Employment Law

5 common myths about Performance Management, Discipline and Termination

1. Employees know their job, so they don’t need performance reviews or performance management

No matter how well your employees know their job or how well they perform, it is always essential for you to personally keep track of their performance. When they know that their work will be reviewed from time to time, the quality of work increases, and the employees strive harder to meet the organisational goals

2. Performance Management only takes place once or twice a year

When dis­cussing per­for­mance man­age­ment, many peo­ple imme­di­ate­ly think of the annu­al per­for­mance review process. But the per­for­mance appraisal is only one com­po­nent of what is con­sid­ered to be per­for­mance man­age­ment.

Per­for­mance man­age­ment is the con­tin­u­ous process of improv­ing per­for­mance by set­ting indi­vid­ual and team goals which are aligned to the strate­gic goals of the organ­i­sa­tion. It is a process of reviewing and assessing the progress of individual staff and teams of staff and providing direction and coaching to maximise the outcomes of each staff member. For those who aren’t performing it is a vital tool to assess whether they are suited to the role or organisation and can be pivotal in exiting them from the business if required.

A key point here is that per­for­mance man­age­ment is a con­tin­u­ous process — not a once-a-year activ­i­ty. Qual­i­ty per­for­mance man­age­ment should, there­fore, bring togeth­er a num­ber of dif­fer­ent, inte­grat­ed activ­i­ties to form an ongo­ing​ ‘per­for­mance man­age­ment cycle’.

It is often the responsibility of Human Resources to present the business case for performance management to senior management and to explain why it should have a year-round focus. Human Resources are also faced with the need to ensure that line managers are committed to playing their part in such culture change in order to achieve the right business outcomes.

Yet, despite the initial resistance, those organisations that adopt the approach of regular and consistent performance management processes report not only better performance outcomes and higher productivity, but also staff who are eager to attend performance discussions and are keen to receive feedback.

The more fre­quent and pre­cise the feed­back, the bet­ter indi­vid­ual per­for­mance. It’s that sim­ple. Employ­ees want reg­u­lar insights into their work and the bet­ter-informed employ­ees are regard­ing their per­for­mance, the bet­ter able they are to improve and excel.

For organisations that have adopted a year-round approach to performance management, the benefits far outweigh the time and resources required to deliver this approach to staff management.Verbal warnings do not need to be documented

3. Verbal warnings do not need to be documented

The term verbal warning refers to the process of providing direction and/or discipline to an employee via a conversation rather than in a written format.

Verbal warnings like all processes relating to employees should be documented. If there is no record of verbal warnings it is very difficult to prove at a later date that the employee had been counselled about the issue.  Managers should always document a verbal warning in some manner, and it is also a good idea to communicate those warnings once documented with senior management. Documentation can take the form of a file note in the employees personnel file, or in a shift report or manager’s log or even e-mailing themselves the specifics about the verbal warning (which creates a great time-stamped record that is excellent evidence should there ever be any litigation concerning a termination). What ever means is used to document the warning, it is important to note the date, time, any witnesses, the nature of the issue, the response from the employee and the agreed resolution to the issue.

4. Employees have to sign disciplinary documentation

Some employers do not think a warning for an employee is valid unless the employee signs the warning, however this is not strictly true. 

While it is a good policy to have some system that proves the employee was presented with the warning, there is no required that the employee sign the document.  Quite often the employee will refuse to sign such documents because they do not agree with them and are concerned that acknowledging the document by signing it is an admission of guilt. The employer is then left concerned that the lack of signed documentation leaves them exposed to an argument from the employee about the validity of such documents and whether they ever received it.

To alleviate this, you can include a line on the document that states something to the effect of ‘the employee does not necessarily agree with the warning contained herein, but is signing the document only to acknowledge receipt’.  Another method to avoid the argument that the employee never received the written warning is to email the warning documentation to the employee which creates a great record of when the warning was prepared and sent to the employee. It is important to note that the warning documentation should be given to the employee in person to ensure the employee is able to have a discussion about it if they wish, then you can follow up with the email copy to create your paper trail.

5. Termination by text message is an acceptable means to dismiss an employee

Given mobile phones and text messaging are a part of our daily lives, it is not surprising that, from time to time, there is a temptation to avoid “difficult” conversations about a decision to dismiss an employee by pressing the send button on an SMS.

However, the Fair Work Act 2009 (Cth) requires that a dismissal be communicated in writing in order for it to be effective (s 117(1)).

Yet, the courts have also made it clear that ‘in writing’ includes a text message – so therefore what is the problem?

Dismissal by text message is generally – but not always – indicative of a lacklustre disciplinary process, resulting in the employee not being afforded procedural fairness or a proper opportunity to defend their employment. The expectation of a fair process can result in dismissal by text message being held to unreasonable (Pekaj v AAMG Cleaning Group Pty Ltd [2018] FWC 3401).

Dismissal by text message or telephone call will generally only be considered reasonable where it is impractical for the employee to attend a meeting in person to be notified of the dismissal. This may arise where the decision maker and the employee are separated by significant distance, or if the employee has frustrated all other means of their dismissal being communicated.

A good example is Martin v DecoGaze Pty Ltd where the employee was on leave and about to head overseas. In this case the employer had otherwise ensured procedural fairness by allowing an employee to be heard prior to the decision being made, therefore only communicating the final decision via text message. We would recommend employers still exercise caution in this regard, and even then, dismissal by text message must be at the end of a process by which the employee has already had an opportunity to defend their ongoing employment.

Therefore, it isn’t illegal, however as the case law indicates, it should be avoided. Termination via text message really should be a last resort.

Want more information on Performance Management, Discipline and Termination? Join us for our upcoming seminars where we dissolve more of these myths and provide you with the practical tools to successfully navigate these processes within the workplace.

Karen Arnold

Director

Discipline, humanresources, myths about performance management, Performance Management, termination

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