Managing underperformance: What to do when performance does not improve

Read the full series: 

Part 1: Managing underperformance: How to identify and address underperformance early

Part 2: Managing underperformance: From informal support to formal performance management

Three weeks into the formal process, Bright Build Supplies conducts a midway review of Alex’s performance to gauge how they are tracking.

While there has been some improvement in certain areas, the overall concerns remain. Although the frequency of mistakes has reduced, the performance standard required for the role has not been consistently achieved.

Alex attends a meeting with their manager where the review outcome is discussed, and expectations are reset for the remaining three weeks of the six-week PIP.

This presents a common challenge for employers. What should happen when an employee participates in a Performance Improvement Plan, receives support and feedback, but still falls short of the required standard?

Assessing progress objectively

Before deciding on any next steps, Bright Build reviews Alex’s performance against the objectives outlined in the PIP.

The business considers:

• The original performance issues identified
• The measurable standards that were established
• The level of improvement achieved
• Whether performance has been sustained over the review period
• The support and training provided
• Any explanations or barriers raised by Alex during review discussions.

Considering a written warning

Following the review, Bright Build determines that the concerns remain significant enough to warrant formal disciplinary action.

A written warning may be appropriate where:

• The employee understands the required standards
• Performance concerns have been clearly communicated
• Appropriate support has been provided
• A reasonable opportunity to improve has already been given
• Performance remains below the required standard.

Bright Build meets with Alex to discuss the outcome of the final PIP review. The business explains the areas where improvement has occurred, identifies the performance gaps that remain and outlines why these concerns continue to affect operational efficiency within the accounts team.

Following the meeting, Bright Build issues a written warning. The warning clearly identifies the ongoing concerns, summarises the support previously provided, outlines the standard required moving forward and explains that failure to achieve and maintain the required standard may result in further disciplinary action.

A written warning should never come as a surprise. By this stage, Alex has already participated in coaching discussions, received training and completed a formal Performance Improvement Plan. The written warning reflects the continued performance concerns rather than introducing them for the first time.

Extending the Performance Improvement Plan

Receiving a written warning does not automatically mean employment is at immediate risk. In many situations, extending a PIP may be appropriate, particularly where some progress has been demonstrated but the required standard has not yet been consistently achieved.

In Alex’s situation, Bright Build notes that certain aspects of performance have improved since the commencement of the PIP. However, the improvement has not been sufficient to meet the overall requirements of the role.

Rather than immediately progressing to more serious disciplinary action, Bright Build decides to extend the PIP for a further review period.

The extended plan continues to focus on measurable objectives and clearly outlines:

• The specific areas where performance remains below standard
• The performance level that must be consistently achieved
• The timeframe for improvement
• Ongoing monitoring and review arrangements
• Any additional support that will be provided.

The extension also makes clear that the business expects sustained improvement rather than temporary improvements immediately before review meetings.

An extension of a PIP can demonstrate that an employer is continuing to provide the employee with a genuine opportunity to succeed while maintaining appropriate accountability for performance outcomes.

The importance of procedural fairness

As performance management processes become increasingly formal, procedural fairness becomes even more important.

Throughout the extended PIP process, Bright Build continued to provide Alex with regular feedback, opportunities to respond to concerns and information regarding the standards that must be achieved.

Documenting discussions, review outcomes, support provided, and employee responses remains critical. Comprehensive records help demonstrate that decisions are based on evidence and that the employee has been treated fairly throughout the process.

How the Victorian Chamber can assist

Victorian Chamber members can access our Workplace Relations Advice Line for help with written warnings, PIPs, disciplinary processes, procedural fairness requirements and managing ongoing underperformance. Where matters are more complex or require hands-on assistance, enquiries can be escalated for tailored advice and support. Contact the Advice Line on 03 8662 5222.