As Lady Gaga might have said about a valued person in one of her songs, sometimes they give you a million reasons to let them go. The same could be said about staff. They haven’t done anything wrong, and they’re actually a really nice person, but they just can’t quite get the job done right. Enter performance management.
We get a lot of calls from employers saying that they have someone who isn’t performing and they want a deed of release to get rid of them because “performance management is too hard”, they don’t have time to give someone three written warnings; or they don’t know how to, or are uncomfortable about performance managing someone.
Is performance management the right answer?
There are certainly times when a quick exit is the right solution. If someone is really toxic or a square peg in a round hole or they actually aren’t qualified or experienced enough to do the role, then you may wish to explore quick options – whether that’s the person leaving the role or leaving the organisation. There are certainly legal risks with those approaches, but sometimes those risks are worth it compared to leaving that person in that role. However, it becomes problematic when an employer pays poor performers (which everyone knows about, and has probably carried for a while) to leave. There are significant effects on morale and engagement if it is seen that a poor performer is being rewarded.
Performance management is about working with an employee to improve their performance. The intent is to assist them to lift their performance, fulfil their role and stay with the organisation. If performance management doesn’t work, and it leads to warnings and eventually termination, this is a consequence, but it is not the intent.
This is a very important mindset to performance management, and also why it is very different to the mindset in dealing with disciplinary matters, where termination may be one intent. In disciplinary matters, there is conduct or behaviour that is in breach of policy or procedures or codes of conduct and the intent is for a negative consequence as a result of that breach.
How do you performance manage someone?
Assuming you have decided someone needs to be formally performance managed, how do you start? It is assumed here that an employer has already tried informal performance management or coaching (see our We don’t talk about Bruno blog) but this has not resulted in an improvement in performance.
Firstly, do you have a clear job description or job duties? This may be attached to a contract of employment or enterprise agreement or in an employee handbook or manual. It may be the job description used to recruit the employee in the first place. Larger employers have clear KPIs (Key Performance Indicators) in electronic systems – are they filled out? Are you as the employer, let alone the employee, clear about the job duties and responsibilities? Has this been communicated to the employee?
Secondly, are those job duties and responsibilities SMART? i.e. are they Specific, Measurable, Achievable, Realistic and anchored within a Time Frame? Not all goals will neatly fit into these categories, however, to the extent it is possible, they should be clear so that employees know what they are expected to achieve e.g. x number of sales per month, y % of savings per year, z complaints dealt with within 30 days etc. You may also need to list behavioural and attitude related goals as well. Also, have those roles and responsibilities changed over time? Someone who was recruited for a data entry role and is now a manager will need new roles and responsibilities.
Thirdly, what evidence do you have that your employee is not meeting their job duties and responsibilities? Sometimes you can get hard evidence, e.g. number of sales, external complaints, number of employees to manage, % of time spent on task, number of billable hours etc which show that they are not meeting targets. Other times it may be soft signals e.g. number of informal complaints, increased workload or overtime by other employees in the team, culture or pulse surveys, 360 degree feedback from those that work with the employee, line manager or other staff observations etc. Try to gather all of these together to ascertain if it is reasonable to come to the conclusion that the employee needs to be performance managed (as opposed to them simply not meeting your impossibly high standards).
Fourthly, is it time for a formal performance management meeting? You may need to prepare a performance management plan which outlines the role’s duties and responsibilities and your evidence that the employee is not meeting these. Invite the employee to respond. Communication is key. What are future goals or requirements? All of these discussions should be clearly documented and ideally, agreed by both parties.
Many people believe that there should be three performance warnings. This is not the case. It may be that three warnings are appropriate in some circumstances, but in other cases it could be more or less. Similarly, there is no strict time frame for a second meeting – this will depend on the nature of your business and a realistic timeframe to meet goals. For example, if the goal is to make 100 sales per month, reviewing their performance a week later is not helpful.
In addition to setting future goals and a follow up meeting, consider what can be done to assist the employee to meet their goals. Would additional training assist? Job shadowing someone else? Coaching? Ask the employee what would help and try to implement reasonable suggestions to try to lift their performance. All of these things should be recorded in the plan.
Fifthly, you will need to formally require the employee to attend a review meeting. If they have met the goals, great! You may wish to consider whether to keep someone on a performance management plan to ensure that their improved performance is sustainable. Alternatively, the formal performance management plan can be considered closed. All of these discussions should be recorded on the PMP. If they haven’t met the goals, again explore the reasons why and consider whether the goals are need to be revised or if disciplinary action is required.
Disciplinary action
When considering any disciplinary action, from a first warning to termination, you will need to ensure that you have a valid reason and that you have followed a fair process. The disciplinary action must be fair and reasonable and you may wish to consider obtaining legal advice before issuing any disciplinary action.
Managing poor performance can be tough. But it can also be worth it. High performance in a business can result in increased productivity, engaged and committed employees and improve retention and recruitment. High performance should be encouraged, reinforced and rewarded in your workplace. Poor performance should be dealt with.
In the words of Lady Gaga:
I've got a hundred million reasons to walk away
But, baby, I just need one good one, good one
Tell me that you'll be the good one, good one
Baby, I just need one good one to stay
Remotely Legal can assist employers and boards on all aspects of employment law, including providing training on performance management, advising on an appropriate course of action to navigate a difficult employee, preparing performance management plans and scripts, conducting independent investigations and defending any legal claims.
This blog is general advice only. Please obtain legal advice in relation to your specific circumstances.
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