Employment Law: Performance Management

The Legal Analysis vs. the Practical Analysis

 

One of the most difficult parts of a manager’s job is addressing performance issues with the employees that report to them. Very few managers are good at it. Because it can be uncomfortable, the task often gets put off. It is not surprising then, that performance issues are tend to worsen to a point where productivity and morale are seriously impacted – often throughout the manager’s entire group, not just the with respect to the employee with the performance issue. When one person’s performance suffers, the manager spends more time dealing with related issues and has less time for her or his own duties. The employee’s coworkers often end up picking up the slack which makes them less effective as well.

 

Many companies have policies and practices of implementing a performance improvement process (PIP) with employees exhibiting performance issues. While these can be useful in limited circumstances, they rarely achieve the desired result. A PIP is intended to be used in circumstances where the employer wants to keep the employee and the employee wants to stay. In the right circumstances they can be successful. One example of this is when an employee with a prior history of strong performance starts to make uncharacteristic mistakes. Often there is something going on behind the scene that caused the change in performance. Raising the concern with the employee early can often lead to disclosure by the employee of the underlying issue, the manager can offer support or resources, and after allowing the employee some time to address the issue, performance returns to normal. Another situation where PIPs can be useful is with new employees in probationary periods. If the employee appears to have all of the necessary skills and education to do the job but is nonetheless struggling to catch on, when a PIP is implemented and appropriate supports are provided, it might turn out that the employee was just reluctant to ask questions or that the training was not as complete as it should have been. These are things that can be easily addressed and will turn a struggling employee into a strong performer.

 

PIPs are rarely used for those purposes though. Much more often they are used by employers in an attempt to build a case to fire the employee for cause. That is a valid legal strategy and if pursued diligently and thoroughly over a reasonable period of time, it can result in a defensible termination of employment for just cause without any obligation to pay severance. Pursuing a PIP for that purpose is rarely practical however.

 

In order to accumulate sufficient evidence of performance issues to justify cause for termination of employment, the manager will need to devote a great deal of time and attention to the employee and provide the employee with additional support resources over a relatively long period of time. The negative emotional impact on all parties and the reduced productivity during the PIP process often exceeds any financial savings that might be achieved in the rare cases where enough evidence is gathered to fire for cause. The more likely result is that the employer will reach a point where they can no longer tolerate the employee in the workplace and ends up firing the employee without cause before the PIP process is complete. In those cases, the employer has paid severance and also lost the productivity over the PIP period.

 

Cases where performance concerns relate to personality differences or a poor fit within company culture are particularly difficult to deal with through PIPs. Endless headaches will be saved if employers learn to cut their losses early in those circumstances and absorb the cost of a without cause termination.

 

Here are some suggestions which can reduce the occurrence of performance issues:

  • put clear policies in place that address the most common workplace issues:
    • workplace harassment
    • absences
    • use of company IT
  • ensure a clear job description is in place for each role
  • make reporting relationships clear and stick to them
  • provide adequate training, resources and support to new employees and to employees moving to new positions
  • have reasonable expectations regarding the amount of work that can be done in the allotted time
  • outline clear targets and deadlines
  • find realistic ways of measuring performance and clearly communicate them

 

If performance issues do come up, we recommend that managers:

  • address concerns early and often – it is easier to have a discussion about a small issue than a big one
  • provide specific, recent examples when raising concerns about performance
  • set out clear and reasonable targets and timeframes for demonstrating improvement
  • keep detailed, written records of performance issues
  • use probationary periods the way they were intended. If an employee does not appear to have the skills needed for the job, act quickly to give some extra support or training. If there is still no meaningful improvement as the end of the probationary period nears cut your losses and terminate without cause.

 

 

CW’s employment lawyers would be happy to help you with any performance management questions you may have.