Managing Under Performance

Performance Improvement Plans (PIPs) are a management tool used to assist performance improvement of underperforming employees or those employees who have demonstrated unsatisfactory behaviour and conduct in the workplace.

PIPs should be implemented as a consequence of performance management/disciplinary counselling meetings or informal discussions with employees regarding their performance/conduct deficiencies. A PIP should not be issued to an employee without prior consultation of the worker and an opportunity for both parties to discuss and agree upon performance goals.  

Essential features of PIPs

• PIPs should have a definite time-frame in which the employee’s progress/performance will be re-assessed to determine improvement or underperformance 

• Clear, specific and realistically attainable goals should be emphasised (e.g., employee to sign up 10 new customers per month) 

• Training of employees may be necessary to achieve performance improvement and should be included as a part of the PIP 

• Regular meetings with supervisor to monitor progress towards goal achievement, provide support and ability to modify objectives where appropriate 

• Re-assessment of performance at completion of PIP time-frame and management action accordingly 

• PIPs should always be documented, including any progress meetings and the issues discussed therein and kept by the employer, copies should also be made available to employees for their records.  

Benefits

PIPs are a useful tool for ensuring procedural fairness is observed when managing worker performance and provides benefits for both employees and their superiors. Used as a remedial tool when performance is deemed to be capable of improvement, PIPs provide employees with an opportunity to consciously work on their performance, to learn new skills and prove their commitment to their role and the organisation.  

A PIP combined with a formal disciplinary / performance management process is also used to inform an employee that if their performance does not improve in the designated time-frame, in a specified way, their employment could be at risk.  

For Managers, PIPs allow close monitoring of employee progress against specific standards within a set timeframe. This allows easier decision making in the future and will assist in proving employees have been afforded procedural fairness if further disciplinary action or termination occur due to lack of improvement. 

Importance of Environment

The Fair Work Act does not deal with abandonment of employment. Fair Work refers employers to modern awards or the contract of employment. Where an award or contract of employment is silent, the employer may still have grounds for termination if they can prove that an intention to abandon employment and two key factors are present: 

1. that the employee has made no attempt whatsoever to contact his or her employer; and 

2. the period of unauthorised and / or unexplained absence is sufficient. 

See the Fair Work Commission for further information on Abandonment of Employment. 

Provisions for termination

When setting PIPs, it is important to keep environmental factors in mind as they will likely have an impact on the employee’s performance, albeit if only in a minor way.  

External  

Employers need to be realistic and consider the impacts of external forces when assessing employee’s contribution to organisational performance. Some examples may include:  

• The impact of the exchange rate on organisational performance 

• The state of the national economy 

• The state of the global economy 

• Changes to government policy and funding / subsidies 

• Increased competition 

• Changing customer tastes and preferences 

• Natural disasters and changes in level of supply of inputs 

• Changes to the laws regulating the industry etc.  

Accordingly, employers need to fairly assess the likely cause for the underperformance / behaviour and refrain from taking rash action against employees for factors beyond their control.  

Internal  

Internal environmental factors at an organisational level may also have a bearing on how an employee is performing and/or their behaviour. Some examples may include;  

• New technology 

• Department or organisation restructure 

• Job re-design 

• Redundancies and survivor syndrome 

• Organisational culture 

• Conflict with other staff 

• Lack of clear goals set or misunderstanding of performance expectations.  

Personal Factors 

It is also important to accurately assess the personal circumstances impacting upon an employee’s performance and/or behaviour in the workplace. These factors should all be assessed in the performance management / disciplinary meeting and discussed with the employee.