What happens when an employee goes from “you’re hired” to “you’re fired”?

“Why can’t we just get rid of them?!”

We hear this a lot from small business owners when they discover that one of their employees is no longer cutting the mustard. In fairness, it’s a reasonable question to ask. After all, it’s your business, you pay the wages and so you should be able to say who stays and who goes, right? It makes no sense to put up with poor performance and the last thing you want is an underperforming employee who just holds your business back.

Well… technically speaking you could “just get rid” of an employee at the first sign of underperformance. However, saying “You’re fired!” isn’t as straightforward as Donald Trump makes it out to be.

Firstly, yes, the individual employee is responsible for their own performance but you also need to take responsibility for hiring them in the first place. With this responsibility comes your obligation as an employer to manage their performance, which means helping to bring out the best in them. It really isn’t fair to the employee if, at the first sign of underperformance, you make the knee-jerk decision to fire them.

And more than likely, Fair Work Australia will see such a decision as unfair too. If an Unfair Dismissal claim is made against your business, your business could end up having to pay hefty compensation costs or have the employee reinstated if you’ve shown no evidence of giving the employee a chance to improve.

As with most things when it comes to managing people, communication is the key. So when an employee’s performance or attitude begins to slip, you need to let them know what it is that they’re doing wrong, what they need to do to get their performance back on track and talk about how you might be able to help (did they miss out on important training or information needed for them to do their job properly, are there external factors contributing to their poor performance or perhaps they don’t understand the responsibilities of their role, etc.)

Once you’re sure that you’ve clearly communicated your expectations and put in place an action plan for improvement, you need to give the employee a reasonable amount of time to improve their performance. Just a heads up, a couple of days probably won’t cut it. Often a reasonable time frame is between three to six weeks. Of course this will depend on each individual’s situation, so be fair but don’t compromise on the outcome you’re after.

So how many chances should the employee get before enough is enough and you decide to cut ties? We suggest a ‘three strikes and you’re out’ rule. We know you’re probably thinking that this is such a soft approach and that there’s no way that you’re going to put up with their mediocrity for that long!

We completely understand the frustration an underperforming employee can cause but we suggest this for two reasons:

• To be sure that you’re being fair to the employee (some of the best employees we’ve worked with have at some stage been through a performance management process so don’t write them off too soon!); and
• To minimise any risk to your business.

This approach is considered best practice and, if followed, it will mean that you’re better insured in the event of an unfair dismissal claim against you. We’re definitely not saying that you should be hamstrung by ‘best practice’ but it’s important to understand that you may be at risk if you do decide to fire an employee without giving them a fair go.

Having said that, there are certainly situations where the three-strike rule won’t always apply. If an employee is found to have grossly underperformed or engaged in serious misconduct such as theft or harassment then instant dismissal is usually always warranted, so your performance management process will simply help you carry out the termination in a fair way.

Finally, one of the first things you learn in business (sometimes the hard way) is to put everything in writing. Same goes when it comes to performance management. Mountains of detailed notes aren’t necessary but a simple to use performance management process and record of discussion template will help you to quickly and easily document any performance discussions you have with an employee.

As a small business you can’t afford to carry the burden of poor performers. Don’t feel that you have no choice but to tolerate poor performers and don’t be afraid to make the tough decision to fire an employee if you have to. If you follow a fair and consistent process, you’ll have nothing to worry about and can rest assured that you’ve made the right decision for the benefit of your business. Just do yourself a favour and try to be a little more tactful than Trump.

Janelle McKenzie and Abiramie Sathiamoorthy are the co-founders of E&I People Solutions. Janelle has a hands-on background in HR, her philosophy is all about providing practical solutions that offer businesses real value. Abiramie has worked with a range of different businesses to set up or enhance their people processes with an end goal to help create high-performing teams.