When they’re not “the one”: How to prevent, manage and terminate underperforming employees

Staff underperformance, whether it is due to personal issues, workplace conflict, change fatigue or being actively disengaged, can have significant repercussions on your bottom line, culture and overall performance.

As an employer, it can be downright infuriating, not only because of the money wasted but also due to the time you need to invest and the risk you open yourself up to personally if it all goes wrong. How then do you prevent, manage and terminate underperforming employees in a way that limits your risk and liability?

To help you understand your rights and responsibilities here’s what you need to know about underperformance in the workplace.

What is underperformance?

The Fair Work Ombudsman defines underperformance as an employee not doing their job properly, or behaving in an unacceptable way at work. It includes:

  • Not carrying out their work to the required standard or not doing their job at all
  • Not following workplace policies, rules or procedures
  • Unacceptable behaviour at work, for example, telling inappropriate jokes
  • Disruptive or negative behaviour at work, for example, constantly speaking negatively about the company

While some areas can sound more like misconduct, it is crucial not to get the two confused. It is considered misconduct when an employee:

  • Causes serious and imminent risk to the health and safety of another person or the reputation or profits of their employer’s business or
  • Deliberately behaves in a way that’s inconsistent with continuing their employment

Examples of misconduct include fraud, theft, assault, being drunk at work and refusing to carry out reasonable and lawful directions.

How can you prevent underperformance?

The good news is that there are many ways you can protect your organisation from underperformance – or at the very least extended periods of underperformance.

Develop a performance management policy

A performance management policy outlines the definition, management and consequences of underperformance. This ensures your team know exactly what is expected of them and what will happen if they underperform.

List outcomes and behavioural expectations in position descriptions

Position descriptions are a great way to establish expectations up front. To ensure your new employee knows what is expected, list the key outcomes and behaviours you consider essential to their role.

Provide further training and create a culture where employees can ask questions

One of the primary reasons for underperformance is a lack of knowledge and training. By creating a workplace culture where questions are welcomed, staff will be more likely to go to co-workers and managers to get clarity and ask for help. When this happens, you can see the knowledge gaps in your team more efficiently and can ensure they have appropriate training.

Conduct regular performance check-ins

A lot of organisations leave performance issues to the half-yearly or yearly performance review when bad habits are established, and poor performance has taken its toll. Instead, try more regular temperature checks with your team, short check-ins every month or two to see how staff are going, address any issues or concerns quickly and identify further training opportunities.

What should you do when an employee is underperforming?

Occasionally even with guards in place, you can have an employee underperform. As an employer or HR manager, it is crucial to manage with underperformance quickly.

Organise a meeting with the underperforming employee

The issues that cause poor performance need to be looked into, and the only way to do this is to have a conversation with your employee. After explaining how they are not performing, ask what is happening and what is causing it.

It is important to create a safe space where they can feel free to talk, and you may also like to offer them the opportunity to bring a support person. Here you may find that they are experiencing health or family issues, that they have a conflict with a co-worker or manager, or that they need more support or training in a particular area.

It is important to listen attentively during this process. Once the reasons or influencing factors behind the underperformance are established, together form clear steps forward on how to improve performance. It is important to take detailed notes of this meeting, and document what was said and what was agreed on.

Establish a performance plan

Following the discussion formalise the agreement in the form of a Performance Plan and implement the actions discussed. Also, schedule in regular performance discussions at this time to monitor progress and see if there is any further help or support the employee needs.

How do I terminate for underperformance?

If you have been through the performance management process, but your employee is still consistently underperforming, then it is time to take further action. As tempting and satisfying, as it may be to immediately terminate the employee, for the protection of your company and yourself, termination needs to be the last resort.

The following are steps you can take when faced with an employee who is consistently underperforming:

  1. Organise another meeting to discuss ongoing performance issues and the consequences of not improving
  2. Change the employee’s duties (if appropriate) or provide additional training
  3. Issue the first or an additional warning
  4. Speak to an employment lawyer about the possibility of terminating based on underperformance

This last step of talking to a specialised employment lawyer is crucial to avoid an unfair dismissal, or general protections claim and ensure that the employee receives the right notice and final pay. And if need be you may need to consider ex-gratia payments, deeds of release and confidentiality.

Are you experiencing the frustration of underperforming staff? Need advice on how to prevent, manage or terminate underperforming employees? Call us today on +61 (07) 3876 5111 to book a consultation.

About the Author

Jonathan Mamaril is the principal and director of NB Lawyers, the lawyers for employers, and a specialist in employment law. Over the last ten years, Jonathan has helped hundreds of employers understand their legal requirements, mitigate risk and liability, protect their reputation and achieve their goals for business growth and expansion.