Working among exceptional professionals with great humour is wonderful, and contrasts starkly with colleagues of mind-numbing incompetence. For line-managers, hiring is an ongoing challenge with poor performers often gaming the system. The evolving legal landscape complicates dismissals, making them costly and difficult — which also impacts the productivity and career progression of high performers. To combat this challenge, effective performance management requires clear communication, documentation, and strategic planning to navigate the complexities and maintain organisational integrity.Over the years I have been fortunate to work with some truly wonderful people. In addition to being consummate professionals, they have often had a great sense of humour — an essential ingredient to combat with the inevitable tedium of work. If humour be the food of work, laugh on!
Interwoven with these great people have been others of mind-numbing incompetence. Their output has ranged from so bizarre that if it was not problematic it would be funny, to people who are an outright organisational liability.
On the bizarrely funny end of the spectrum was a former colleague who was employed as a System Administrator (technically my team lead at the time though not my line manager). They asked me how to finalise the nightly back up process using the LTO tape system. Once I had shown them the process, they then proceeded to put the tape in the lockbox to send off site. I said, "you should label that before sending it off". To which they asked, "how do I do that?" I replied, "by writing on the tape's label." Holding up a pen, they asked "should I use this pen to do that?" They were let go a week later as this was merely the tip of the iceberg.Of course, if you raise this in certain circles you will get the witty retort "you should have done a better job of hiring!" Such Captain Obvious commentary is of little help, and infuriating when you are not the hiring manager, only the long suffering person who must deal with the daily fallout. It also fails to apprehend that hiring is an arms race in which poor performers are constantly seeking to game the system. An ingenuity which would be better spent developing the capabilities to perform their job well, but which instead sees them one step ahead of the hapless hiring process — a process made all the harder by AI and remote interviews. This is why I always advocate there is nothing like an on site closed book exam to sort the capable from the 'faking it until they are rumbled' brigade.
The problematic news, for organisations who don't catch the issue at the interview stage, is that terminating underperforming employees has become an increasingly complex and legally fraught process — particularly once someone clears probation. This is a result of the convergence of stringent legal protections, challenging economic conditions, and changing workplace norms that collectively create significant hurdles for employers.
A growing HR trend across most industries is performance management during probation. This involves a line manager — who realises they have got it wrong and hired someone clearly not up to the role — ploughing considerable organisational resources into lifting the new hire's performance to an acceptable benchmark. Rather than moving strait to exit in favour of a more capable candidate.At the most senior roles in organisations, the upshot of this evolving status quo is that poor performers with even modest time in the role can end up with a payout that exceeds the annual salary of the competent people left behind to clean up the mess. Only for these egregious individuals to bluff their way into their next gig and repeat the same mistakes. Something's gotta give, and it shouldn't be organisational purse strings.
A Growing Culture of Grievance
My grandfather spent much of his early career as what was called an 'hourly servant'. This meant he could be dismissed with only one hour's notice, and that was only the tip of a very big iceberg when it came to the challenges faced by workers in the face of often corrupt employers.
Fast forward about a century, particularly in countries like Australia, and the legal landscape and changed beyond recognition. While this has brought many essential protections for workers, it has also complicated the dismissal process for employers — even when an employee is clearly at fault.
Perhaps the pivotal element in this growth and transformation of employment protections is the way in which employees who are underperforming, or engaging in misconduct, can leverage the unfair dismissal system to contest termination of employment in ways often not contemplated by the creators of the legislation.
The token cost for lodging an unfair dismissal complaint was designed to remove money as a barrier to justice, but instead often fuels a culture of complaint filing because someone can rather than because they have a legitimate cause for action. The fee for lodging a complaint with the Fair Work Commission in 2023-24 was $83.30 (adjusted July 1 each year). A nominal sum that can be waived if a person successfully claims financial hardship. Yet more problematic than the low cost and effort involved in filing against an employer, is the growing range of past grievances upon which a claim can be based.
Ever failed to give an employee a bonus? Failed to promote them? Denied a leave application? Engaged in performance management? Requested they dress more appropriately for work? These are the sort of events that can be retrospectively connected with an unfair dismissal claim and against which an organisation must mitigate in order that its decision to terminate an underperforming employee be upheld.
Australia’s cost-of-living crisis has reached a critical juncture and this is adding to the difficulties faced when terminating an underperforming employee. Not only are poor performers unlikely to see the writing on the wall and leave of their own volition, but if pushed, are less likely to take the dismissal on the chin and instead militate to keep a role which they will struggle to replace.
This situation not only leads to lost productivity, as underperforming staff are kept in situ, but can stymie the career progression of high-performing staff who lack promotion opportunities. Eroding organisational culture as high performers experience diminished trust that management will take steps to deal with poor performance. It also risks losing the high performers who will more easily find a new role even in tough economic times.
Add to this mix The Closing Loopholes Acts, intended to provide vital protections for the most vulnerable but which also open the door further for staff to challenge performance-related termination, and the legal landscape for dismissal of underperforming staff is more varied and complex than ever.
Implications for Management
Unfortunately, the immediate solution to an increasingly litigious workplace is — more litigation. For this reason, deeds of release, a formal agreement by which an employer and an employee seek to settle a dispute, are becoming ever more prevalent in an attempt to mitigate the reputational and financial costs associated with defending unfair dismissal claims.
The good news is that the need for leader-managers is greater than ever. Gone are the days a line-manager can leave performance discussions to HR, address performance in real time, or avoid performance management until things come to a head. Instead, they must shift to a strategic planning approach which requires seeing over the other side of the hill. That is making a judgement call on when they have a good employee who has simply dropped the ball versus when they are employing an underperforming member of staff who needs to be shown the door.
To help manage this difficult and ongoing performance management process, there are five pillars to ensuring a strategic plan is in place:
- Role and Responsibilities: Clearly define and communicate job responsibilities, performance standards, and goals in writing. Provide the employee with these documented expectations to prevent any ambiguity, and update them as needed. Do NOT set and assume.
- Constructive and Consistent Feedback: Offer SMART feedback on areas that need improvement, and document each instance of feedback provided. Include details of strengths and weaknesses discussed, along with dates and contexts of the feedback sessions.
- Improvement Plan: Create a performance improvement plan (PIP) that outlines the steps the employee needs to take to improve, including timelines and support resources. Ensure the plan is documented and acknowledged in writing by the employee. It also helps to engage in some 360-degree feedback in these sessions.
- Training and Support: Keep detailed records of any additional training, mentoring, or resources provided to the employee. Document the dates, content of training sessions, and how they relate to the improvement goals or performance standards.
- Promotion/Bonus Decisions: Regularly monitor and document the employee's progress against the improvement plan, including all feedback and adjustments made. Clearly document the reasoning behind any decisions to refuse promotion or bonus requests, ensuring these reasons are directly linked to the employee's documented performance and improvement plan outcomes. Communicate these decisions and their justifications in writing to the employee.
Such an approach is a double-edged sword as it can provide vital protections for organisations if/when a performance related dismissal comes ends up in tribunal, and it can engender trust among the high performers in a team that meaningful action is being taken. This is because employees are made aware their manager does not 'do as they feel', an approach that creates an in group/out group culture vis-a-vis career development. It also helps managers to structure development of the people who drive 95% of organisational value — creating a culture of transparency and accountability. A win-win if ever there was one.
Good night, and good luck.
Cover image generated by DALL·E.
