8.12 Investigation of Performance Issues

When an employee is having a performance issue, it is often the responsibility of the HR professional to investigate the situation. Training managers on how to document performance issues is the first step in this process. Proper documentation is necessary should the employee need to be terminated later for that performance issue. The documentation should include the following information:

1. Date of incident
2. Time of incident
3. Location (if applicable) of incident
4. A description of the performance issue
5. Notes on the discussion with the employee on the performance issue
6. An improvement plan, if necessary
7. Next steps, should the employee commit the same infraction
8. Signatures from both the manager and employee

With this proper documentation, the employee and the manager will clearly know the next steps that will be taken should the employee commit the same infraction in the future. Once the issue has been documented, the manager and employee should meet about the infraction. This type of meeting is called an investigative interview and is used to make sure the employee is fully aware of the discipline issue. This also allows the employee the opportunity to explain his or her side of the story. These types of meetings should always be conducted in private, never in the presence of other employees.

However, in unionized organizations, the employee is entitled to union representation at the investigative interview. This union representation is normally called interest based bargaining, referring to a National Labor Relations Board case that went to the United States Supreme Court in 1975. Recently, Weingarten rights continued to be protected when Alonso and Carus Ironworks were ordered to cease and desist from threatening union representatives who attempted to represent an employee during an investigative interview (National Labor Relations Board, 2011).

Options for Handling Performance Issues

Our last phase of dealing with employee problems would be a disciplinary intervention. Often this is called the progressive discipline process. It refers to a series of steps that take corrective action on non-performance issues. The progressive discipline process is useful if the offence is not serious and does not demand immediate dismissal, such as employee theft. The progressive discipline process should be documented and applied to all employees committing the same offence. The steps in progressive discipline are normally the following:

1. First offence: Unofficial verbal warning. Counselling and restatement of expectations.
2. Second offence: Official written warning, documented in employee file.
3. Third offence: Second official warning. Improvement plan (discussed later) may be developed. Documented in employee file.
4. Fourth offence: Possible suspension or other punishment, documented in employee file.
5. Fifth offence: Termination and/or alternative dispute resolution.

Performance Improvement Plan

A Performance Improvement Plan (PIP) is a written document identifying how an employee is falling short of expectations in the job and identifies what needs to be done to improve and succeed (Organ & Main, 2022).

Following the first and second offence, along with a second official warning, an employee is required to participate in a Performance Improvement Plan.  This is generally handled through Human Resources, and may involve a Supervisor.  At this stage the employee’s performance is not up to standards which needs to be identified.  There are often three causes that affect an employee’s performance:  ability, motivation and environment.

• Ability: can include physical or psychological limitations, communication skills, problem solving skills, technical skills, interpersonal skills, analytical skills.
• Motivation: can include lack of ambition, relationships with co-workers, job dissatisfaction, lack of goals, feeling treated unfairly
• Environment:  can include (external) issues in the family, community, or personal; (internal) poor job design, economic conditions, rules, unions, lack of management support

Once a discussion has been completed, and the source of the problem has been assessed, action can be taken.  Some options might be training, a change in job or department, help in defining goals and expectations of the job, or other supports through Employment Assistance Plans the company may offer.

A Performance Improvement is not punitive. Rather is a step in a progressive discipline policy.  According to Timothy Ford, an attorney a PIP is used primarily to facilitate improved performance by identifying deficiencies and providing opportunities for improvement and success.  The goal is to help the employee succeed. The employee should be made aware, ahead of time, the expectations of performance are not being met.  This way there is no surprise. There are six main components to a Performance Improvement Plan:

1. Define the problem
2. Discuss the behaviours that should be modified, based on the problem.
3. List specific strategies to modify the behaviour
4. Develop long and short-term goals
5. Define a reasonable time line for improvements.
6. Schedule “check in” dates to discuss the improvement plan.

This plan is developed with the employee, the Human Resources Specialist, and perhaps a Supervisor. Once everyone is comfortable with the plan, it is agreed to and signed by everyone. Ongoing feedback, and “check in” dates will be honoured to ensure the employee is following the PIP. Corrective action is taken as necessary.  As well, praise for improvement is offered.  At the end of the PIP, the employee, Human Resources Specialist, and Supervisor review the PIP and decide of the goals were met.  If they were met, the PIP is complete.  If the goals were not met, other action may need to be taken.

A Performance Improvement Plan benefits not only the employee, but the organization too.  They include:

• Promotion of a Positive Company Culture:  Reinforce a positive company culture because employees feel supported when they need guidance and help with job expectations
• Feeling Cared For:  Employees feel supported, and appreciate that the company, their Supervisor and Human Resources take the time to offer feedback and help them improve.
• Saving Time and Resources: Hiring and onboarding costs time and money.  When employees are offered opportunities to improve performance rather than being terminated, it is a win-win for the employee and the company (Organ & Main, 2022).

Alternative Dispute Resolution (ADR)

Another option in handling disputes, performance issues, and terminations is alternative dispute resolution (ADR). This method can be effective in getting two parties to come to a resolution. In ADR, an unbiased third party looks at the facts in the case and tries to help the parties come to an agreement. In mediation, the third party facilitates the resolution process, but the results of the process are not binding for either party. This is different from arbitration, in which a person reviews the case and makes a resolution or a decision on the situation. The benefits of ADR are lower cost and flexibility, as opposed to taking the issue to court.

Some organizations use a step-review system. In this type of system, the performance issue is reviewed by consecutively higher levels of management, should there be disagreement by the employee in a discipline procedure. Some organizations also implement a peer resolution system. In this type of system, a committee of management and employees is formed to review employee complaints or discipline issues. In this situation, the peer review system normally involves the peer group reviewing the documentation and rendering a decision. Another type of ADR is called the ombudsman system. In this system, a person is selected (or elected) to be the designated individual for employees to go to should they have a complaint or an issue with a discipline procedure. In this situation, the ombudsman utilizes problem-solving approaches to resolve the issue. For example, at National Geographic Traveler Magazine an ombudsman handles employee complaints and issues and also customer complaints about travel companies.

Employee Separation

Employee separation can occur in any of these scenarios. First, the employee resigns and decides to leave the organization. Second, the employee is terminated for one or more of the performance issues listed previously. Lastly, absconding is when the employee leaves the organization without resigning and following the normal process. For example, if an employee simply stops showing up to work without notifying anyone of his or her departure, this would be considered absconding. Employee separation costs can be expensive.

Resignation means the employee chooses to leave the organization. First, if an employee resigns, normally he or she will provide the manager with a formal resignation written notification – letter or e-mail. Then the HR professional usually schedules an exit interview, which can consist of an informal confidential discussion as to why the employee is leaving the organization. If HR thinks the issue or reasons for leaving can be fixed, he or she may discuss with the manager if the resignation will be accepted. Assuming the resignation is accepted, the employee will work with the manager to determine a plan for his or her workload. Some managers may prefer the employee leave right away and will redistribute the workload. For some jobs, it may make sense for the employee to finish the current project and then depart. This will vary from job to job, but two weeks’ notice is normally the standard time for resignations.

If it is determined that an employee should be terminated, different steps would be taken then in a resignation situation. First, documentation is necessary, which should have occurred in the progressive discipline process. Performance appraisals, performance improvement plans, and any other performance warnings the employee received should be readily available before meeting with the employee. It should be noted that the reliability and validity of performance appraisals should be checked before dismissing an employee based upon them. Questionable performance appraisals come from the real-world conditions common to rating situations, particularly because of limitations in the abilities of the raters (Weekley & Gier, 1989).

Remember that if the discipline process is followed as previously outlined, a termination for nonperformance should never be a surprise to an employee. Normally, the manager and HR manager would meet with the employee to deliver the news. It should be delivered with compassion but be direct and to the point. Depending on previous contracts, the employee may be entitled to a severance package. A severance package can include pay, benefits, or other compensation for which an employee is entitled when they leave the organization. The purpose of a severance plan is to assist the employee while he or she seeks other employment. The HR professional normally develops this type of package in conjunction with the manager. Some considerations in developing a severance package (preferably before anyone is terminated) might include the following:

1. How the severance will be paid (i.e., lump sum or in x equal increments)
2. Which situations will pay a severance package and which will not. For example, if an employee is terminated for violation of a sexual harassment policy, is a severance still paid?
3. A formula for how severance will be paid, based on work group, years with the organization, etc.
4. Legal documents, such as legal releases and noncompete agreements
5. How accrued vacation and/or sick leave will be paid, if at all

The last topic that we should discuss in this section is the case of an absconded employee. If an employee stops showing up to work, a good effort to contact this person should be the first priority. If after three days this person has not been reachable and has not contacted the company, it would be prudent to stop pay and seek legal help to recover any company items he or she has, such as laptops or parking passes.

Sometimes rather than dealing with individual performance issues and/or terminations, we find ourselves having to perform layoffs of several to hundreds of employees. Let us address your role in this process next.

Rightsizing and Layoffs

Rightsizing refers to the process of reducing the total size of employees to ultimately save on costs. Downsizing ultimately means the same thing as rightsizing, but the usage of the word has changed, in that rightsizing seems to better define the organization’s goals, which would be to reduce staff to save money, or rightsize. When a company decides to rightsize and, ultimately, engage in layoffs, some aspects should be considered.

First, is the downturn temporary? There is nothing worse than laying people off, only to find that as business increases, you need to hire again. Second, has the organization looked at other ways to cut expenses? Perhaps cutting expenses in other areas would be advisable before choosing to lay people off. Finally, consideration should be given to offering temporary sabbaticals, voluntary retirement, or changing from a full- to a part-time position. Some employees may even be willing to take a temporary pay cut to reduce costs. Organizations find they can still keep good people by looking at some alternatives that may work for the employee and the organization, even on a temporary basis.

If the company has decided the only way to reduce costs is to cut full-time employees, this is often where HR should be directly involved to ensure legal and ethical guidelines are met. Articulating the reasons for layoffs and establishing a formalized approach to layoffs is the first consideration. Before it is decided who should get cut, criteria should be developed on how these decisions will be made. Similar to how selection criteria might be developed, the development of criteria that determines which jobs will be cut makes the process of cutting more fair, albeit still difficult. Establishing the criteria ahead of time can also help avoid managers’ trying to “save” certain people from their own departments. After the development of criteria, the next phase would be to sit down with management and decide who does or does not meet the criteria and who will be laid off. At this point, before the layoffs happen, it makes sense to discuss severance packages. Usually, when an employee signs for a severance package, the employee should also sign a form (the legal department can help with this) that releases the organization from all future claims made by the employee.

After criteria has been developed, people have been selected, and severance packages determined, it is key to have a solid communication plan as to how the layoffs will be announced. Usually, this involves an initial e-mail to all employees, letting them know of impending layoffs. Speak with each employee separately, then announce which positions were eliminated. The important thing to remember during layoffs is to keep your employees’ dignity; they did not do anything wrong to lose their job—it was just a result of circumstances.

“Managing Performance Issues” from Human Resources Management – 2nd Ontario Edition by Elizabeth Cameron is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

“11.3 Completing and Conducting the Appraisal” from Human Resource Management by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.