Top tips for managing poor employee performance

06 September 2021

VCCI's Workplace Relations team is often called by businesses at the point of desperation. Here is a guide on how to prevent an unengaged workforce and dismissal related claims.


Managing poor performance is part and parcel of business. We know how tiring and frustrating it can be when a team member isn’t pulling their weight. While managing underperformance isn’t pleasant for managers and HR professionals, it’s part of the job and is key to ensuring the business isn’t exposed to legal and commercial risks. 

 The Victorian Chamber’s Workplace Relations Advice Line is open to take your call and help guide you through your workplace issues. In the meantime, here are five fundamentals to effectively managing poor performance:  

 #1: Preparation 

Be prepared. Take the time now to review: 

  • Position descriptions - These don’t need to include every single requirement the employee is expected to perform, but they should set out any key performance indicators or outputs.   
  • Internal policies - Does your business have a policy that addresses performance management and disciplinary processes? If yes, when was it last reviewed? It may be time for a refresh. If your business doesn’t have a policy, it’s time to put one in place. 
  • Internal processes - A policy is great, but ensuring managers know what to do with it is key. If a manager has concerns, do they deal with the situation themselves? At what point does a manager need to involve HR or their own manager? Does your business have any templates managers can use to document the process? Where can managers go for advice?  

#2: Ensure you use the right process 

Once your business has policies and processes in place, it’s important they are used correctly. If a member of staff is underperforming in their role, yes, a performance management process is required. However, in the case that an employee has shouted expletives across the office, or are helping themselves to supplies, performance management isn’t the answer. These examples are conduct issues which must stop immediately. Depending on the circumstances, go straight to counselling, investigation or disciplinary action. 

#3: Strike while the iron is hot 

If an employee is underperforming, don’t wait until the annual performance review to address the issue – strike while the iron is hot. Have conversations early. It may be that the employee doesn’t completely understand their role requirements, they are struggling with a new computer program, or there is an unknown underlying issue. In these cases, the focus should be on support and coaching. 

Unfortunately, it’s very common to hear stories of managers who have not addressed performance issues early and as a result have dismissed an employee out of frustration. This doesn’t work. The employee will most likely lodge an unfair dismissal claim and succeed.   

#4: Follow-up and have an action plan 

Through performance management discussions, develop a plan which clearly articulates what the performance expectations are. If you have position descriptions, KPI’s, or other sources of information, use these resources in the plan. Work with the employee to develop the plan and set milestones. Consider, discuss and build in mechanisms to support the employee. Contemplate on-the-job coaching, refresher training or work shadowing. Put simply, make sure your staff member has the tools they need to succeed. 

Don’t set and forget. Have regular check-ins to discuss how the employee is tracking. Are they working towards the discussed milestones? If not, explore why. Exploring the underlying reasons is vital. Often there is a reason, and once it has been identified it can be worked through. While you are there to support the employee, you also need to make sure they understand what the consequences may be if they do not meet the requirements of their role.  

#5: Document, document, document 

Did we mention document? If you don’t document it, it didn’t happen. Make notes of performance coaching sessions and check-ins and be sure to record your plan. Confirm in writing what the outcome of the performance improvement plan is. Make it clear what the next steps are if there isn’t improvement.   

If an employee fails to improve and is dismissed, they may lodge an unfair dismissal or another employment related claim. To defend the claim, you need to be confident you can demonstrate: 

  • The performance management was necessary
  • The employee had a fair and reasonable opportunity to improve
  • The employee received a warning and understood the consequences of further underperformance. 

Glossing over these fundamentals may result in a wasted or flawed process.  

How we can help   

The Victorian Chamber Workplace Relations Consultants have a wealth of experience conducting and coaching managers and HR professionals through performance improvement processes as well as advising on disciplinary outcomes.    

 The Workplace Relations Advice Line offers general advice on a range of workplace issues, including:  

  • Award interpretation, classification and minimum entitlements 
  • Disciplinary processes, performance management and termination
  • Personal illness and injury
  • Parental leave and flexible working arrangements
  • Redundancy
  • Occupational Health and Safety and WorkCover.  

For assistance on any aspect of your employment obligations, please call the Victorian Chamber Workplace Relations Advice Line on (03) 8662 5222. 

Workplace relations advice

Resolve HR & workplace relations matters with our help. Call the advice line during business hours.

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