Managing Poor Performance: A Strategic Approach to Business Sustainability

In today's intensely competitive business environment, maintaining high-performance standards isn't just about productivity—it's about organisational survival. Companies that fail to address poor performance effectively risk compromising their competitive edge and long-term sustainability. However, managing poor performance requires a careful, systematic approach that balances business needs with legal compliance.

The Business Impact of Poor Performance

Unaddressed performance issues can have far-reaching consequences:

• Reduced productivity and efficiency

• Lower team morale and engagement

• Increased pressure on high-performing employees

• Compromised service quality and customer satisfaction

• Decreased organisational competitiveness

• Higher operational costs

Legal Framework for Performance Management

The Labour Relations Act (LRA) provides a clear framework for addressing poor performance, distinguishing between three scenarios:

1. Performance during probation

2. Performance after probation

3. Performance affected by ill-health or injury

Each scenario requires a specific approach, but all share the common principle of procedural and substantive fairness.

A Structured Approach to Managing Poor Performance

Step 1: Documentation and Assessment

Before initiating any formal process, managers should:

• Clearly document performance gaps

• Identify specific areas of underperformance

• Distinguish between inability ("wants to, but cannot") and misconduct ("can, but will not")

• Gather relevant performance data and evidence

Step 2: Initial Performance Discussion

The process begins with a structured discussion that:

• Reviews specific performance standards not being met

• Allows the employee to respond and provide input

• Explores possible reasons for underperformance

• Identifies potential solutions and support needed

Step 3: Implementation of Support Measures

Based on the initial discussion:

• Provide appropriate training and guidance

• Offer reasonable evaluation and counseling

• Set clear improvement targets

• Document all interventions and support provided

Step 4: Monitoring and Review

During the improvement period:

• Conduct regular progress reviews

• Document all improvements or continued gaps

• Provide ongoing feedback and support

• Adjust interventions as needed

Step 5: Final Assessment

At the end of the improvement period, three possible outcomes emerge:

1. Performance meets required standards

2. Extension of improvement period (if progress is evident)

3. Progression to formal incapacity proceedings

Key Considerations for Employers

1. Procedural Fairness

   1. Ensure proper documentation throughout the process

   2. Provide adequate notice of meetings

   3. Allow representation during formal proceedings

   4. Follow prescribed timeframes and steps

2. Substantive Fairness

   1. Ensure performance standards are clear and reasonable

   2. Provide adequate support and resources

   3. Consider all relevant circumstances

   4. Explore alternatives to dismissal where appropriate

3. Different Standards During Probation

While the basic principles remain the same, the LRA recognises that during probation:

• The evaluation period should be of reasonable duration

• Less compelling reasons may be accepted for dismissal

• The focus is on determining the employee's suitability for permanent employment

Best Practice Recommendations

1. Implement clear performance standards and metrics

2. Train managers in performance management procedures

3. Maintain detailed documentation of all performance-related discussions

4. Ensure consistency in applying performance management processes

5. Regularly review and update performance management systems

   
   

Conclusion

Effective performance management is not just about complying with legal requirements—it's about maintaining organisational effectiveness and sustainability. By following a structured, fair approach to managing poor performance, organisations can maintain high standards while minimising legal risks and promoting a culture of excellence.

Remember: The cost of tolerating poor performance often far exceeds the investment required to address it properly. In today's competitive business environment, organisations cannot afford to delay or avoid addressing performance issues.