Conversation 1 of 5 · Fair Work Ombudsman
Managing underperformance: the five steps, in order
The Fair Work Ombudsman’s best practice guide says underperformance should be dealt with straight away, and sets out five steps for doing it: identify the problem, assess and analyse it, meet the employee, agree on a solution, then monitor and review. The first two steps happen before the employee is in the room.
General information, not legal advice. The Fair Work Ombudsman is the official place to check. Its guide also points managers first to any performance process in the award or enterprise agreement, the employee’s contract or the workplace’s own policies.
The sourceFair Work Ombudsman, Managing underperformance best practice guide
What counts, and what doesn’t
In the Ombudsman’s terms, underperformance can mean three things: duties not done, or not done to the standard the job needs; negative or disruptive behaviour at work; and not following the workplace’s policies, rules or procedures.
Serious misconduct is a different matter. The guide describes it as deliberately unprofessional, dangerous or unlawful behaviour, with theft, fraud, sexual harassment and assault as examples, and says it may justify instant dismissal. For ending employment over serious misconduct, its advice is that employers get specific legal advice.
The guide also lists common reasons a person’s work slips, and most of them are not about effort: goals or standards that were never made clear, missing knowledge or skills, not knowing whether they are meeting the mark, low motivation or confidence, personal matters such as family stress or health problems, low morale or a poor work environment, friction between people or cultural misunderstandings, and workplace bullying.
The methodFive steps, in the guide’s order
The five steps
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Identify the problem
Write it down: examples of what is causing the issue, when it happens, why it matters, and how it needs to change. Gather anything that shows the problem, such as business figures, samples of the work or customer feedback, and make copies for the employee.
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Assess and analyse
Weigh how serious the problem is, how long it has gone on, and how far apart the expected work and the delivered work are. Then set up a meeting, telling the employee beforehand what it is about so they can prepare, and sending copies of any documents you will go through.
The employee can bring a support person they choose: a co-worker, family member, friend or union representative. That person is there to support, not to speak or argue for the employee.
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Meet with the employee
Hold the meeting somewhere private and calm, free of interruptions, where others can’t overhear. In the meeting, the guide’s list is to describe the problem with specific examples, explain its effect on the business, the work or co-workers, say what the meeting should achieve, give the employee a real chance to answer, listen and ask questions to understand why it has happened, mention recent things they have done well where you can, and keep the tone relaxed and encouraging, showing confidence that they can improve.
Take notes, then send an email or letter confirming what was said and agreed, giving the employee a chance to suggest changes. Those notes and emails, and other documents about the underperformance, go on the employee’s employment file.
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Agree on a solution
The guide asks manager and employee to work out the solution together. The agreed actions can be written into a performance improvement plan, a document setting out what the employee needs to do to improve. According to the guide, the plan should:
- name the performance or behaviour that needs to change
- say how that will happen, with any support that will be given
- explain what each person is responsible for
- allow a reasonable time to improve
- set a date for a follow-up meeting to review progress against the plan
- where the underperformance is serious or ongoing, state the possible consequences clearly, preferably in writing, if it doesn’t improve.
The manager and the employee each keep a copy.
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Monitor and review
Deliver the training or support that was offered, check in regularly, keep giving feedback and encouragement, and hold the follow-up meeting on the agreed date. How long is a reasonable period to improve depends, in the guide’s words, on the employee’s role and duties.
When the work reaches a satisfactory level, the guide’s step is to say so, acknowledge that the issue is resolved and talk about keeping the improvement going. When it does not, it may be appropriate to keep managing performance or to give a formal written warning, and dismissal may be appropriate if the underperformance continues after a reasonable period. The same guide treats ending employment as a serious step: the employer needs a valid reason tied to the employee’s capacity or conduct and a fair process, which includes telling the employee in writing why dismissal is being considered and giving them a reasonable chance to respond, and skipping these steps can lead to a successful unfair dismissal claim. Employers with fewer than 15 employees, counted by simple headcount, are covered by special dismissal rules, including the Small Business Fair Dismissal Code.
The managerWhat the guide asks of the person running the process
Where the manager needs support
The guide is frank that this work is hard on both sides. It says managers need clear procedures and support from the organisation, and also the courage and willingness to take the issue on. Its list of things that help managers includes training on handling underperformance, ideally with role-play so a manager can practise the conversation, along with performance policies, templates and reminders before review dates.
Coaching appears in the guide too, as one of the ways to build an employee’s skills and performance, alongside training and mentoring. The guide also puts prevention first: a simple performance system of clear goals, regular feedback and reviews every few months makes underperformance less likely to start.
The Ombudsman’s templates
Under “Managing performance”, the Fair Work Ombudsman’s templates page lists, among others:
- a performance improvement plan
- an underperformance meeting plan
- initial-steps and formal-steps checklists for managing underperformance
- a warning letter template and checklist.
Underperformance often sits beside other rules a manager carries. Among the actions the guide suggests for an employee who is regularly absent without cause is exploring changes to working arrangements, which is where a formal request for flexible work may come in. And because personal matters such as family stress are on its list of causes, a manager may meet family and domestic violence leave in the same conversation.