Bad Employee 800 x 400

20 July 2021

Managing Employees with Poor Performance

How do you deal with an under-performing employee?  Hint: do not start by inviting them to a disciplinary meeting.


From the outset, employers must be clear with employees about the requirements and expectations of a role.  It is difficult for an employee to meet unclear expectations.  If an employee is not performing at the level required for their job, it is important to understand why this might be.  Often there are many factors at play, including:


  • Lack of resources, skills or knowledge;
  • Workplace culture;
  • Management;
  • Personal circumstances;
  • Economic/political changes;
  • Employee attitude; and/or
  • Employee impairment (e.g. a medical issue or drugs/alcohol.


In most circumstances, the employer should start with an informal discussion with the employee, reminding them of the role requirements and giving guidance for improvement.  It is also important to distinguish between performance issues and disciplinary issues.  This can be difficult in some circumstances and if an employer does not get this right, it can be a costly mistake, resulting in a personal grievance claim.


If a more formal approach is necessary, the first step for an employer is to invite the employee to a meeting to discuss any concerns the employer has.  The invitation letter should clearly set out how the employee’s performance is sub-par and advise the employee of their right to support or legal representation.


Prior to the meeting, the employer should create a draft Performance Improvement Plan (PIP).  The PIP should include details of relevant training/support that the Employee may need.  This is very important as, if the employee raises a personal grievance down the track, the Authority or Court will examine the training and support given to an employee.  If this is insufficient, this may be grounds for a personal grievance.  The PIP should also include a timeframe in which the employee needs to show progress.


At the meeting the employer and employee should assess and discuss the reasons that the employee’s performance is lacking, using specific examples of where the employee is not meeting the employer’s expectations.  The employer should present the draft PIP and ask the employee to give feedback on the PIP.  The employer should then schedule a time to assess the employee’s progress.  The employer should also ensure they have a detailed record of the meeting.  It is also important to warn the employee that if they not meet the target set out in the PIP, disciplinary action may follow.


The PIP will then need to be finalised.  It must give the employee clear, achievable targets they can reach within the specified timeframe.  The employer and employee should have regular meetings to assess the employee’s progress throughout the timeframe of the PIP.  During these meetings the employer should give the employee clear feedback on their progress and appropriate assistance or guidance as necessary.  Any issues should be identified and discussed with the employee.  Positive feedback is also important.  The details and outcomes of these meetings should be recorded in the PIP.


At the end of the PIP timeframe the employer and employee should formally review the employee’s progress.  The employer should review all of the documentation from the PIP time period and come to a preliminary view on whether the employee has met the requirements of the PIP.  The PIP should be included with the letter inviting the employee to the meeting.  The invitation letter must set out:


  • The employer’s preliminary assessment of the employee’s performance against the PIP targets;
  • Details of any issues raised during the PIP;
  • Details of the time and date of the meeting;
  • Details of possible outcomes of the meeting, including any potential disciplinary action if the employee has not meet the objectives of the PIP; and
  • A reminder that the employee is entitled to a support person or representative.


During the meeting the employer must listen to the employee’s comments on the PIP and their performance.  Once the employer has heard and considered the employee’s feedback, the employer must come to a final decision and communicate this to the employee.  The outcomes may include the following:


  • No continuation of the PIP and the employee resumes work;
  • Move to an informal performance management process;
  • Continuation of the PIP for a further specified time period; or
  • Disciplinary action (note: this should only be a warning) and continuation of PIP.


If the PIP needs to be continued, the above process will need to be repeated.  The Employer should make it clear to the Employee that a possible outcome may be a final written warning if the Employee does not meet the targets set out in the PIP.  If the PIP needs to be extended again, the employer will need to warn the employee that a possible outcome may be termination of their employment on notice.


The Employment Court has noted that a dismissal for poor performance is substantially no different from a dismissal for misconduct – the employer is required to act fairly and reasonably and in good faith.  It is important to be aware that, even after undergoing the process summarised above, the employee may still try to raise a personal grievance if they are dismissed.  However, any personal grievance claim will be much cheaper and easier to defend if the employer has sought legal advice from the outset and undertaken a fair and robust process.


Navigating poor performance can be difficult and it is important that you seek legal advice prior to commencing a performance process. 


For any employment needs, please contact the Employment Team at Saunders & Co Lawyers – Andrew Riches, Claire McCool, and Deborah Hendry for more information and advice.