How to properly dismiss a poor performing employee

Performance improvement plans are designed to keep workers on track and avoid the hassle – and heartbreak – of being terminated for missing their targets.

A performance issue arises when the worker in question fails at one of their job requirements or to perform them according to standards outlined in their job description or employment contract.

Documenting performance
Employment New Zealand advises employers to compare performance results and deliverables against certain metrics as well as the 1) terms and conditions of the employment agreement and 2) workplace policies when conducting an intervention.

Some metrics managers can look into include the speed, quality and efficiency of the employee’s performance and their attitude and behaviour at work.

Managers should ensure the employee is aware of the policies and procedures needed to perform their job well, and that the employee has been trained and understands their duties.

“Where the concern relates to a behavioural issue,” Employment New Zealand writes, “make sure that the employee is aware of what the acceptable behaviour for the workplace is.”

Before reviewing performance with a critical eye, it is best to have systems – such as a proper feedback process and policy training – in place.

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Periodic development chats, even when performance is going well, can guide workers further by chronicling and recognising their milestones and areas for improvement.

One common mistake that employers commit during performance reviews is their failure to document and share the results of the meetings and performance improvement plan with the concerned employee, the Ministry of Business, Innovation and Employment notes.

These reports can also serve as evidence for any decision to terminate the employee should they fail to deliver on their promise to improve.

For employment lawyer Matthew McGoldrick: “Always question whether you have legal obligations to meet rather than simply going straight to termination.”

But when all other forms of informal and formal intervention fail and all other resources have been exhausted, employers will need to look into the possibility of dismissal as the last resort.

How can companies terminate a non-performing employee legally?
An employee is dismissed fairly if they have been given “a reasonable opportunity to improve their conduct prior to the employment relationship being terminated,” workplace relations specialist Employsure writes.

Employment law in New Zealand requires employers to issue a written explanation detailing the grounds for termination.

Managers should cite specific instances of the employee’s poor performance and how these measure against the standards, policies and requirements set during formal/informal intervention.

The notice should also detail the duration of the performance improvement plan; frequency of updates and warnings issued throughout the period; and whether the employee took concrete steps to meet the requirements.

What is certain throughout the performance improvement process is that employers must first equip workers with the proper training and tools to succeed at their job and to give them ample time to refocus on their targets before taking any drastic measure.

“One of the things we see is employers jumping the gun,” McGoldrick said. “They will need to consider whether it’s appropriate that warnings are given as first port of call rather than moving to termination at the end of a performance review process.”

“The test would be to consider what a fair and reasonable employer would do when assessing your organisation’s processes.”

The HRD Employment Law Masterclass – Auckland offers professionals an opportunity to learn more about the intricacies of employee dismissal. The masterclass includes a workshop on ‘How to successfully exit non-performers quickly and with dignity.’ Reserve a seat now.