By Amanda Curatore

When the performance, conduct, and achievements of your employees dictate the success of your business, you need to ensure that they’re doing their best work.

So, what do you do if an employee is under-performing and not meeting expected standards? You might have to terminate the employee if they can’t make the necessary improvements. But before you take this step, I recommend you follow the process I’ve laid out in this article. This will ensure you’re acting in accordance with employment laws.

Following these steps will mitigate risk for your business if you decide to terminate an employee for poor performance.

Step 1: The informal chat

Have a chat to your employee. More often than not, an employee may not be delivering work to the full extent of their ability due to a miscommunication, misunderstanding their instructions, a workload that’s already at full capacity, or they may be going through a crisis in their personal life that’s taking their mind elsewhere.

In this initial, informal discussion, you have the opportunity to identify specific areas requiring improvement and whether the employee requires any guidance or additional assistance to meet their work expectations. Having an informal discussion with your employee about why they are not performing to the appropriate standard and what needs to change in order for them to produce quality work and reach goals, is sometimes all you need to do.

Step 2: The formal discussion

If your informal discussion fails to improve your employee’s performance, you’ll need to have a more formal discussion. Set up a formal meeting where I strongly recommend you issue your employee with a Performance Improvement Plan (PIP).

The purpose of the PIP is to support your employee to ensure they’re able to meet business expectations. A PIP is a formal and strict plan which outlines how the employee is currently performing, what goals and standards the employee is required to meet, how the employee can achieve these goals and what support mechanisms will be available to assist the employee in this process. This may include the business offering additional training, if necessary.

As part of the PIP process, you should also have regular meetings with the employee to ensure they stay on the right track. If, at the time of the review meetings, the employee has not met PIP expectations, this is when you turn to step3.

Step 3: The disciplinary process

If the employee’s performance still hasn’t improved, you may start a disciplinary process. Before inviting the employee to a disciplinary meeting, it’s best practice to give them 24 hours’ notice of the meeting and the opportunity to bring a support person to the meeting if they wish. Once you’ve decided to commence a disciplinary process, the following steps can be followed:

  1. Verbal Warning: You can issue a verbal warning at any time when an employee’s performance justifies the issue of a verbal warning.
  2. Written Warning: You can issue a written warning at any time when an employee’s performance is unsatisfactory and one or more of the following apply:
    • The employee has received an earlier verbal warning for a related issue and has not improved their performance to the satisfaction of the business;
    • The employee has previously received a verbal warning for an issue that is not directly related but is of a similar nature; or
    • The nature of the employee’s performance justifies the issue of a written warning.
  3. Final Written Warning: A final written warning may be issued at any time when an employee’s performance is unsatisfactory and:
    • The employee has received an earlier written warning for a related issue and has not improved their performance to the satisfaction of the business;
    • The employee has previously received a written warning for an issue that is not directly related but is of a similar nature; or
    • The nature of the employee’s performance justifies the issue of a final written warning.
  4. Termination: An employee’s employment may be terminated at any time when their performance is unsatisfactory and:
    • The employee has received an earlier final written warning for a related issue and has not improved their performance to the satisfaction of the business;
    • The employee has previously received a final written warning for an issue that is not directly related but is of a similar nature; or
    • The nature of the employee’s performance justifies the termination of his or her employment;
    • Any decision to terminate an employee’s employment must be approved by the employee’s Senior Manager.

Generally speaking, before having their employment terminated, an employee has several opportunities to improve their performance. This not only mitigates the risk of an unfair dismissal claim, if you were to simply terminate them without giving them an opportunity to improve, it also allows such employees to become more capable which, in turn, will benefit your business.

What should you put in a warning letter?

When you issue an employee with a written warning, you need to outline:

  • the nature of the employee’s unsatisfactory performance;
  • the improvement required;
  • a date when you will next review the employee’s performance; and
  • the consequences should they not achieve what’s expected of them.

Also, if you issue an employee with a verbal warning a note to that effect should also be placed in the employee’s personnel file.

It is, of course, possible for the business to take alternative disciplinary action, such as issuing two final written warnings, if the circumstances call for it. The Company can also reserve its right to bypass or not apply written warnings, and proceed with termination, if the nature of the employee’s performance justifies this approach.

No approach to managing performance will be the same, save that termination should be a last resort. While the approach you take should be based on the nature of the issue and the individual, if you follow the process I’ve laid out you’ll be giving your employee every chance to improve as well as reducing the risk to your business.

Give your employee the necessary help and support to get back on track, and your poor performer might even turn into your star performer!

Amanda Curatore is a qualified senior workplace relations consultant at FCB Group and HR Assured, where she provides daily advice and support to businesses of all sizes on HR issues ranging from the simple to the absurdly complex.