What to do when your employee is underperforming

Across the country, people are being encouraged to work from home as much as possible to stop the spread of COVID-19. While many employees are adapting well to their new work environments, other employees may have experienced a drop in productivity.

There are many reasons for decreased performance such as personal stress, environment changes or even company-wide systemic problems. Likewise, there are many strategies for increasing performance including identifying the underlying reason, increasing communication, setting realistic goals and having greater transparency.

Your Legal Obligations

It is important to recognise that underperformance is not the same as misconduct. Misconduct is very serious behaviour such as theft or assault, which may justify instant dismissal. In cases of misconduct, employers should seek specific advice from their lawyers about how to proceed before taking any action, so as not to give rise to an action for unfair dismissal.

Underperformance, on the other hand, should be dealt with very differently. When working with an employee to remedy underperformance, the usual goal should be to make sure that the employee knows what is expected of them, and has the necessary tools at hand to meet those expectations.

A step-by-step guide that you can follow to manage underperformance whilst complying with your legal obligations is:

1. Identify the problem
   It is important to identify the problem correctly and precisely. Is there a metric that is being used to track the employee’s performance that has not been met, or a target that has not been reached?
2. Assess and analyse the problem
   It is important to consider how long the problem has existed, how serious the problem is, and to outline exactly what is expected of the employee. If possible, look at the employees job description in their contract of employment and identify how their current performance is lacking compared to their job description.
3. Meet with the employee to discuss the problem
   Once the problem has clearly been identified, it is best to meet with the specific employee to discuss the issue. From this discussion, the employee should understand and be able to identify:
   1. what the problem is
   2. why it is a problem
   3. how the problem is impacting the business or the workplace
   4. what are the specific expectations that the employee is failing to meet

It is also a good idea to ask the employee whether there are any other reasons for the underperformance that they are aware of, such as stresses at home.

4. Come up with a solution
   After discussing the problem and the expectations, work with the employee to precisely identify how they can start meeting expectations. This may include:
   1. answering any questions that the employee might have
   2. identifying what tools or training the employee needs to succeed
   3. coming up with a schedule for regular monitoring of their progress and creating a timeline for improvement
   4. clarifying the roles and responsibilities of both the employee and the employer

We also recommend that, after the verbal meeting, the discussion and outcomes of the meeting be put in an email and sent to the employee.

5. Monitor the employee's performance
   As stated above, it is important to regularly monitor the employee’s performance to confirm that they are meeting expectations. We recommend scheduling a meeting to discuss the issue and the outcome, even if the issue is no longer existent, as this can be used to encourage the employee.

If the employee’s performance has not improved, more serious action may be required, including a formal warning, and ultimately, termination of their employment. Employers must make sure that the termination is not harsh, unjust or unreasonable, as this may give rise to a claim for unfair dismissal.

At Frank Law, we regularly advise our clients on their legal obligations when dealing with underperforming employees, and can advise you on the specific steps that you should take.

If you have further questions, please contact us at frank@franklaw.com.au. 

This is not legal advice.