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Frequently Asked Questions

PERFORMANCE MANAGEMENT FOR EMPLOYERS

Hiring new employees is an exercise in finding the right ‘fit.’ Ideally employers are looking for a person who can stay with a company and grow into a role over a long period, and they in turn work hard to keep employees happy and foster their growth. Employees are usually searching for not only a high salary and other perks, but also somewhere that their skills can shine. Employees function better when they feel welcome, supported, and encouraged to grow.

Unfortunately not every working relationship is perfect. Employees may stumble, make mistakes, or lose focus in their jobs. This puts employers in a tough spot – it may be a knee-jerk reaction to let go of a newer employee who is under-performing, but for employees with potential there may be a road to improvement.

Employers should look seriously in such situations at their options for performance management. Performance management allows an employer to use a guiding hand to get the employee back on that road to success where possible. If change is not possible, or behaviour does not improve, the employer then has options for discipline or even dismissal.

When we discuss these scenarios with our clients, we always recommend a realistic assessment of the end goal: if it is to end the relationship, it is usually better to do it now, rather than go through a disingenuous performance improvement process for the sake of “building a file” to justify dismissal. If the goal is to get the relationship back on track, however, then performance management can be quite beneficial.

We regularly assist employers in implementing performance management, and are happy to share some of our most frequently asked questions:

What should we do if an employee is not meeting expectations?

If an employee is not meeting expectations, or not delivering the quality or standard of work that you are expecting out of their position, then it may be time to consider performance management. First, however, you should assess what is really going on: is there a new manager that is imposing new expectations on a previously strong employee? Are the expectations reasonable? Is there some external factor, such as a disability or addiction?

If the employee has a history of strong performance, the next step may be to approach them, express your concerns, and ask if there are any external factors impacting their performance.

If, after some consideration, you conclude that performance management is appropriate, it can take many forms, but on the whole it’s about bringing an employee back up to standards, and making sure that they are set up for success in their work.

Some performance management is routine, such as quarterly or annual performance reviews. These are expected conversations where employers will review an employee’s performance, revisit standards and company expectations, and even set new goals for the coming quarter or year. This of course is often when positive performance is rewarded – either with salary expectations, performance bonuses, or other financial incentives.

Yet if an employee is not performing up to standards then there can be a more disciplinary performance management plan in place. This can often take the form of a performance improvement plan (or “PIP”), where an employer and possibly managers will chart out a plan to get the employee back on track. This can include revised expectations, regular meetings and check-ins, enhanced oversight, and other measures to ensure that standards are being met. 

If an employee is not meeting the targets set in the PIP and is still failing to deliver, then yes the employer can move towards termination (more on that later). However not all scenarios may allow the employer to terminate with ‘just cause,’ and if the employer is offering that employee an exit package then poor performance is irrelevant to their legal entitlements. Also,  there is an overarching standard that the employer must act in ‘good faith’ at all times. This includes guiding the employee on a path to success and genuinely hoping they achieve it, and not setting unrealistic standards that set them up to fail. 

Learn more about our approach to performance management here.

Is it different if an employee has been with us long-term vs. an employee who just started?

This is a challenge that many employers face if an employee is not performing well. They may not be fazed if a brand new hire is not meeting standards, but it may come as a shock if a long-service employee suddenly is no longer performing at their usual level. There are actually several issues to unpack here, and key takeaways to remember. 

For the newer employees, the reality is that they may simply not be the right hire, or they may have lost interest in the role while they are looking to pursue something else. The benefit to a shorter service employee is that you are free to terminate their employment really at any time for practically any reason (provided it is not discriminatory), so long as you pay them reasonable notice. If a new employee is underwhelming, you may be inclined to let them go quickly vs. investing the time in performance management. 

While this is an option, it can be a risky one. Remember again that duty of good faith, which applies throughout the employment relationship no matter how long the employee has been part of your team. Even if an employee is brand new, it is still bad faith to provide them no support and effectively set them up to fail. Instead, especially if that employee showed initial promise, consider an earnest performance management plan that can effectively ‘right the ship’ before you need to end that relationship. 

Dismissing a short-term employee for cause due to poor performance has its own risks, as some Judges will assign some blame to you for failing to do your due diligence in the hiring process. It is also important to note that courts will be more skeptical of performance concerns when they relate to a long-term employee with a good record. After all, it is hard to explain how a good employee suddenly becomes so bad that discipline or dismissal is warranted.

If a long-service employee has been otherwise excellent until recently then their performance issues might come as a shock. While these employees are also owed a duty of good faith, employers should consider that there may be something more lurking underneath the surface. There may be an illness or mental health issue that is impacting performance (more on that later), so be cautious about rushing to judgement or taking decisive action right away.

Along with that duty of good faith, it is also true that without a solid employment contract, longer-serving employees are likely entitled to a longer reasonable notice period. While this may not matter in a performance management scenario where you can effectively terminate the employee with cause, it may become costly should you be required to pay that employee reasonable notice. It is always better to check in with an employment lawyer before moving towards discipline for a long-service employee so that they can help address what may be any underlying issues. 

What if the employee has a disability?

The definition of disability is broad. While we may think of people with mobility disabilities who rely on canes and wheelchairs, disability can include those with vision loss, hearing loss, learning or reading disabilities, or a host of internal illnesses that we may not be able to see with the naked eye. 

Some disabilities may not impact the workplace at all, while others may require some form of accommodation. Accommodation is a two-way street; employees need to work with their employers to help fashion reasonable accommodations that will allow them to succeed in the workplace. This may also require employees providing medical documentation, such as a functional abilities form, that informs the employer clearly what tasks an employee cannot complete due to their disability, and what sort of assistance they might need to succeed in their role. Employers are also not detectives – while they have a legal duty to inquire if they suspect that an employee may need accommodation, they are also not mind readers, and are not expected to automatically implement accommodations based on their best guesses. 

Thus, if you are going to implement performance management on an employee who is known to have a disability, you will want to tread lightly. Penalizing an employee for something related to their disability, such as missing work due to medical appointments, would be discriminatory and can subject your business to a human rights claim. Likewise, if you suspect that an employee’s performance issues may be related to a disability, it is always best to speak with an employment lawyer first before proceeding.

However, that does not mean that disabled employees cannot receive any discipline. If an employee’s performance issues have no connection (or nexus) to their disability, then in all other aspects they can be treated like any other employee. If however there is any doubt, or you spot a possible connection to their disability, check in with an employment lawyer before taking next steps. 

What if we suspect that the employee may have a substance abuse problem, or a mental health issue?

Mental health issues, including addiction and substance abuse, are all forms of disability but ones that can be especially difficult for employers. They can arise or worsen with little notice, and a once-model employee can become problematic or difficult seemingly overnight. Mental illness can be episodic, and can worsen due to a variety of stresses or other factors, so an employee who dealt with a mental health disability that did not impact their workplace for a long time might now be in a position where it significantly impacts their performance. 

The first step if an employer believes that an undisclosed mental health issue might be leading to a decline in performance is that duty to inquire as mentioned earlier. Human rights laws across the country require an employer to check in with an employee if they suspect that their mental health is struggling. While an employer is not allowed to know an exact diagnosis, they should first offer support to the employee, and may be able to offer counselling and other resources if they participate in an Employee Assistance Program. Improving an employee’s mental health if possible might be the simplest solution to performance issues, and improves an employee’s overall health as well.

If an employee does have a mental health disability and their performance has declined, there is a strong likelihood that the two are connected. However, this does not mean that an employer is entirely without options. If an employee has refused any offers for assistance, and refused to participate in the accommodation process, then the employer can proceed with performance management. This is however inherently risky given the employee’s health, and an employer should seek professional guidance before proceeding to any discipline. 

Can we fire an employee who is still not performing after performance management?

The short answer is yes, you can. The goal of performance management and a PIP is to improve an employee’s performance, but it also is designed to ensure that if an employee does not improve then you are able to terminate them with just cause, and significantly reduce your severance obligations.

There are, however, a series of hoops that any employer must jump through in order to reach that point. First, an employer’s workplace policies should be crystal clear in informing employees that policy violations may lead to discipline up to and including dismissal. Likewise, the performance improvement plan should also make it clear to employees that if they are not successful in improving their work, then they may be subject to dismissal for just cause. You will also have to establish that the performance expectations were reasonable. For example, if the expectation is that an employee make 20 widgets per hour, but the evidence establishes that the company average is 10, firing one worker for cause because they “only” averaged 10 would not be justifiable.

The other crucial step before any dismissal for cause is documentation. The employer needs to keep thorough, detailed records of both the employee’s missteps, and the failed attempts to rectify their behaviour. Without these records, it would be impossible for any termination with cause to survive a legal challenge. Remember, ‘just cause’ is the capital punishment of employment law, and is not to be taken lightly. Saying that an employee was not performing well without the supporting documentation to prove it will not only welcome a wrongful dismissal lawsuit, but that employee will likely make an additional claim for the employer’s bad faith. 

Employers can terminate an employee at any time by providing reasonable notice, but speak with an employment lawyer before going ahead with any termination, especially if you are intending to terminate their employment for cause. 

Do we need to bother with performance management at all before terminating?

No – not if you are prepared to spend money. Again, any employee can be let go at practically any time for practically any reason, so long as they are paid out properly and that reason is not discriminatory. You can fire an employee for the colour of their shirt, so long as you are not firing them for the colour of their skin. 

The motivation behind performance management is partially that it is intended to solve problems, but also that it gives employers a road to terminate for just cause for poor performance. That road though should never be taken lightly. It is a winding path full of hard-to-navigate obstacles, and an employment lawyer will always be your best guide.

Our firm has decades of combined experience helping employers draft workplace policies and implement performance management plans in all kinds of situations.

We help employers spot the risks in the process, and can offer guidance and consultation before moving ahead to discipline or dismissal.

Contact us today.

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Rudner Law
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Markham, ON
L3R 5B4

Phone: 416-864-8500
Text: 416-864-8500

Email: info@rudnerlaw.ca

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