Termination vs tolerance: How to manage poor performing employees

72% of employees say their performance would improve if HR offered more feedback

Termination vs tolerance: How to manage poor performing employees

To err is human – and in the workplace mistakes are often unavoidable. In a post-pandemic world, employees are burned out, overworked, and feeling underappreciated – so much so that it’s impacting their performance. A recent report from Clear Company found that 25% of employees leave an organization because of a lack of recognition – while 72% admitted that their performance would improve if HR leaders offered corrective feedback.

With that in mind, HRD spoke with legal consultant Andrew Caldwell, who revealed the best ways HR leaders can handle poor staff performance without resorting to termination.

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“When you notice an employee is underperforming the first step is to sit down with them and have an informal conversation to find out if they have a reason for under performing,” Caldwell told HRD. “They might be aware that they are, or they could identify that they are going through a personal, family, or health issue. Some employees feel hesitant to talk to their manager if they are going through a challenging time because they think it might affect their future in the company.”

It's all about open communication with your employees by having an open-door policy. Caldwell suggests reassuring staff that anything they share with you is confidential. Go on to provide constructive feedback and solutions to performance issues. If they are struggling with work, offer additional training.

“If they are struggling outside of work, offer an employee assistance program if you have one, or suggest they seek support from a healthcare professional.”

Can I fire an employee for poor performance?

It’s the question at the heart f the issue – when can HR leaders terminate an employee for continued bad performance. The question itself is much more nuanced. For instance, how do you define poor performance? Has the employee had a chance to rectify their mistakes? Are you liable for wrongful termination for mismanagement of the situation?

Speaking to HRD, Stuart Rudner, founder of Rudner Law, advised employers to use progressive discipline as a way to combat poor performance.

“Many judges will criticize employers for terminating employees, saying that while there may have been misconduct, it wasn’t egregious enough to warrant termination - and that some lesser form of discipline was appropriate,” explained Rudner. “That’s a classic quote from many court cases. Unfortunately, however, there aren’t a lot of lawful forms of discipline.

"Often, employers consider suspending an employee - and in many cases, suspensions can create a risk of a constructive dismissal claim. Demotion, similarly, is extremely risky. As such, employers don’t have a lot of options available. This is where the importance of contracts comes in. Employers can use a contract to provide the right to impose suspensions as a form of discipline. However, without the contractual right, it’s quite risky.”

Launch an improvement plan

Rather than jumping to terminations, employers should opt for an official improvement plan to help the employee get back on track. Try creating a realistic, step-by-step agenda that includes goals and dates.

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“Make sure to ask what they need so you can support them in any way that you can,” added Caldwell. “If they need additional resources and training, take that into consideration. It’s best to always document any conversation, or the steps taken, while reviewing an employee’s performance.  These can be formally documented or done via email. Keeping a record allows managers to track improvement and to determine what additional steps need to be taken.”

Incentivise to inspire

One way of showing authentic, tangible recognition to staff in a bid to help them up their game is through rewards. Try incentivising your teams when they meet deadlines and goals – rather than simply chastising them when they’re down.

“Awards are a great way to recognize great achievement within the workplace,” added Caldwell. “Providing incentives to all employees to meet certain targets or expectations is a great way to encourage great performance. Offering rewards to employees who are over preforming is an effective way to encourage the employee to continue doing the great work they are doing. Recognizing and appreciating good work keeps staff feeling motivated and valued.”

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