Recently, a colleague asked my opinion on the difference between a good organization and a bad organization. We could have discussed the issue for days but we kept coming back to the treatment of staff.
There was a particular part of this conversation, relating to performance improvement plans, I would like to share because it’s too often forgotten. There is a lot of focus these days on generating shareholder value through reducing workforces and maximizing profits through higher sales. But what is left out of the equation is the huge investment that walks out the door when employees are terminated.
Employers spend thousands of dollars to recruit and train workers. Yet, when it comes time to end the employment relationship, too many firms waste that investment by not adequately addressing performance issues.
Termination of employment is often a gut reaction to a manager’s frustration over performance issues. The situation often goes like this: The manager, while dealing with ongoing issues for quite some time, finally decides an employee needs to be terminated because she cannot meet the manager’s expectations. The manager then goes to HR — if the company has HR — with the expectation the termination will happen immediately. Often, very little thought is given to how the investment made in the individual can be saved because frustration rules the situation.
This scenario is as common as it is problematic for a number of reasons. First, when it comes to performance, it’s a manager’s job to enable staff to meet the expectations of the job and, thereby, the expectations of the department and organization.
Performance plans provide protection
A performance plan is a good way to protect the investment managers and organizations make in staff. Thoughtfully handling the issue (rather than turning quickly to the option of termination) has benefits not just for the employee and manager but the entire organization.
That’s because how an organization deals with performance issues can affect the morale of every staff member. The way these challenges are handled is a solid reflection of an employer’s values. Put simply, the way staff members are treated on the way out is just as important as the way they are treated on the way in.
Performance plans are not difficult to implement but they need to be clear, concise and created jointly.
It is important the manager clearly define the performance objective or expectations. He can then work with the employee to ensure the expectations are clear and understood.
Step two is to map out the necessary objectives to reach the performance goal — doing this jointly contributes to the understanding of the expectations and encourages participation and buy-in from both parties. This map can include tools or training that may assist the staff member in accomplishing the objective, and often includes actions and contributions from both the manager and employee.
The next step is to establish a timeline for improvement or the accomplishment of certain steps along the way. The full plan normally has a timeline of 30, 60 or 90 days. The final step in the process is to establish what consequences will occur in the event of success or failure.
Consequences should be about the effect a failure will have on others (colleagues, departments, customers or the firm), rather than on the individual’s employment status.
It’s important not to enter into a performance plan with any other intention than to improve an employee’s performance. If the manager is not committed to the process, staff will realize this very quickly and he will waste his time and lose his investment.
Alternatively, if a manager is sincere about protecting his investment and helping staff be successful, everyone will benefit from the process.
And in the event a manager needs to end an employment relationship after implementing and following through with a performance plan, it will come as no surprise to either party. The challenge then becomes how to put together a fair and equitable package that will satisfy the legal requirements and both parties. This package should include some form of outplacement service to help the employee find his next position.
Rick Filsinger is an independent human resources professional based in Kitchener, Ont. He can be reached at (519) 503-5449 or firstname.lastname@example.org.