Managing Poor Performance by Ascent HR Management Consultants

Managing poor performanceASCENT HR – Presentation June 2014

(c) Ascent HR - www.ascenthr.com.au 1

Why is performance management hard?Requires honesty –

Difficult to tell someone face-to-face their performance is poor.

Requires clear identification of short falls in performance – Difficult where no clarity on expected standards.

Requires time and commitment – Difficult if looking for a quick fix.


Why is performance management important?

Financial risk – Company will not be successful if staffed by underperformers.

Litigation risk – Company will not be able to safely dismiss poor performing

employees if performance management process not followed.

Reputational risk – Company reputation damaged if poor performance leads to

poor delivery to customers.


What are the benefits from managing poor performance? Creating a high performance culture – part of the

Company’s Total Performance agenda.

Improved productivity and service.

Ultimately freeing up management time.

Avoiding unfair dismissal claims!


Managing poor performance


Let me introduce you to…

Roger, new finance department manager.



… and Roger’s team



Roger’s first few months

Roger starts his new role in February.

After a few months, Roger starts to have some concerns about the performance of some of his team members.

In particular, he’s concerned about:Ed, accountant;Amy, accounts clerk; andCaroline, Roger’s PA.



Diagnosing the problem

Roger meets with Anna in HR – “What am I going to do about these poor performers?”

Anna: “Need to diagnose the problem – why are they performing poorly?”

Poor performance could be due to: incapability - can’t do; ill health – illness preventing from doing; misconduct – won’t do.

Why are Ed, Amy and Caroline not performing?



Diagnosing the problem (cont.)

Ed:no ill health issues;does the work – but does it poorly;

incapability?



Managing poor performance –

“Classic” poor performance



“Get rid of him!”


The law: unfair dismissalFair Work Act 2009 (Cth):

Person has been unfairly dismissed if:

Person has been dismissed.

Dismissal was harsh, unjust or unreasonable.

Dismissal was not a genuine redundancy.



The law: unfair dismissal (cont.)

Factors in deciding whether a dismissal is harsh, unjust or unreasonable:

Was there a valid reason for dismissal (conduct or capacity)?

Was the person notified of that reason and given an opportunity to respond?

Where dismissal is for poor performance, was the person warned about the impact of poor performance prior to dismissal?

NOTE: Primary remedy for successful claim is reinstatement!



Golden rule

Employee must know what’s coming down the barrel of the gun!



Can Roger Dismiss Ed? Potentially have a valid reason for

dismissal on the basis of capacity – if Roger can demonstrate Ed’s poor performance.

BUT Roger: Never told Ed this was an issue

previously; Never warned Ed of impact on poor

performance (eg, potential for dismissal); and

Never provided Ed with an opportunity to improve.



Any dismissal of Ed now will almost certainly be an unfair dismissal!

Roger’s optionsTwo options:

Dismiss Ed now… and write a cheque for unfair dismissal costs (max. award 6 months’ salary) – or be ordered to reinstate him.

OR

Give Ed an opportunity to improve… and if he fails to improve performance, dismiss him fairly.



Managing Ed – the right solution Provide Ed with the opportunity to improve –

through performance management process.

Options:

Informal action:• Quiet word, counselling, opportunity to improve before

going into a formal process.

Formal action:• Performance management process & performance

improvement plan.



Performance management process

Dismissal for poor performance will only be fair where: employee understands performance expectations; has been informed that s/he is not meeting expectations; and has been given the opportunity to improve her/his performance.

SO…



Performance management process (cont.)

Meet with the employee and inform her/him that performance is below expectations.

Explain what the expectations are.

Put the employee on a performance improvement plan (“PIP”).

Consider training/informal coaching to assist in performance improvement.

Monitor performance against the PIP on a regular (eg, monthly) basis.

Take disciplinary action if performance does not improve.(c) Ascent HR - www.ascenthr.com.au 20


Preparing for the meetingPrepare in advance of the

meeting:

Rough script of what will be covered – see hand out.

Evidence of poor performance.

Performance improvement plan – see hand out.



Preparing for the meeting (cont.)Rough script

Manager: presents concerns and evidence; listens to the employee’s explanations; discusses the situation with the employee; and develops performance improvement plan.

Common pitfalls to avoid: losing control of the meeting/not covering all points; being too nice/benefit of the doubt; and being too defensive/closed minded.



Preparing for the meeting (cont.)Establishing poor performance

What should the employee be doing? Job description. Employment contract. Organisational chart. Other sources?

What is the employee doing? Emails. File notes. Appraisals. Records from informal

performance discussions.



Preparing for the meeting (cont.) In preparation for the meeting, Anna gets out Ed’s 2009

performance appraisal:– End of year: “Ed has achieved all of his objectives. Ed has received

excellent comments from his customers which reflects his commitment to the businesses he works with.”

Roger: “What?! His performance is terrible!”

Previous positive performance appraisal makes it difficult to establish poor performance.

Do yourself a favour – give honest performance appraisals!



Preparing for the meeting (cont.)Performance Improvement Plan

Specific targets

Measurable targets

Achievable targets

Realistic targets

Time based targets

Must ensure employee is crystal clear about what the expectations are and when they must be met.



During the meeting… Ed’s very angry about the

allegations of poor performance:

Never been an issue before – see past performance appraisals.

Issue arises because Roger just doesn’t like him – it’s a personality clash with new manager.

Targets set in the PIP aren’t achievable – none of the accountants meet these standards.



Responding to Ed’s comments Anna & Roger listen to Ed’s

comments.

However, have documented examples of poor performance – e.g., objective evidence of poor performance.

What about allegation re unreasonable targets set under the PIP?



Warne v ANZ Banking Group Facts: Warne employed as business development manager. Placed on PIP – and ultimately dismissed for failure to

meet sales targets.

Commission: Performance targets not realistically set – as evidence by

the fact that all business development managers in WA were not meeting.

On that basis, no valid reason for dismissal.

Ensure targets set are reasonable and being achieved by the rest of the workforce!



First review meeting After investigating Ed’s comments about the targets,

Roger & Anna revise the PIP and commence managing Ed against the PIP.

Six weeks later, at the first review meeting, Ed has met some but not all of his performance targets.

Roger’s question to Anna: “He’s had a chance to improve, can I dismiss now?”



How long is long enough?Need to be given long enough to improve before

taking disciplinary action.

Factors in how long is long enough:Nature of the job – how difficult it is to learn new skills;Employee’s status/seniority within the organisation;Employee’s length of service; andEmployee’s performance history.



Taking it one step at a time

Rarely, if ever, acceptable to go straight to dismissal for performance reasons – step through the process:

Verbal warning. Written warning. Second & final written warning. Dismissal.



Recruiting & HR

Managing Poor Performance by Ascent HR Management Consultants