Performance Management – Getting It Right

What to keep in mind

With New Zealand’s unemployment rate rising to 4.3%, businesses continue to face challenges in the labour market. Despite the tight job market, businesses need to protect themselves from underperforming employees or those not meeting their contractual obligations. Equally, employees have the right to be shielded from performance-related discussions when expectations have not been clearly communicated.

We know that there are steps to be followed when employing someone, specifically negotiating the job offers, in order to meet legal obligations. Click here to learn more about this and the things to be aware of.

Similarly, following a fair process is key when managing performance, and when in doubt, seeking guidance is advisable to ensure the rights and obligations of all parties are respected when considering employee termination. Getting the process wrong is likely to be more expensive in the long run, than engaging a professional.

Below is a streamlined guide for handling performance-related discussions effectively and safely, but keep in mind this is a guide only and may require customisation based on the specific business and individual situation.

Identify and Clarify Issues:

  • Review the Employee’s Position Description: Confirm the performance standards expected.
  • Check Employment Agreement Clauses: Understand what the agreement states about poor performance.
  • Follow Established Processes: Ensure you adhere to any formal processes and keep them updated.
  • Assess Performance Thoroughly: Identify where the employee is failing, meeting, or exceeding expectations.
  • Evaluate Support and Training: Determine if additional support or training is necessary before proceeding with performance management discussions.

Arrange an Informal Conversation:

  • Understanding the root cause of poor performance is essential.
  • An informal conversation can help uncover issues such as miscommunication, personal problems, or lack of resources.
  • Emphasize that this discussion is not about assigning blame but about mutual discovery.
  • If the employee feels uncomfortable, offer them the option to bring a support person.

Document the Informal Meeting:

  • Always take notes during these discussions and share them with the employee.
  • If issues remain unresolved, it might be necessary to move to a formal process.
  • It is of the utmost importance that this is informal and no formal action is taken in this meeting.

When a formal process is needed, follow these steps:

  • Request a Meeting in Writing: Use a letter or email.
  • Specify the Meeting’s Purpose: Discuss their performance.
  • Provide Relevant Information: Include performance appraisals, contract clauses, policies and any relevant processes or training information.
  • Inform Them of Their Right to Bring a Support Person: This helps ensure fairness.
  • Allow Sufficient Notice: Give at least 2 days’ notice and be flexible with scheduling.

Conducting the Formal Meeting:

  • Take detailed notes and ensure the employee understands their performance against the standards.
  • Allow them to respond and consider any contributing factors they mention.
  • Agree on the next steps, which could include additional training or a performance improvement plan (PIP).

Draft a Performance Improvement Plan (PIP):

  • The PIP should clearly outline acceptable performance standards, support measures, and milestones with specific dates.
  • Regular monitoring and feedback are essential to help the employee improve.
  • Don’t rush this part of the process as section 4 of the Employment Relations Act 2000 requires both parties to act in good faith and to be responsive and constructive in maintaining the employment relationship.

Reviewing Progress:

  • Regularly review the employee’s progress.
  • If performance has not improved sufficiently, consider starting a formal performance review hearing.
  • Provide the employee with a written letter before the hearing, and ensure they understand their rights under employment law.
  • Ensure they have access to all the relevant information on which a decision could be made and time to comment.

Deciding on Termination:

  • If termination becomes necessary, ensure it is handled correctly.
  • It should be based on procedural fairness by ensuring the employee has access to all the relevant information, are given sufficient opportunity to comment and that all their circumstances are taken into consideration.
  • Seek expert assistance to get this process right, as it’s critical for the well-being of both the business and the employee.

Final Thoughts
No single approach to managing performance fits all situations. Each instance requires a tailored approach based on specific facts. By following the outlined process, you’ll give your employees a fair chance to improve while protecting your business and maintaining a reputation as a fair and compassionate employer. For detailed guidance, reach out to HR and Employment Relations specialists like Teamphoria. This approach not only supports your employees but also strengthens your business practices and reputation.