Performance management is an essential task for employers to ensure the successful operation of their business. When issues of underperformance or misconduct are not addressed and managed effectively, they can affect others in the workplace and overall productivity.

Underperformance differs from misconduct. Underperformance is generally where an employee is not performing the duties of their position to the required level; not complying with policies and procedures and generally behaving inappropriately and being disruptive in the workplace.

Misconduct is unacceptable or inappropriate behaviour at work. Some examples are misuse of company property, dishonesty, attendance issues, consistently being on social media for personal reasons during work hours and unexplained absences from work during rostered working hours. Misconduct is conduct that would generally warrant a formal warning, as opposed to serious misconduct that will result in termination of employment without notice.

Understandably most people do not enjoy the confrontational aspect of managing an employee’s performance or misconduct, so they avoid it or do it poorly. It is important for employers to act on performance and conduct issues, so they can be relied upon if the employee’s performance continues to be poor or deteriorates further, or the employee engages in other acts of misconduct.

Performance management can also be a useful tool to as employees are often unaware they are not performing to the standard expected by their employer. Failure to address issues can result in them becoming more serious and negatively affecting other employees in the workplace and the productivity of your business.  

Employers have a legal obligation to follow a fair procedure when managing an employee’s performance or conduct. Where a fair procedure has been applied, this will reduce your risks of an employee being successful with an unfair dismissal or general protection claim.

Common mistakes

• Not communicating performance and behaviour expectations clearly to employees
• Misclassifying misconduct as underperformance.
• Not addressing performance and conduct issues as they arise and reaching a point where you want to dismiss the employee
• Not following policies and procedures regarding performance management and disciplinary action
• Moving to dismiss an employee without having clear evidence of poor performance or misconduct to support a valid reason for dismissal and/or not having followed a fair procedure prior to the dismissal
• Failing to give formal warnings for poor performance or misconduct prior to dismissing an employee for these reasons
• Failing to confirm formal warnings in writing
• Issuing written communication or a formal written warning to an employee about their performance or conduct without meeting with them first
• Failing to keep detailed file notes of meetings with employees about performance or conduct matters

Key risks of getting it wrong

By not managing an employee’s performance or conduct appropriately, your business is exposed to numerous legal claims on termination including claims for unfair dismissal, general protections, workers’ compensation, breach of contract and discrimination. It also exposes the employer to legal claims from other employees affected by the difficult and poorly managed employee.

Outside of legal claim, poorly managed employees can adversely impact on productivity and therefore on an organisation’s bottom line, as well as employee morale, motivation and the retention of ‘good’ employees.

How can we help you?

If you have a performance management or misconduct issue it is best to speak to one of our Employment Lawyers. We advise employers every day on issues that arise with their employees’ performance and conduct and how to effectively manage these issues to reduce their liability and reach a position of termination of employment, where necessary. We also provide advice on the legal risks of getting this wrong, which can be very costly.