Checklist for using a performance management system and dealing with potential problems

The following checklist is a guide only and is indicative of the types of steps to follow in dealing with performance management issues. Individual cases may require further specialist advice from your employment or legal advisor. In particular, you need to ensure that you provide the number of warnings required under the employee’s employment agreement or a fair and reasonable number of warnings.

You can also seek further information from the Department of Labour on 0800 20 90 20.

This process can be used for existing employees or for employees recruited on an employment agreement that includes a probationary or trial period.

Problems are best dealt with in the context of a constructive performance management system that establishes expectations, reviews performance regularly, rewards success and deals with problems before they become too big.

Remember that the Employment Relations Act applies a “test of justification” in disciplinary situations and most dismissal situations. Whether a dismissal (or lesser disciplinary action, such as giving a final written warning) is justified, depends on whether your actions and decisions are what a fair and reasonable employer would have done in the circumstances and are consistent with your treatment of other employees in similar circumstances.

STEPS FOR USING A PERFORMANCE MANAGEMENT SYSTEM AND DEALING WITH POTENTIAL PROBLEMS

	CHECK
Check the employment agreement and the problem-solving process in the agreement. For example, be prepared to follow carefully any processes for escalating from verbal to written warnings.
Review the job description, agreed performance indicators, and any statements of company standards. (These are referred to below as the “performance expectations”.)
Either alone or with the person responsible for the employee’s supervision, identify areas where the employee is exceeding, meeting or failing to meet performance expectations.
Confirm that scheduled training and induction has taken place.
Arrange to meet with the employee, saying you will be discussing his or her performance, and offering the opportunity to have a support person or representative present. If the issue is not urgent, this discussion might take place within the regular performance review meeting that you hold, say, every quarter. Record that the meeting has been arranged.
Discuss the employee’s performance, clearly identifying any areas of concern against performance expectations and listening to the employee’s explanations.
Agree on the performance standards to be reached in the future, any training support required and the date of the next performance review. Record the agreement on the employee’s file, giving the employee a copy of what you have agreed.
Do not let the date set for the performance review slip. Ensure you have tracked progress towards reaching the expected performance, and be prepared to discuss this with the employee on the set day.
Arrange to meet and review progress. If you have any performance concerns that may require a warning to be issued, advise the employee that the meeting may result in disciplinary action. At the meeting, agree which performance expectations have been met and any areas that still require improvement. Identify the significance of any areas that are still outstanding. Record the outcome.
Repeat steps 7 to 9 for outstanding areas, until satisfactory performance levels are reached. When this is achieved, advise the employee and record this on the file. Schedule the ongoing performance management that would normally occur within your organisation. Generally, your process will revert to regular performance management processes at this stage. Where the agreed improvement is not reached, the process can be continued as follows. At any stage, if performance reaches the agreed level, you can terminate the procedure in this checklist and revert to standard performance management. If you continue to have concerns, the following actions are required: arrange a meeting, advising the employee that you will be discussing their continuing unsatisfactory performance and that disciplinary action or dismissal is a potential outcome. advise the employee of their right to have a support person present.
If performance is not improving, despite regular discussion and the implementation of an improvement regime, advise the employee of the consequences of a continuation of their current performance. Formally warn the employee that further lack of improved performance may result in dismissal and set the date for the next review. Record the warning and next review date in writing.
If performance expectations have not been achieved by the review date, consider the magnitude of the underperformance against the performance expectations, the opportunities given for improvement, the progress made and the general levels of performance in the organisation. Also review the employment agreement or company policies to confirm the number of opportunities (both oral and written warnings) for improvement the employee must be given. Consider whether the performance gap is significant.
If the performance gap appears significant enough to consider dismissal and you believe the employee has been given sufficient opportunity to improve, review the employment agreement and the notice provisions. Check also for any redeployment obligations in the agreement and consider any redeployment opportunities you may have for the employee.
At the meeting, outline your continuing issues and listen to and consider any response. If you believe the response is unsatisfactory, outline your reasons to the employee.
If redeployment is possible, raise this with the employee and discuss and agree whether this will happen. If redeployment is not possible, give notice of termination in terms no less favourable than under the employment agreement.
Confirm the outcome in writing to the employee.

Also read: What you need to know about: Performance Management

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