As a manager or a business owner/operator we need to deal with this problem by managing poor performance the right way. We have all worked with people that just don’t perform. Whether it is inappropriate behaviour, complete disregard for professional standards or they’re just not up to the job. Whatever the reason, when it comes to business it can be septic.
Performance management requires us to strike a balance between compassion for the employee and their development and accountability to the business.
Being able to assess situations and adapt our management response is vital to managing our team. If we manage people well, we manage performance well too.
As a business owner myself, I believe that everyone has the potential to be a great performer if they are doing something they have talent and passion in.
First and foremost, the focus needs to be on helping employees to find positive solutions rather than focusing on blame and criticism. This is not merely a nice way to view things, it is the law; managing underperformance in business is based on legislative framework specified in the Fair Work Act 2009.
To this end performance management is about people not systems or processes (these are merely there to facilitate). What people need from managers is a clear understanding of what is expected, in other words, clarification and agreement of performance expectations and where necessary training, specific coaching or additional support may be in order. You have already invested in your employees, so choose to seek a positive outcome and a return on that investment.
There is of course an exception to every rule and as a business, it is inevitable that you will come across people that just don’t want to play (no matter how many different ways you throw them the ball). And when one or more of your team members is not performing, it impacts everyone.
In our experience, the tell-tale signs of a serious problem are not hard to pick. It’s usually one of the following:
- the business is experiencing a high staff turnover
- staff grievances and complaints increase
- staff morale seems low
- management are spending an increasing amount of time dealing with staff issues
- absenteeism increases
- productivity is decreasing
- workplace incidents and/or accidents are on the rise.
If you find yourself and the business trying to manage your way through this situation, then the following course of action for managing poor performance is the only HR advice worth following.
Step by Step Process for Managing Poor Performance
Step 1: Informal Performance Discussion
Remember the assessment of an employee’s performance must be relative to their agreed position description.
If you skipped the ‘position description document’ (at time of employment), then you have no way of proving that their behaviour and/or work is not up to scratch.
If, and when you can prove underperformance, then the manager/supervisor should have an informal performance discussion.
The informal discussion should be used to:
- identify the cause of the problem
- give the employee an opportunity to respond to the issues raised and
- assist the employee in identifying ways to improve performance and or modify their behaviour.
The employee should then be given parameters (in particular reasonable time) to demonstrate performance improvements or modification to their behaviour.
Managers must document and date all performance discussions. The documentation should be a summary of the identified issues, the employee’s response and the agreed actions.
Please click here for a sample “Performance File Notes Template”, designed to assist your with your discussion and notes collation. You may also wish to follow the “Performance Counselling Checklist”.
The number of informal discussions you have prior to a formal performance discussion of managing poor performance is not set in stone, rather it will depend on the impact they are having on productivity or the morale of others.
Step 2: Request for a Formal Performance Discussion
If a decline in performance or undesirable behaviour continues, or if the performance improvements are not sustained, it may be necessary to hold a first formal performance discussion.
Before holding this discussion, the employee must first be notified in writing and given the opportunity to arrange representation (a friend, relative, coworker etc.) and/or seek professional advice prior to the meeting.
Please click here for a sample “Request for Formal Discussion Letter” specifying what to write in a letter requesting a formal performance discussion.
Step 3: Formal Performance Discussion
The formal performance discussion will follow a similar format to the informal version. We do however recommend that there are always two managers (or equivalent).
This discussion should be used to:
- explain that this is a formal performance discussion and the process adopted by the organisation is fair and consistent
- articulate to the employee the deficiency in their performance, including the provision to the employee of specific examples of where performance or behaviour has not met expectations
- articulate clearly to the employee, performance expectations with reference to their position description/ performance plan
- summarise the support that has been provided to date to assist the employee in this position and
- identify the cause of the problem, by giving the employee an opportunity to respond to the issues raised.
It is imperative that you encourage the employee to talk and provide an explanation as to their ongoing behaviour when managing poor performance. If you consider their response unreasonable given the level of support, coaching and additional training you have provided, then you are entitled to issue a formal warning.
Regardless, your next step is to assist the employee in identifying ways to improve performance and/or modify their behaviour. This may include more training, specific coaching or additional support. Depending on the reasons given for below standard performance/undesirable behaviour the manager may need to modify the employee’s Performance Plan. The modified Performance Plan must contain specific performance criteria consistent with the employee’s role and job requirements. Managers should ensure that the criteria are measurable, achievable, and realistic in context of the business and set for an agreed time frame.
A summary of the discussion must be documented and signed by both the manager and employee. The documentation, known as a ‘performance file note’ should summarise the identified performance and/or behavioural issues, the employee’s responses to these issues, the agreed actions including timeframes and a date for the next review.
Once again the employee should be given reasonable time to demonstrate their performance improvements/modification to their behaviour. In addition they must be provided with appropriate and regular performance feedback up until the agreed review date.
Step 4: Request for a Second Formal Performance Discussion
If improvement in performance is not demonstrated to the level expected or not sustained, it may be necessary to conduct a further formal performance discussion.
The process for the second formal performance discussion when managing poor performance will be exactly the same as for the first, except that:
- When the discussion commences the employee must be advised that this is the second formal performance discussion.
- If after hearing the employee’s reasons for lack of improvement and a warning is determined to be necessary, where applicable the manager should advise that this a second formal warning.
- The employee should also be advised that if performance does not improve or behaviour is not modified by the review date, a third formal performance discussion will be held, and depending on reasons for lack of improvement, termination of employment may result.
Step 5: Request for a Third and Final Formal Performance Discussion
If at the agreed review date, following the second formal performance discussion, improvements still have not been demonstrated, a third and final formal performance discussion may be required. Depending on the reasons given during this discussion for the continuing below standard performance/undesirable behaviour, termination of employment may result.
This discussion should follow a similar process to those outlined above. That is, in summary the discussion should be used to:
- Advise the employee that this is the third formal performance discussion in writing.
- Articulate to the employee the continuing deficiency in their performance, including the provision to the employee of specific examples of where performance or behaviour has not met expectations.
- Summarise the support that has been provided to date to assist the employee.
Articulate clearly to the employee an opportunity to respond to the issues raised in relation to managing poor performance.
If the employee’s explanation is not considered reasonable a third and final formal warning should be provided, giving a further 24 hours for the employee to indicate why termination of employment should not occur.
Set a time for a follow up meeting the following day.
A summary of discussion should be documented and both the manager and employee should sign the documentation at the outset of the follow up meeting.
Step 6: Follow-up meeting (24 hours later)
The focus of the follow-up meeting is to give employees the opportunity to respond and cite reasons for their continuing underperformance. If this response is not deemed reasonable the Manager should prepare a letter of termination, giving notice, advise the employee of his or her termination in accordance with the termination clause in their Employment Contracts, National Employment Standards (NES) or the relevant Award.