Performance issues need to be dealt with to ensure they do not harm team, customer, and employer relationships and have negative impacts on the organisation.

Failing to handle them correctly can prove costly to employers that end up on the wrong end of a personal grievance claim for unjustified disadvantage, unjustified dismissal, or constructive dismissal.

Compensation awards made by the Employment Relations Authority resulting from deficient, or non-existent, performance processes can be very large. In a recent case, an employee was awarded $23,000, plus two months wages, due to her employer’s failure to follow a proper process.

Often there are genuine poor performance issues that an employer is required to address with an employee. However, a failure to adhere to the required process, and act reasonably, sees employers caught out and facing these grievances on a surprisingly regular basis.

From my experience the 7 most common mistakes employers make are:

1.    Failing to deal with matters early enough…

Delaying dealing with issues just makes them worse. Nipping a problem in the bud early usually gets everything back on track before it becomes a big issue. At the early stage a discussion with the employee may be all that is required. Point out fairly the reasonable standards that are expected, and help the employee get to them.

2.    Failing to undertake a performance improvement process…

A significant number of employers incorrectly try to deal with performance issues as a disciplinary issue, or by a redundancy.

The purpose of a performance improvement process is, not surprisingly, to improve the employee’s performance (not manage them out of the organisation). Many employers miss the point and rather than improve performance, they use it to try to get an employee to leave.

3.    Failing to allow for support persons…

As with the disciplinary and redundancy processes, employees have the right to have a support person or representative help them through the process, and be present and speak for them during performance meetings. This is often a basic detail overlooked by employers.

Support persons are important as the process can be stressful, and people are not all capable of putting their points across well, or remembering what was discussed or agreed.

Failing to advise of the right to a support person, or disallowing a support person to be present, makes the process unfair, and the employer vulnerable to a grievance.

4.    Failing to record the outcomes of meetings…

During any meetings notes should be taken about what was discussed, and what the employee and employer have agreed to do in order to rectify the performance issues.

This includes what the performance issues are, what the employer’s expectations are, and how the employer will support the employee in achieving this expectation. Additionally, all details of the meeting should be noted, such as time, date, attendees, location and reason for the meeting.

Failing to record these details means that proving what was said, and the expectations laid down, may not be possible. Put it in writing and give a copy to the employee.

5.    Failing to provide support or training…

The aim of the performance process is for employers to air concerns with employees, and provide them with assistance to meet their expectations. It is not sufficient to simply inform an employee that their work is not up to standard and that they are to improve.

Assistance must be given to a struggling employee to help them meet expectations. This may include training courses, mentoring by senior staff, providing examples of the standard of work expected, and other resources related to performance of their role.

It is critical that employers provide employees sufficient support and training during the process in order to reach the standard that is reasonably required of them.  

The process is to improve performance. If that happens then the aim has been achieved, so put the effort and resources in to help the employee get to the required standard.

This does not mean you have to train employees in skills they claimed to have when they were hired (unless you want to). Dealing with untrue claims to experience and skills is a disciplinary issue.

6.    Failing to measure and document progress…

Fixing performance issues is not usually achieved overnight. Improvement is likely to occur in stages as additional support and training is provided.

Throughout this process, detailed notes should be kept regarding performance at the beginning, during, and at the end of the improvement process. The notes allow the employer to see whether the employee is improving, what particular areas may need specific attention, or if there has been no progress at all.

Keep the employee informed of progress or lack of progress throughout the process. Do not spring a failure to progress at the last minute, but give them chances to learn and improve as they go along.

If an employer intends to provide a formal warning for poor performance, they have to be able to demonstrate clearly that there has not been sufficient progress despite providing the required support and/or training.

Documenting progress allows employers to determine when employees have successfully met their expectations, and record what the most effective training and support practices are.

7.    Failing to act in good faith…

The requirement to act in good faith is present during all interactions between the employer and employee. This covers all meetings and actions that an employer may undertake (or omit) during the performance process.

Including the failure to provide the adequate support noted above, breaches of good faith may arise when employers do not provide adequate time for the employee to improve, hold unrealistic expectations for their employees (is the standard reasonable?), have inconsistent expectations of one employee to another (how are others judged?), and treat employees unfairly during any meetings (e.g. subjecting them to a one-sided lecture and not allowing them to have their say).

Performance issues are one of the most common employment issues employers encounter. It is vital the performance improvement process is carried out correctly.

Following the process correctly at the right time not only helps avoid grievances, but makes the business more efficient and the employer-employee relationship stronger (and saves on the costs associated with having to find and train up a new employee).

Leading law firms committed to helping clients cost-effectively will have a range of fixed-priced Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.




Alan Knowsley
Employment Lawyer
Wellington