Managing Employee Underperformance

When a person is underperforming at work, their employer may have to make the uncomfortable decision to manage the worker more closely to help point out areas for improvement and how regain a high standard of work. Although businesses never want to have to manage underperforming staff, the reality is that from time to time they will need to in order to avoid bringing down morale, losing revenue or suffering the serious consequences of employee negligence. Here are the best ways to manage employee underperformance.

Remember why you are managing the employee

Managing an underperforming employee is not personal. It is a means to an end before the underperformance manifests into a bigger issue which can affect the safety and well-being of other workers or clients.

The overarching goal of this exercise is to improve the employee’s performance, not set them up to fail. To do this successfully, provide the employee with a fair and even process which helps them come to their own realisations about how they are underperforming and why their conduct has a flow-on effect. Poor performance affects the broader team, so helping the employee realise their purpose and place in the team should increase their awareness about their role’s importance. At no time should you make the employee feel that the performance management is because of them personally.

Support the process with improvement indicators and evidence

Performance management is not a mandated process under Australian employment law, and human resources managers should be careful to take an unbiased view throughout the process, particularly if it results in termination.

The performance management process should be bolstered by a timeline and milestones which the underperforming employee is required to meet, and documented by the manager thoroughly and in writing, in case the employee’s performance does not improve and a subsequent dismissal gives rise to a claim with the Fair Work Commission.

Don’t forget the rights of casual staff

The rights of casual staff members are often overlooked due to a common misconception that casual staff can be terminated immediately, with very little reason as to why they are being dismissed. This is untrue and casual staff should be managed in the same professional and respectful manner as any full- or part-time staff member.

Casual workers who work regularly or have accepted regular shifts for more than a six-month period (or a 12-month period for businesses which have less than 15 employees) may be entitled to similar unfair dismissal rights as permanent employees. They should, therefore, be afforded the same performance management process as their permanent peers.

Prevent an unfair dismissal claim

Any dismissed employee is able to lodge an application with the Fair Work Commission and employers are obligated to respond to all applications made against them. Although this can be time-consuming, if a worker is dismissed but was given a valid reason for the dismissal and afforded a fair performance management process with adequate warnings and provisions to improve their performance, it will be difficult for them to successfully claim that an unfair dismissal occurred. That is why it is important to provide the worker with transparency about how they must improve and allow them opportunities to lift their game.

If an employee must be dismissed for failing to improve their performance even after receiving adequate warnings and opportunities to improve, the employer may choose to prevent any claim for unfair dismissal by offering the employee a sum of money in return for their agreement that they will not bring a claim.

If you need advice on best practices for managing employee underperformance, our experienced HR consultants can help you carry out the process fairly and thoroughly.