Performance Management

Businesses need effective performance management processes in place in order to ensure that employees are performing and behaving well, which produces better results for the business.

Underperformance is when an employee is not performing well in their job or not behaving appropriately at work, such as:

• not completing their work to a satisfactory level or not doing the work at all
• not following workplace policies, rules, procedures, or instructions (e.g. consistently turning up to work late)
• behaving in an unacceptable manner at work (e.g. telling sexist jokes or yelling at customers)
• disruptive or negative behaviour at work (e.g. constantly complaining about management)

There is no specific rule that says you have to provide an employee with 3 warnings before terminating. You must consider what is reasonable and give the employee a chance to improve their underperformance. It is important to have a valid reason and follow a fair process when disciplining an employee, especially when termination is a potential outcome.

There are varying degrees of disciplining an employee who is underperforming.

1. Informal Warning

Depending on the seriousness of the underperformance, it may be appropriate to pull the employee aside and have an informal discussion regarding their performance. For example, if an employee has come to work late a few times, you may wish to remind them that you have an expectation of them to come to work on time.

For less serious conduct, you may wish to provide a few informal warnings to give them an opportunity to improve before taking further disciplinary action.

2. Informal Meeting and Warning

The next level up is an informal meeting. You can ask the employee to come in for a meeting on the same day. Put forth your allegations to them in order to give them a chance to respond if there is an explanation for their behaviour or lack of improvement if they had received previous warnings.
You may choose to have an informal meeting for a first time offense, for example, if you received a report that an employee had made another employee uncomfortable with an inappropriate joke, then you may have a meeting, ask for their side of the story, and if confirmed, give them an informal warning that it was not appropriate behaviour and then you may keep a record of the meeting that took place and put a note against the employee’s file.

3. Formal Meeting and Warning

If you have given the employee previous verbal warnings or the underperformance is sufficiently serious, you may wish to conduct a formal meeting with your employee and issue a written warning. When conducting a formal meeting, you should provide the employee sufficient notice of the meeting and give them an opportunity to have a support person present.

In the meeting, you should put to them the allegations if there are issues of behaviour, provide any evidence of their underperformance and raise where they have had previous warnings on an issue. Give them an opportunity to respond to the allegations and then close the meeting. You may then consider what was said and if necessary, issue them with a written warning summarising what was said and explaining what they need to improve on.

If there is an issue with an employee not doing their job properly or not meeting their KPIs, you may wish to consider putting them on a Performance Management Plan. This will provide clear areas on which the employee needs to improve on and enables you to assess their performance and document if they improve.

If an employee raised in the meeting that they are struggling, you may need to consider providing more training or assistance in order to help them improve.

4. Formal Meeting and Final Written Warning

You follow the same steps in point 3, however, you are issuing a final written warning and thus warning the employee that if they fail to improve, they may be terminated. You do not necessarily have to issue a written warning previously, you may give multiple verbal warnings (helps if you have notes and dates written of warnings as evidence) and then give a final written warning.

You must allow your employee an opportunity to improve their performance or behaviour once they have been warned. There is no set amount of time you need to wait or a number of warnings to provide before you can terminate an employee, but you must ensure the disciplinary process is fair and reasonable and you have provided the employee with clear reasons for their warnings and clear expectations about how they need to perform.

Always keep good notes of your verbal warnings, meetings and provide warnings in writing where possible. If an employee files an unfair dismissal or general protections claim, it is better for you to have evidence available that shows you followed a fair process and dismissed them for a valid and lawful reason.

If you are having issues with an employee, please contact the Workplace Relations Team using the form below.