How to get rid of underperforming employees the legal way

Jeremy Streten


written on November 7, 2017

The steps you need to follow to get this special kind of dismissal right.

So you have an employee who isn’t up to scratch and they are costing your organisation money. How can you dismiss this person gracefully, and most important, legally?

Dismissal for reasons of underperformance is a special kind of beast, more complex than terminating employment for inappropriate behaviour, fraud or theft.

Essentially, you’re saying that the performance of the employee is poor, that you see no room for improvement, and that it’s time for them to go. But given the somewhat subjective nature of “performance”, this kind of dismissal is open to abuse by employers who want to use it as an excuse to rid themselves of an employee for other reasons.

There’s also a common misconception that a “three strikes and you are out” policy is how performance based dismissals are managed. While this might be a good rule of thumb, it’s by no means a hard and fast rule. Let’s take a look and what you should and shouldn’t do.

The first step

If you have a staff member who isn’t delivering, then you need to start by having a conversation with them about their lacklustre performance. You should offer that they can have a support person present in any meeting that you have, although it’s not compulsory. Make it clear in the meeting that if their conduct doesn’t improve, you may have to dismiss them. Ensure that this notice is in writing. Post meeting, have the employee think about how they’re going to improve, and then both parties should sign an improvement plan to set the employee back on track. Often this type of conversation will improve performance for some time and it can sometimes be a permanent fix.

What if you see no improvement?

If the conduct continues or comes up again then you need to take further action. This is the hardest but also the most important. You need to regularly follow up with the employee to make sure they’re complying with their improvement plan. If their performance still doesn’t improve, then the employee should be presented with a formal written warning. If you fail to follow this process, the employee has grounds to say that they had no idea there was a problem, or that the problem was resolved. You should never assume that they know there’s a problem. Staring daggers and the cold shoulder won’t help you here. The quicker you take action, the faster it will be resolved. You may have to repeat this process on a number of occasions.

Termination of employment

If, after several attempts at improved performance, the employee hasn’t complied with the improvement plan, you can then terminate their employment. You might get lucky and the employee realises they can’t match the requirements of the job and they leave first.

But if they don’t make the hard decision for you, it will be up to you whether you want to keep the employee on and how many chances you give them. Whatever you choose to do, make sure you document the process, including all conversations about the matter. That way you have the evidence of what transpired if the employee attempts to say that their dismissal was unlawful.

Jeremy Streten is a lawyer and the author of the amazon best seller “The Business Legal Lifecycle”.

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5 thoughts on “How to get rid of underperforming employees the legal way

  1. Although the article provides good general advice, using ‘conduct’ as a synonym for ‘behaviour’ is erroneous. Conduct is a separate matter to underperformance, and dealt with by a different process.

  2. In my experience the use of performance improvement plans generally fails to deliver improved performance. An improved approach I have applied for many years is to focus on and solved the management problem caused ‘poor performance’.

    Interestingly while conduct and behaviour are different, by focusing on the management problem, the same process can be used to address both types of issues.

  3. The first step is to provide any employee new to a role or a business with clarity about what the required performance standards are with both the deliverables in the role and behaviour/conduct – both are aspects of performance (it isn’t just about what we do, it is also about how we do it).
    The second is to ensure that the employee is equipped with the resources and relationships needed to perform the role effectively.
    The third is to provide the employee with the knowledge and skills to perform the role in the way that you want them to, delivering the required outcomes.
    The fourth is to have regular catch ups with the employee to discuss how the employee is going (with the role and behaviour/conduct) and to progressively develop and work to an individual performance and development plan.
    The best way to head off performance problems is to equip the person to succeed and continuously support them in doing that.
    If there are problems, you catch them early by having regular conversations. You also establish a great base of evidence if you have to then initiate formal action towards termination of employment.
    Additionally, through such a proactive approach, there is a far higher likelihood that someone who is not a fit with a role or a business will come to realise that and move on of their own accord.

    1. Thank you, Peter. Too many times, the apparent failing of the individual is seen as ‘their fault’. Further consideration of the related matters – skills, standards, supervision, relationships – are not peripheral items but crucially related to the satisfactory performance of the role.

      Great comment.

  4. There is an additional first step – rule out the reason for under performance being the organisation’s fault, ie lack of training, supervision, wrong job for employee, poor technology, working environment. Then when that is pushed aside then consider personal circumstances, eg family/personal issues where an EAP might help. When all of this is dealt with, then deal with the employee through warning etc. It is likely that previous issues, rather than personal slackness, are the cause of underperformance for many employees.

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