Updated: Thursday, 9 January 2020

One of the greatest benefits of managing a small to medium business is the closeness you can achieve with your team. Your team is critical to your business and a team that is committed and works well together is in the best position to help your business grow and prosper. The downside is a small team also means that every team member must be able to perform to the best of their ability. An under-performing employee can increase the workload of other team members and put a strain on your business’ resources. As a small to medium business owner it’s vital that if an employee is underperforming, we look at the root of the problem. We need to ask ourselves ‘What are the common reasons for underperformance?’, and ‘How do you deal with an employee that is not performing?’. Only after asking these big questions can we formulate a plan to improve an employee’s performance, before we can even consider ‘How do you let an employee go for poor performance?’

Finding the balance between doing what is right for your business and what is right for the employee, while ensuring full legal compliance is a difficult task. At Bramwell Partners we strive to continuously provide expert HR Consulting Services to help resolve issues in your workplace. Contact us today to get the answers you need regarding workplace performance and dismissal.

What do you do with an underperforming employee?

Retaining top talent is one of the best ways to ensure success in your business. Time and resources are spent hiring the best employees, so it is always best to try and resolve any underlying issues that underperforming employees have before firing someone for poor performance.  At some point during the operations of your business, it is likely that an employee may underperform. So what do you do with an underperforming employee? It’s always best to tackle underperformance head-on in a calm manner and as soon as possible. When looking at any underperformance issues it’s always a good idea to consider these factors:

  • Question yourself first – Does the employee know they are underperforming? Does the employee know what is expected of them? Do they understand the repercussions of their actions? Has training been sufficient for them to meet the requirements of their role?
  • Be prepared and specific – Before confronting the employee, gather as much evidence as possible. Have concrete examples of underperformance, ensure that there is no misinterpretation of any facts.
  • Avoid emotions – Keeping calm and collected is the best way to work through difficult situations. Emotional confrontations will have little to no benefit to the employee and your business.
  • Deal with underperformance quickly – Continued underperformance sends a message to the rest of your hard-working team members that this behaviour is acceptable and sets a bad precedent moving forward.
  • Understand your employees and consider external factors – Are there any external reasons that the employee is underperforming?

Working together with your employee is the best way to resolve any underperformance issues. After discussing any underlying issues that are causing underperformance, work together with your employee to set performance goals and be sure to follow these up at a later date. Reward improvement and act on continued underperformance. Show the underperforming employee that as a manager that you care about their continued development and want them to work to the best of their ability. If underperformance continues it may be time to consider letting them go. Continue reading to read about ‘What are the 5 reasons for dismissal?’ and ‘What qualifies as wrongful termination?’

What are the common reasons for underperformance?

There are no simple one size fits all when it comes to reasons for underperformance. Before you can effectively deal with an underperforming employee it is important to know the reason for their underperformance. Diagnosing the cause is the best way for you and the employee to work towards a solution.

What are the common reasons for underperformance?

  1. Ineffective On-boarding – Ensuring that your employees are hired for the right position, with the right training and induction is the foundation of a high performing employee.
  2. Employee Motivation – Ensuring your employees remain not only motivated but also inspired to continually do their work, goes a long way to alleviate boredom which can lead to underperformance.
  3. Work Related Stress – Are your employees able to cope with the demands being asked of them? Is their work-life balance suffering due to over work? Keeping work related stress to a minimum is a key factor in minimising underperformance.
  4. Personal Issues – Not every employee is able keep their personal issues at home. Issues at home can make their way into the workplace and can have a negative impact on your workplace environment. It is important as a small to medium business owner to work through these issues with your employees and most importantly provide them the forum to be able to speak about them in a safe environment.
  5. Work Environment – Social relationships at work, communication between team members and managers and personal development all work hand in hand in ensuring that an employee wakes up in the morning excited to come to work that day.
  6. Advancement Potential – While some employees are happy with the status-quo, others want to feel that there is room for growth within the organisation. Having clear advancement opportunities for employees is a major contributing factor in how committed an employee will be to your business.

What are the 5 fair reasons for dismissal?

In Australia employees have legal protections when it comes to being dismissed without adequate cause. Firing an employee simply due to poor performance can be grounds for an unfair dismissal claim against your business. So as a small to medium business owner it is important to know ‘What are the 5 fair reasons for dismissal?’


Misconduct of an employee including: breaching a company policy, any activity that poses a serious risk to the health and safety of your workplace, dishonesty, poor attitude towards their employer and other employees, failing to follow a lawful and reasonable direction, intoxication at work, stealing, fighting and assaulting another person at work, are all valid reasons for dismissal based on conduct. In special cases out of hours conduct may also be considered grounds for dismissal. However there needs to be a connection that is relevant to their employment relationship.


Is the ability for the employee to perform the ‘inherent requirements’ of their position and the work they have been hired to do. An objective test needs to be conducted to determine if the work performance by the employee was satisfactory. This test needs to be based on the overall work of the employee during the time of employment and can’t be based on a particular instance in time. Incapacity may also be on a medical basis if the employee is temporarily absent from work for up to 3 months or up to 3 months within a 12 month period. Consideration needs to be given if the employee is likely to return to work and if there is sufficient medical evidence to justify the absence.


An employee who has not been performing their role to a satisfactory standard with due care and quality may be dismissed based on performance. Continue reading to learn about ‘Firing someone for poor performance’.

Genuine Redundancy

A common mistake that employers make is that making an employee redundant is the easiest way to move an underperforming employee on. A redundancy occurs when an employer doesn’t need an employee’s job to be done by anyone anymore. The Fair Work Act provides that a redundancy is genuine if it meets these three conditions:

  1. Operational changes in the workplace result in the person’s job no longer being required.
  2. All obligations in a modern award or enterprise agreement have been met including consulting with the affected employee.
  3. The employee could not be reasonably transitioned into a different position within the organisation.

Special Circumstances

This category is for any dismissal that does not fall into the above four categories. Some possible cases include: the dismissed party was an independent contractor or volunteer, the employee resigned voluntarily, the employee was employed for a specific period, task or contract, and the employee was employed on a casual basis.

Firing someone for poor performance?

Any dismissal of an employee may be seen as harsh by the Fair Work Commission if the proper procedure was not followed. This is especially true for firing someone for poor performance. In practice firing someone for poor performance is considered inadequate grounds for dismissal and can result in an unfair dismissal claim made against your business. A compliant dismissal based on poor performance must be accompanied with proper documentation that your business followed the proper procedures relating to the dismissal. In practice this means having advised the employee of their underperformance, formulated a performance improvement plan, allowed time for improvement and followed up following continued underperformance. Dismissal should only then be considered as the last resort.

When you are looking to fire someone for poor performance it is important that their dismissal was based on reasonable and justifiable grounds. The legal framework regarding ‘What are the 5 fair reasons for dismissal?’ is complex and hiring an external HR Consultant can be the best option to protect your business interests.

At Bramwell Partners we are a HR Consulting Agency that specialises in HR Support for Small Business to work through conflict resolution and can ensure that your business complies with all relevant laws during the dismissal process. Contact us today to discuss how we can help formulate a Termination Policy to protect your business from any unfair dismissal claims.