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Performance managing employees is an important but complex and time consuming process.  The risks to employers can be significant.  There are a number of steps which employers can take to minimise the risks associated with performance management, issuing warnings and terminating an employee.

Performance Management – Underperforming Employees

Underperformance occurs when an employee is not doing their job properly or is behaving in an unacceptable manner at work.  It includes not carrying out work to the standard required or not doing their designated job at all.

To manage underperformance, employers can:

  • list behavioural and outcome expectations in position descriptions;
  • address any issues of underperformance with the employee as soon as possible;
  • conduct regular performance reviews to outline and discuss expectations;
  • encourage the employee to discuss any issues they are having with performing their role.

HR Tip: Use the HR tools available in your BetterHR subscription to help manage these tasks.

When an employee is underperforming, the employer and employee should meet to discuss the situation. The employee should be given written notice of the meeting including sufficient notice of the meeting and details of what the meeting is about.

It is best practice to provide the employee with an opportunity to bring a support person to the meeting. Whether the employer made it clear to the employee that they could have a support person present at a performance related meeting is something the Fair Work Commission will consider if the employee is terminated and lodges a claim for unfair dismissal against the employer. Any refusal by an employer to allow the employee to have a support person at the meeting will be viewed unfavourably by the Commission.

Formalise discussions during performance management or appraisal meetings

At a performance related meeting, the employer should:

  • be clear about the issues or concerns that the employer has with the employee;
  • listen to the employee, invite the employee to make comments and take the employee’s comments into consideration;
  • make sure both the employer and the employee discuss the situation and agree on a solution together including reasonable steps for improvement and the timeframe for improvement;
  • document the meeting and the agreed outcomes;
  • provide a written summary of the meeting and any agreed outcomes to the employee as soon as practicable after the meeting.

Once the employee understands the required standard, regular follow up meetings should be scheduled and held. Follow up meetings provide both the employer and the employee with an opportunity to discuss progress and ongoing improvement.  If the standard required of the employee is not met within the agreed timeframe, the employer should tell the employee and if necessary, issue a warning to the employee.

HR Tip: Consider using a BetterHR Virtual HR Representative at meetings where you and your employees could benefit from HR and employment law advice and guidance.

Providing written warnings 

There is no legal requirement to provide an employee with a written warning before terminating their employment. However, it is best practice to issue at least one written warning. Similarly, an employee should be given a chance to improve their performance before their employment is terminated for underperformance. It is also important to give an employee the opportunity to ‘show cause why they should not be terminated’ before you take action. These are factors which the Fair Work Commission will take into consideration if the employee is dismissed and a claim for unfair dismissal is made against the employer.

If an employer provides an employee with a written warning about the employee’s performance, the warning should:

  • state the reason for the warning;
  • provide sufficient details about why the warning is being given;
  • set clear expectations about what needs to be done differently by the employee and in what timeframe;
  • clearly state that if the standard of performance does not improve within a specified time, further disciplinary action will be taken by the employer against the employee which may include termination of employment;
  • be fair and reasonable in the circumstances.

Employers should ensure that their performance management processes comply with best practice requirements.  This is necessary to minimise the risk of a claim for unfair dismissal or adverse action.

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