Poor Performance Management in the Fair Work age.
Since Fair Work was introduced there has been a dramatic increase in the number of claims made by employees for unfair dismissal. And while the act does make it easier for employees to make a claim, in order to stay out of court you must follow some simple principles when it comes to managing an underperforming employee. Here is an actual case study of a termination that did not go well.
Over the course of about 18 months this small Professional Services firm put up with mediocre performance from one of its managers. And whilst there were discussions about performance they were too informal. They lacked any real sense of consequence and there was no record or documentation to support the decision to terminate. As a result, an unfair dismissal claim was lodged and an arbitration hearing set with a commissioner. It became clear that although the dismissal was probably reasonable it was harsh simply because they did not follow due process. In order to settle, the company negotiated a further severance on top of its original termination package. Because the firm and the directors took a “too soft” approach to managing performance it cost them dearly. Approximately $23,000 in severance pay, legal and consulting fees. On top of this; an unproductive employee, lost revenue, damaged reputation, and countless hours of time that could have been better invested in looking after clients.
Here are the common mistakes we see all too often
- Performance discussions are “too soft”
- Have not conveyed your expectations.
- Haven’t put a time frame for improvement
- Have not documented each conversation.
- Did not give the employee a chance to respond.
- Did not use verbal and written warnings.
Performance management is about feedback on an individual’s goals and objectives. If you are having a corrective discussion it means they aren’t meeting your expectations. It’s time to have full and frank discussions about what has gone wrong, what needs to change, what training or support they require and a time frame to get the issues back on track. If their performance does not improve then you need to consider the process of delivering verbal and or written warnings. These must convey that the expectations are not being delivered and without improvement their position in the company could be reviewed.
While the process is simple every employee in every situation is unique. So, before you put yourself in a position that may give rise to an unfair dismissal give us a call and we can walk through with you a strategy to stay out of trouble.
Epilogue: this is what the help desk put together for this client: after the fact…… Installed a new performance management system, set up a quarterly goal setting process, a new appraisal system and one on one support in delivering feedback.
For help with performance management give one of our HR Help Desk Advisors a call on 1300 624 654