We love this Workplace Bulletin article about Performance Management…
Why manage an employee you know won’t improve?
Performance management, when used properly and fairly, makes perfect business sense when you have a worker who you know would benefit from some guidance and management. But what about that worker who is treading water … whose under-performance has been ongoing and is unlikely to improve? Is it worth your efforts?
Let’s face it – performance management takes time and absorbs your resources. And it’s not guaranteed to deliver the results you want (even for the ‘good’ employee).
So, what course of action should you take when the under-performing worker’s attitude is affecting staff morale, or is having a negative impact on clients or customers … and you?
Get rid of them! I hear you cry. Why should I keep paying a troublesome worker any longer than I have to?
Rebecca Byun, an employment law expert at Holding Redlich, warns that skipping the performance management process altogether and proceeding to dismiss the under-performing employee is risky. She provides three good reasons for applying a performance management process to your business.
1. Skipping performance management leaves your business exposed to various employee claims
“Recent data shows that the majority of claimants coming before the Fair Work Commission are individuals disputing the termination of their employment,” Byun says. “This comes as no surprise as employees today are more aware of and vigilant with their rights. And mostly, employee claims are easy and inexpensive to commence.”
She says the workers most likely to make an unfair dismissal claim – who say their dismissal was harsh, unjust and unreasonable – are the ones not given an opportunity to respond or a chance to improve their performance and/or conduct.
“In this context, a decision not to undertake performance management can be fatal to defending this type of claim,” she says.
A worker is less likely to pursue an unfair dismissal claim against you if they have been taken through an objective performance management process showing there was a legitimate reason for dismissal and it was nothing personal.
2. Any savings made by dismissing the worker early may be outweighed by the costs of recruitment and defending claims
Byun says even though you may make some initial savings from not having to invest any further time and resources into your worker, you may need to commit additional time and resources in recruiting and training someone new for the job, which may ultimately cancel out those initial savings. Add to this any costs and time for defending any claims in court and you may find that it has cost your business much more in the longer term, she says.
3. Three strikes you’re out! РMyth
“Let’s kill one myth of performance management once and for all,” Byun states. “Unless you have committed the business to this process in a policy or contract, there is no ‘three strikes’ rule or a set minimum period for a performance management process.”
She says 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 underperformance is impacting others including staff and clients and whether the employee has already been made informally aware of their performance issues,” she says.
How important is the process?
In most cases, the answer will be ‘extremely’. There is an abundance of cases where the Fair Work Commission (FWC) has found that employers should have dealt with performance issues more adequately through performance management before proceeding to dismissal.
Source Workplace Bulletin Wednesday 9th March 2016