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Best-practice tips for addressing employee performance issues

An under-performing employee can present significant management challenges, but timely and effective intervention is the key to getting things back on track

Employee under-performance can happen for many reasons and can impact your entire organisation if not effectively managed. It’s critical to:

  • Protect your staff
  • Maintain productivity
  • Avoid legal problems

These things require careful handling, so it’s a good idea to learn more about addressing employee performance issues. Here are our best-practice tips.

What are employee performance issues?

In an employment relationship, fundamental duties include:

  • Employees must perform their duties to the best of their abilities and without negligence
  • Employers must ensure employees are capable of performing their duties
  • Employers must take reasonable steps to manage any employee performance issues

Performance issues are often called “under-performance” or “poor performance.” These days, “under-performance” is the preferred term because it has a broader meaning. It implies an understanding that performance issues may be beyond the employee’s control.

Under-performance issues can arise for many reasons, including that the employee:

  • Doesn’t have the appropriate skills or training
  • Doesn’t understand the employer’s expectations
  • Doesn’t like the job or is bored
  • Doesn’t fit in with the team
  • Is unwilling or unable to work within the employer’s systems
  • Is stressed
  • Is struggling with personal issues

Performance issues typically arise as:

  • Poor work quality
  • Failure to meet deadlines
  • Poor communication
  • Frequent or increasing lateness or absences
  • Unprofessional conduct

When should employee performance issues be addressed?

Performance issues not only affect the under-performing employee. The workplace culture and the morale of your entire staff are at risk. Productivity and safety may also be compromised. So it’s important to address employee under-performance as soon as possible.

What should I do when I become aware of an employee performance issue?

Collect as much information as possible when you first become aware of the issue. There may be documents, data, CCTV footage, photographs, emails or other evidence that may be useful in helping you work out what’s going on.

Remember that at this stage, you’re aiming to discover why there’s an issue. You’re not looking for evidence of wrongdoing or reasons to terminate employment. Instead, a performance issue may be a sign of other problems. For example, the employee may be experiencing a personal health issue, so you must remain objective.

At this stage, you should also check and comply with relevant workplace policies, including any policies that set out procedures for managing employee performance issues. Also, check the employee’s duties, which may be included in their employment contract or position description.

Once you’ve completed your research, you’ll need to speak to the employee. You may need to investigate further, so it’s critical to bear in mind these fundamentals:

  • Make all reasonable attempts to manage the performance issue
  • Conduct a thorough and fair investigation

What are the employee’s rights?

Once you’ve decided to speak to the employee about the performance issue, you must give them:

  • Notice of the meeting
  • Details of the issue
  • The ability to prepare a response

This information should be given to the employee in writing, for example by letter or email.

We recommend giving them at least 24 hours’ notice. However, if you feel this would create safety issues or there are other reasons why you need to act more urgently, contact us to discuss how to approach this.

Should I take disciplinary action?

Taking disciplinary action, such as a warning, is a significant step and must be done with caution. Sometimes, a warning can damage the employment relationship or the employee’s relationship with other staff. So you need to ensure there aren’t other options that are available or more appropriate, for example, further training or time off to deal with personal issues.

Also, ensure you’ve given the employee plenty of opportunities to improve. For example, issuing a warning after the first meeting may indicate that you’ve decided on the issue before giving the employee a fair chance.

Before taking action, make sure you have:

If a written warning is necessary, we can draft it for you.

What are the legal considerations when addressing employee performance issues?

To reduce the risk of successful legal action against your organisation, you must be able to show that:

  1. The requirements for improvement were clear
  2. You attempted to assist the employee in improving their performance
  3. The employee had written notice of the possibility of termination
  4. You acted fairly and reasonably

Poor performance isn’t serious misconduct
unless the situation escalates. Serious misconduct means the employee has done something that makes it impossible for the employment relationship to continue. Then, you can dismiss the employee without notice. Examples include theft, fraud, or dangerous behaviour.

Performance issues require management and good communication
. If written warnings are necessary, the number of warnings depends on the circumstances. It doesn’t always have to be three warnings, but the employee should have written notice that termination is possible if the issues continue.

There can be many variables, and it can be challenging to gauge what’s causing the problems, especially if there’s limited evidence.

For example:

  • Is the employee failing to understand their obligations, or is an equipment or software issue causing them to act slowly?
  • If the employee is falling short of their sales targets, is it because they’re not working hard enough or because their market is unreasonably difficult?
  • Are the expectations reasonable, or should the national financial climate be considered when setting sales targets?
  • Should the employee have further training, or has the company already invested in ongoing and extensive training without success?

We recommend you seek our guidance before deciding on disciplinary action.

What other things should I consider?

When you’re managing a performance issue, you may also need to consider whether:

  • Workplace policies need updating
  • Employees would benefit from extra training
  • A performance management system is needed
  • Any workplace-specific language is confusing and needs reviewing (for example, abbreviations and acronyms)

And finally

Addressing employee performance issues requires care and skill to ensure:

  • The employee’s best interests are preserved
  • Staff aren’t negatively affected
  • The company can thrive

A thorough and well-documented investigation is critical, as is a collaborative approach to help the employee back to peak performance.

Learn more about how we can help you address employee performance issues.

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