01

Work & family

02 Consultation & cooperation in the workplace 03 Use of individual flexibility arrangements 04 A guide for young workers 05 An employers guide to employing young workers

Best Practice Guide Managing underperformance

06 Gender pay equity 07 Small business & the Fair Work Act 08 Workplace privacy 09 Managing underperformance 10 11 Effective dispute resolution Improving workplace productivity in bargaining Parental leave

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Working at best practice

Employerswhoworkatbestpracticebenefitfrom motivatedstaffthatareperformingattheirbest.These employersalsounderstandthatwhenissuesconcerning underperformancearenotaddressedandmanagedboth appropriatelyandsensitively,itcanleadtounhealthyand unproductiveoutcomesthatmayaffecttheentireworkplace. ThisBestPracticeGuidehelpsexplainwhatismeantby underperformanceandwhythishappens.Itsetsout aneasytofollowfive-stepplantohelpemployers andemployeesaddressandmanageissues aboutunderperformance. Thereisalsoachecklisttoassistbestpracticeemployers. Thisguideillustratesbestpracticewhenitcomesto managingunderperformance.Forspecificinformation regardingyourminimumlegalobligations,contactthe organisationslistedundertheFormoreinformation sectionattheendofthisguide.

Why work at best practice?

Establishingeffectiveperformancemanagementsystems canhavesignificantbenefitsforyourbusiness,asitcan leadtohappier,moremotivatedandbetterperforming employees.Reviewing,refiningandimplementing performancemanagementsystemsarewaysofhelping achievethesesignificantbenefits.

What is underperformance?
Underperformanceorpoorperformancecanbeexhibited inthefollowingways:  unsatisfactoryworkperformance,thatis,afailure toperformthedutiesofthepositionortoperform themtothestandardrequired  non-compliancewithworkplacepolicies,rulesor procedures  unacceptablebehaviourintheworkplace  disruptiveornegativebehaviourthatimpactsoncoworkers.

Fair Work Ombudsman

Best Practice Guide Managing underperformance

Underperformanceisnotthesameasmisconduct. Misconductisveryseriousbehavioursuchastheftor assaultwhichmaywarrantinstantdismissal.Incases ofmisconductemployersshouldseekspecificadvice abouthowtoproceedbeforetakinganyaction.

Helpful hints
Dealingwithunderperformancecanbechallenging andconfrontingforemployeesandemployersalike, butitdoesneedtobeaddressed.Managersneedclear procedures,organisationalsupportandthecourage andwillingnesstomanagetheissue. Providetrainingtomanagersonhowtohandle underperformanceissues.Itmaybehelpfultoinclude roleplayworkshopsinthetrainingmaterialsothat managerscanlearnhowtoapproachmattersinreallifescenarios.Welltrainedmanagersarebetterableto identifyandaddressissuesofunderperformance. Ifperformanceproblemsarise,itiscrucialthatthey beresolvedearly.Thelongerthatpoorperformance isallowedtocontinue,themoredifficultasatisfactory resolutionbecomes,andthemoretheoverallcredibility ofthesystemmaysuffer. Noteveryunderperformanceissueneedsastructured process.Exploreotheroptionsforimprovingperformance, suchastheuseofcontinuousfeedback. Rememberthatforperformancemanagementtobe successful,thecultureofthebusinessshouldbe onewhichencouragesongoingfeedbackand discussionaboutperformanceissuesinopen andsupportiveenvironments.

What are the reasons for underperformance?

Therearemanyreasonswhyanemployeemay performpoorly.Someofthecommonreasonsinclude:  anemployeedoesntknowwhatisexpected becausegoalsand/orstandardsorworkplace policiesandconsequencesarenotclear(orhave notbeenset)  interpersonaldifferences  thereisamismatchbetweenanemployees capabilitiesandthejobtheyarerequiredto undertake,ortheemployeedoesnothavethe knowledgeorskillstodothejobexpected ofthem  anemployeedoesnotknowwhethertheyare doingagoodjobbecausethereisnocounselling orfeedbackontheirperformance  lackofpersonalmotivation,lowmoraleinthe workplaceand/orpoorworkenvironment  personalissuessuchasfamilystress,physical and/ormentalhealthproblemsorproblemswith drugsoralcohol  culturalmisunderstandings  workplacebullying. Underperformanceshouldbedealtwithpromptly andappropriatelybyanemployer,asemployees areoftenunawaretheyarenotperformingwell andsoareunlikelytochangetheirperformance. Bestpracticeemployersunderstandthatissuesthat arenotaddressedpromptlyalsohavethepotential tobecomemoreseriousovertime.Thiscanhavea negativeeffectonthebusinessasawholeasitcan affecttheproductivityandperformanceofthe entireworkplace.

How to manage underperformance

Aclearsystemformanagingunderperformanceisgood forbothabusinessanditsemployees. Bestpracticeemployersareawarethatineffective performancemanagementcandramaticallyreduce thelevelofperformanceinaworkplace.Employees thatperformwellcanlosemotivationiftheyhaveto carrytheburdenofpoorperformingcolleagues.Also, mostemployeeswhoarenotperformingwellwould liketoimprove. Negativeattitudestoperformancemanagement,ora lackofcredibilitywiththeprocess,canbeanindication ofaninadequateperformancemanagementsystem. Aconsistentapproachtoperformancemanagement providesopportunitiestoaddressproblemsand generateeffectivesolutions.Asuccessfulperformance managementprocessisonethatsupportstheworkplace cultureandisacceptedandvaluedbyemployees. Hereisaneasytofollowstepbystepguidetomanaging underperformance.

Theemployershouldlettheemployeeknowthepurpose ofthemeetinginadvancesotheycanadequately prepareforthemeeting. Theemployeeshouldbeallowedtobringasupport personoftheirchoiceoraunionrepresentativetothe meeting.Employersworkingatbestpracticewillinform theemployeethattheycanbringasupportpersonasa matterofprocess.

Step 3 Meet with the employee to discuss the problem

Itisimportantthatthemeetingtakesplaceinprivate andinanenvironmentthatiscomfortableandnonthreatening,awayfromdistractionsandinterruptions. Theemployershouldbeginbyholdingadiscussionwith theemployeetoexplaintheprobleminspecificterms. Fromthisconversation,theemployeeshouldbeableto clearlyunderstand:  whattheproblemis  whyitisaproblem  howitimpactsontheworkplace,and  whythereisaconcern. Theemployershoulddiscusstheoutcomestheywishto achievefromthemeeting. Themeetingshouldbeanopendiscussionandthe employeeshouldhaveanopportunitytohavetheirpoint ofviewheardanddulyconsidered.Theemployershould listentotheexplanationofwhytheproblemhasoccurred ortoanyothercommentstheemployeemakes. Whenhavingthistypeofmeeting,itmaybeusefulin facilitatingdiscussiontorefertorecentpositivethings thattheemployeehasdonetoshowthemthatyoualso recogniseandappreciatetheirstrengths.

Step 1 Identify the problem

Itisimportanttounderstandthekeydriversof performanceorunderperformancewithintheworkforce. Itisalsoimportanttocorrectlyandspecifically identifytheproblem.Somecommonreasonsfor underperformanceareidentifiedlaterinthisguide.

Step 2 Assess and analyse the problem

Theemployershoulddetermine:  howserioustheproblemis  howlongtheproblemhasexisted,and  howwidethegapisbetweenwhatisexpectedand whatisbeingdelivered. Oncetheproblemhasbeenidentifiedandassessed,the employershouldorganiseameetingwiththeemployee todiscusstheproblem.

Fair Work Ombudsman

Best Practice Guide Managing underperformance

Keypointsforemployerstorememberwhenholding themeetingareto:  talkabouttheissueandnottheperson  explorethereasonswhythereisanissue  clarifydetails  stayrelaxedandencouraging,and  summarisetocheckyourunderstanding ofthesituation. And,whendiscussingshortfallsinanyarea,itis importanttocheckthattheemployee:  isawarethatitisataskthatisrequiredofthem  hasbeenshownwhatisrequired,and  understandsthegapbetweenwhatishappening andwhatisrequired.

Aclearplanofactionshouldbedevelopedwiththe employeetoimplementthesolution.Thiscanbein theformofaperformanceagreementoractionplan. Aperformanceagreementoractionplancan:  reflectanunderstandingofperformance expectationsandwhatistobeachievedoverthe specifiedtimeperiod(performanceimprovement milestones)  clarifyrolesandresponsibilitiesoftheemployee  includestrategiesfortrainingandcareer development  includetimeframesforimprovement(thesemayvary dependingontheissueandneedsofthebusiness, howeveritisimportanttogiveanemployee adequatetimetoimprovetheirperformance)  reinforcethevalueandworthoftherole beingperformed. Adateshouldbesetforanothermeetingwiththe employeetoreviewprogressanddiscusstheemployees performanceagainsttheagreedactionplan. Theemployershouldkeepawrittenrecordofall discussionsrelatingtounderperformanceincasefurther actionisrequired.Generally,itmayalsobeusedas evidenceiflegalactionistakenaboutthematter.

Step 4 Jointly devise a solution

Wherepossible,itisimportantthatasolutionisjointly devisedwiththeemployee.Anemployeewhohas contributedtothesolutionwillbemorelikelytoaccept andactonit. Whenworkingoutasolution,theemployershould:  exploreideasbyaskingopenquestions  emphasisecommonground  keepthediscussionontrack  focusonpositivepossibilities,and  offerassistance,suchasfurthertraining, mentoring,flexibleworkpracticesorredefining rolesandexpectations.

Helpful hint
Whendevisingasolution,makesureitisclearand easytofollowanddoesnotrelyonperformancemanagementspeak.Useeverydaylanguagetoavoid alienatingbothmanagersandemployees.Forexample, iftermssuchasKPIs(KeyPerformanceIndicators) arentpartofeverydaylanguage,dontusethemin performancediscussionsandagreements.

Step 5 Monitor performance

Theemployershouldmonitortheemployees performanceandcontinuetoprovidefeedback andencouragement. Ameetingtoreviewanddiscusstheemployees performanceshouldbeheldevenifthereisnolongeran issue.Thisenablesbothpartiestoacknowledgethatthe issuehasbeenresolved.Theemployershouldprovide bothpositiveandnegativefeedbacktotheemployee andshouldworkwiththeemployeetoensurethat performanceimprovementsaresustained. Moreseriousactionmayneedtobetakenifthe employeesperformancedoesnotimproveincluding furthercounselling,issuingformalwarningsand ultimatelyiftheissuecannotberesolved,termination ofemployment.

Thespecialarrangementsthatapplytoemployerswith fewerthan15employeesare:  employeeswillneedtohaveworkedforthebusiness for12monthsinordertobeeligibletomakeaclaim forunfairdismissal,and  ifasmallbusinessemployerstrictlyfollowstheSmall BusinessFairDismissalCodeandthedismissalof theiremployeeisnotharsh,unjustorunreasonable, thenthedismissalwillbedeemedtobefair.Itis bestpracticetofollowthecodeandfillouttheSmall BusinessFairDismissalCodeChecklistatthetime anemployeeisdismissedandyoushouldkeepthe Checklistwithyourrecordsasitwillassistyouifan employeemakesanunfairdismissalclaim.Alinkto thecodeandChecklistisavailableattheFormore informationsectionattheendofthisguide. Youshouldalsoensurethatyouprovidetheemployee withtheirentitlementssuchastheirnoticeoftermination andanyannualleavethattheyhaveaccrued.Formore informationontheentitlementsyoumayoweafter termination,visitwww.fairwork.gov.auorcontactthe FairWorkInfolineon131394.

Termination of employment
Ifanemployeesperformancedoesnotimprovetoan acceptablestandard,terminationoftheiremployment maybeanoption. Employerscannotdismisstheiremployeesin circumstancesthatareharsh,unjustorunreasonable. Whatisharsh,unjustorunreasonablewilldependon thecircumstancesofeachcase.However,itisimportant tobefairtoemployeesparticularlywhenitcomesto terminationofemployment.Theyshouldbegiven reasonsfordismissalandanopportunitytorespondto thosereasons. Importantly,employerswithfewerthan15employees (basedonasimpleheadcount)willbecoveredbyspecial dismissalarrangementswhicharedifferenttothosethat applytolargerbusinesses.

Common performance issues

Thefollowingtable(overleaf)providesasummaryof commonissuesfacedbyemployersandemployees whenmanagingperformanceandidentifieskeyways toimproveperformancemanagementsystemsin theworkplace.

Fair Work Ombudsman

Best Practice Guide Managing underperformance

Common performance issues

Issue Employee does not undertake work as required, showing signs of apathy and laziness Employee does not appear to understand job requirements or directions Possible causes
 Jobcontent&design  Inappropriatejobfit  Personalorexternal issues   

Actions
  Beginwithinformalperformancediscussion Beclearabouttheperformancerequirements andexpectedcontributionoftheroletothe workofthebusiness Focusoninterestinworktasks,andhowthey mightbeimproved Exploreoptionsforopportunitiesinotherareas ofthebusiness,ifpossible Refertocounsellingserviceifpersonal circumstancesareimpactingperformance Beginperformanceimprovementprocess startingwithinformaldiscussionsaround whatisrequiredintheposition.Look atpossibleoptionsfortrainingand developmentifaskilldeficitisidentified Commenceformalperformancemanagement processifnoimprovementforthcoming Re-establishexpectedoutcomes,use evidenceofhowperformancehasfailedtomeet expectedstandards,explaintheimpactofthis onthesuccessofthebusiness Ifnecessarycommenceformalperformance managementprocess

Employee will not follow directions or perform tasks as required

 Failuretounderstand whatisrequired  Inabilityto performtasks  Personalissues

Employee fails to acknowledge they are underperforming

 Performanceissueshave notbeenadequately explained  Processhasnotbeen adequatelyapplied  Employeedoesnot acceptmanagement assessments

Employee does not complete work tasks to the required standard

 Lackstherequiredskills andcapabilities

Identifytraininganddevelopment opportunitiesaspartofperformance improvementplan Ifemployeefailstodeveloprequiredskills, progressthroughperformancemanagement processtopossibleoptionssuchas reassignmentofduties,ortransfertoanother areatoachieveabetterjobfit(ifpossible) Reviewrecruitmentpracticestoensure appropriateselectiondecisionsarebeingmade

Employee is cynical of work environment and tasks, bringing negative opinions to the work environment

 Hasbecome disillusionedwith workenvironment  Failstounderstand valueofworkbeing undertaken

Establishteamculturebasedonrespect andsupport Re-establishroleoftheposition,andthevalue ofoutcomesdeliveredbytheorganisation Ifpossible,exploreopportunitiesforcareer transitionandmovement Identifycausebehindabsenteeism Explorepossiblestrategiesforjobredesign, jobfit,changestoworkingarrangements, managementofhealthissues Re-establishexpectationsofattendance

Employee is regularly absent without cause

 Jobcontent&design  Inappropriatejobfit  Managementstyle  Personalor workplaceissues

 

Checklist for employers when managing underperformance

 Ensureemployeesclearlyunderstandwhatis expectedofthem Clearlyidentifyandthenassesstheproblem Organiseameetingwiththeemployeetodiscuss theproblem Givetheemployeetimetoprepareforthemeeting Allowtheemployeetobringasupportpersonto themeeting Conductthemeetinginaprivate,non-threatening, comfortableandquietlocation Defineandexplainyourconcernstotheemployeein specificterms Givetheemployeeagenuineopportunityto respondbeforeconsideringyouractions

Deviseasolutionwiththeemployeetoimprove performance

 

 Developanactionplanwhichincludesperformance improvementmilestonesandtimeframesfor furtherreview.  Scheduleanothermeetingtoreviewtheemployees performanceagainsttheagreedactionplan Documentalldiscussions,includingactionsto betaken Monitortheemployeesperformanceandcontinue toprovidefeedback

 

 Followanystepssetoutinanapplicableindustrial instrument(suchasamodernawardorenterprise agreement),theemployerspoliciesandprocedures andtheemployeesemploymentcontract concerningperformancemanagement  Forsmallbusiness,knowandcomplywiththeSmall BusinessFairDismissalCode(availablethroughthe FairWorkwebsiteseeoverleaf).

 Whereanemployeesperformanceissufferingdue totheemployeespersonalcircumstances,referthe employeetoprofessionalhelporcounselling  Clearlyoutlinetheimprovementrequiredandthe consequencesofcontinuedpoorperformance

Fair Work Ombudsman

For more information mo in

Fair Work Ombudsman

131394 www.fairwork.gov.au

Fair Work Australia

1300799675 www.fwa.gov.au

Download the Small Business Fair Dismissal Code & Checklist

www.fairwork.gov.au/termination /small-business-fair-dismissal-code

Calculate whether your business is a small business

www.fwa.gov.au/documents/dismissals /definition_small_business.pdf

Disclaimer FairWorkOmbudsmaniscommittedtoprovidinguseful,reliableinformationtohelpyouunderstandyourrightsandobligationsunder workplacelaws.Itisyourresponsibilitytocomplywithworkplacelawsthatapplytoyou.Theinformationcontainedinthispublication is:generalinnatureandmaynotdealwithallaspectsofthelawthatarerelevanttoyourspecificsituation;andnotlegaladvice. Therefore,youmaywishtoseekindependentprofessionaladvicetoensureallthefactorsrelevanttoyourcircumstanceshavebeen properlyconsidered.ProducedDecember2011.FWOBPG9a. CommonwealthofAustralia2011

Fair Work Ombudsman 13 13 94 www.fairworkgov.au