ongoing informal approaches may be utilised, but it must be shown that the employer made continued efforts to communicate the worker’s performance shortfalls and provided assistance in achieving expectations. In this case, the employee was dismissed after his employer dedicated 10 months to daily coaching, training and support as part of an informal performance management process. According to his supervisor, the employee received far more one-on-one time than any other employee. During these discussions the employee nodded his head to signal he understood what was required of him, yet never asked questions or sought clarification.
His employer’s main concerns were that the employee lacked the necessary skills for the job, was incapable of building and maintaining working relationships with both colleagues and customers and was unable to prioritise duties or comply with process. Despite the employer’s best efforts, improvement was never achieved.
The employee was subsequently placed on a formal performance improvement plan (PIP). The employee claimed, despite being told on numerous occasions over the previous 12 months, that he was unaware of any of his performance related problems and stated he was unwilling to participate in the PIP. As a result, management made the final decision that the employment relationship was no longer viable, which lead to his dismissal.
Despite the outcome for the employee in this instance, informal performance methods can be extremely effective in keeping staff motivated, engaged and to help steer declining performance back on track.
Having said that, significant and ongoing performance related issues are best addressed through formal methods, such as through performance reviews, additional training, meetings for breaching performance related policies, PIP’s and written warnings. When formal performance management methods are documented, they become an employer’s greatest evidentiary tool in defending employee claims.
Lessons for employers
- Employers must be able to differentiate between circumstances that warrant informal performance management methods as opposed to formal methods.
- When formal methods are adopted, ensure proper process is followed and well documented.
- Ensure performance deficiencies are addressed as soon as possible. Don’t wait until the problem escalates beyond repair.
- Afford your employees a reasonable timeframe to improve their performance.
In a recent case, the FWC ruled that an employee who received 10 months of informal performance management was not unfairly dismissed. However, the commission reiterated that employers must clearly communicate performance expectations and provide assistance in achieving performance-related goals.
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