A comprehensive and in-time performance management is crucial for businesses dealing with under performing employees irrespective of the size of business.
Performance management is good when you have an employee who would clearly benefit from some guidance and management. However, is it really that important where the employee’s under-performance has been ongoing and is unlikely to improve?
In today’s competitive environment an employer can’t afford to ‘carry’ any worker, especially those workers whose under-performance is dragging down the performance of other staff and the office morale, or is even affecting the business of clients.
The aim of Performance management may or may not a predefined improvement at required level, but the process itself and merely firing the under-performing employee is risky and can result into various employee claims.
As per Fair Work Commission (FWC) statistics the majority of the claimants are individuals unhappy with the termination of their employment.
In most of the cases, the worker claims that their dismissal was illegal, unethical and unreasonable as they weren’t given an opportunity to respond or improve their performance and/or conduct. In such situation, a decision not to undertake performance management can be dangerous to defending this type of claim.
By and large, the Fair Works Commission has found that an employer should have dealt with performance issues more adequately through a well-designed performance management before proceeding to dismissal.
After studying many decisions of the FWC, one can conclude easily that even if there may be genuine performance or conduct issues, the FWC will likely to go against an employer if the employee has not first been given an opportunity to improve through performance management. On the contrary it is less likely for an employee to seek compensation when they have been shown clearly through an objective performance management process that there was a genuine reason and it was nothing personal.
Employer may make some cost savings by not investing any further time and resources into an under-performing employee but the hassle of finding a replacement worker, training the new employee, and these associated costs and resources may ultimately nullify those savings. On the other hand defending any claim of unfair dismissal has its own cost much more in the long run.
An under-performing employee may still be able to make a valuable contribution through their understanding of the business and skills that can still be utilized, albeit with some necessary guidance.
There is no hard and fast rule or a set minimum period for a performance management process unless it is mentioned black and white in a policy or contract.
The process of managing an employee’s performance needs to be determined on a case-by-case basis. It will depend on factors such as the degree of under-performance, the nature of the required level of skills or performance, the extent to which the under performance is impacting others, including staff and clients, and whether the employee has already been made informally aware of their performance issues.
If performance management hasn’t worked or you don’t consider it appropriate in your situation and you believe dismissing the employee is your best option, avoiding a claim of unfair dismissal should be your next step.
We at Societe Alliance guide you through what you must consider before dismissing an employee and how you can protect yourself from legal risk. We can help in the matters like:
What makes dismissal unlawful;
When and how you can lawfully dismiss an employee;
How your policies and procedures can help you to manage dismissal in your workplace;
The alternatives to dismissal;
and your notice and termination pay requirements.
Before you decide to dismiss an employee, it’s critical you understand the rules. Our customised consultancy service will make sure you avoid any legal risk and that your dismissal process is lawful and fair.