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When Employees Don’t Work Out

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09 / Sep / 2013

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It’s a situation most business owners will face at some point in their careers.  You hire someone with great hope and then discover his or her skills or attitude are not a good fit for the position or the company.

The myth in Australian business is that there is little you can do when an employee doesn’t work out as you had hoped and expected.  This is simply not true.  But when you are dealing with the fragile egos of human beings and the vagaries of Unfair Dismissal Laws it is prudent to act with care.

Assess Employees Frequently in the First Year

It is important that you review a new employee’s progress during the early stages of their employment – we would recommend at least a 3-monthly review in the first year.  This ensures that an employee is clear about your expectations and enables you to address any concerns quickly, before bad habits start to form.

The other reason, of course, for taking a careful look at your employees in their first year is that during this first 12 months a small business with less than 15 employees can dismiss a staff member without fear of an Unfair Dismissal claim.  (If your business employs more that 15 people then this period is reduced to 6-months.)

Don’t Dismiss Too Readily

Replacing employees is an expensive business.  Take a look at our previous blog The Cost of a Bad Hire to see just how much.

If the issue is underperformance, rather than misconduct, try to address the performance issue before you do your Donald Trump impression and shout “you’re fired.”  It takes time to work with an underperforming employee, but remember how much time and money is involved in the hiring process.

Don’t Delay

Whilst you don’t want to terminate employment lightly, you also don’t want to let a bad situation drag on.  Your inability to deal with the situation may well be making life difficult for other members of your team.  Good performers will be demotivated by what they will see as a lack of leadership.

If you have tried and an employee’s performance remains unsatisfactory make a decision to act.

Be Clear About Your Obligations to Your Employee

Before you act, ensure you are clear about your obligations to the employee.
Check out the Small Business Fair Dismissal Code on the Fair Work Australia website and go through the checklist to reassure yourself that you are acting appropriately and within the law.

Make sure you are clear about required notice periods and entitlements.

Be Professional and Respectful

No one likes having to fire someone – but that doesn’t mean you shouldn’t try to do it professionally and respectfully.  Make sure you have your facts straight before you start the meeting.  Invite the employee’s supervisor (and union representative if applicable) to attend the meeting.  Don’t beat around the bush – be straightforward and honest.  You may have had many conversations leading up to this point, but be prepared to explain the reason for their termination and how you have got to this point.

Unless the termination is for misconduct, allow the employee the opportunity to farewell their colleagues and collect their belongings.  It may surprise you to learn that most legal actions arise from the employee’s resentment at how he or she has been treated at the termination meeting.

Don’t Forget the Team

Nothing spreads more quickly through an organisation than rumours of a dismissal.  It is critical that you explain to your team that the person will no longer be with the company.  Avoid rancor or personal details.

Remember that people will want reassurance about their own jobs.  You will need to nurture your team’s sense of belonging.

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