Performance Management and PIPs

Performance management and Performance Improvement Plans (PIPs)

A Performance Improvement Plan (PIP) is supposed to help address genuine performance concerns. It should not be a paper trail designed to justify a decision that the employee will be dismissed regardless of improvement.

Performance is different from misconduct

Poor performance usually means the employee is not meeting an expected standard of work. Misconduct concerns behaviour or a breach of obligations. The distinction matters because most performance problems call for a forward-looking process that identifies the gap and gives the employee a genuine opportunity, with appropriate support, to reach the required standard.

What should a fair performance process identify?

• The required standard: what the role actually requires, using the employment agreement, job description, KPIs or other reasonable expectations.
• The alleged gap: concrete examples rather than general statements that the employee is simply "not performing".
• How improvement will be measured: the employee should be able to tell what success looks like.
• Support and training: especially where lack of training, unclear systems or changing expectations contributed to the problem.
• A realistic review period: enough time to demonstrate improvement given the role and the issue.
• Possible consequences: the employee should know when warnings or dismissal may follow if improvement does not occur.

Is a PIP automatically fair?

No. A document headed "PIP" does not make the process reasonable. Problems can arise where targets are impossible, measurement changes mid-process, historical allegations are continually added, promised training is not provided, the manager ignores improvement, or the employer has already begun recruiting a replacement while claiming the outcome remains open.

Warnings for poor performance

There is no universal statutory rule requiring a particular number of warnings in every case. The employment agreement or policy may prescribe a process. In a performance setting, however, warnings commonly form part of giving the employee a clear opportunity to understand the ongoing gap and the risk to employment before dismissal is reached.

Health, stress or disability affecting performance

If performance concerns may be connected with illness, injury, stress or another health issue, that information can materially change what a fair process requires. The employer may need to distinguish a performance problem from a medical incapacity issue and consider the relevant medical information and reasonable alternatives rather than simply escalating warnings.

Dismissal for poor performance

A performance dismissal can be challenged where the standards were not reasonable or clear, the employee was not fairly assessed, support or training was inadequate, the time to improve was unrealistic, warnings were defective, relevant improvement was ignored, or the dismissal outcome was effectively predetermined.