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Striking out with ‘3 Strikes’ Performance Management?

08 June 2017

By Sharon Costigan, Ignite Senior Solutions Consultant, Outsourced People Services

Managing people has evolved greatly over the years, from the regimented, rules-based workplaces to free flowing, no-rules workplaces. So where should your business fit on that continuum?

You may have read about Netflix, which has minimal rules and operates on the premise that all employees work in the best interest of the company. When people are a poor fit, average or do the wrong thing they are out the door with a generous severance package.

But can you go down the Netflix line of little or no rules? Not if you want to protect your company from potential legal action! I doubt such an approach can work within the Australian Industrial Relations system where there is an expectation that all employees are given fair treatment and a process is recommended that all employers follow to avoid legal ramifications. Mainly because if an employee claims they have been treated unfairly the Fair Work Commission will assess if an employee was warned about their performance or behavioural conduct issues and if they have been given a fair and reasonable chance to improve.

It could be argued that having a strict process for managing underperformance with systematic warnings and monitoring meetings that continue to focus on the employee’s failures will make them fail more because they become anxious and fearful of termination. Managing through fear and threat of job loss can raise employee anxiety so they make even more mistakes. People need positive reinforcement, support and balanced constructive feedback in order to learn, grow and develop in their roles.

If your policy is very tightly written around the three formal warnings with set time frames and escalating seriousness it can only drag the process out longer than needed. This is inefficient, disruptive and costly to your business.

The old rigid “3 strikes you’re out” typically includes a period of attempting to improve performance through initial verbal advice, more advice and support, then an action plan. When this didn’t work the 3 written warning step was implemented with a month or two between each step. This means the whole process could have taken up to (and over) 6 months. This is simply too long and demoralising for all involved. Making the process faster, while still providing reasonable time and lots of support and coaching, is kinder to your business, the team and the employee who may not be the right one for your business.

So what is the difference between the old fashioned “3 strikes you’re out” approach and the recommended warning process? Simply put – the focus on improvement. If you build a work environment that is based on trust, collaboration, space to make mistakes (within risk parameters) and autonomy and create a workplace designed for employees to shine you probably won’t need rigid policies and procedures. In fact, you may not need too many policies and guidelines at all.

Still, there will always be those who are a poor fit to your work culture, or – for whatever reason – are not performing and are behaving inappropriately. So you still need some sort of process to manage these occasional issues, but having an approach that is focused on support, improvement and coaching is likely to have greater success.

This approach moves away from the rigid, rules driven workplace where talent can be stifled in favour of compliance, and the boss behaves like a parent, and the employees like children. Building a workplace that is dynamic and where people are treated like adults will result in greater engagement and commitment to the organisation, and therefore create buy-in into business success. When the wheels fall off; however, by immediately addressing concerns in a fair, compassionate way you have the greatest chance of guiding your employee back on track.

While you may be able to do away with many policies that were previously verbose and complex, you still need some explanation, in plain English, so that people clearly understand what is expected of them in your workplace. Similarly, having a policy and process that supports people who are underperforming to better performance also assists you in aligning to the expectations of the Fair Work Commission.

I recommend taking these steps if you note performance or behavioural issues is:


• Speak to the employee promptly. Talk to them honestly, but fairly, about the matters and the impacts this may be having on your workplace and business, including examples. Notice that you are not saying “improve or you are out the door” (punitive). Rather you are trying to find ways to keep them, while still flagging that lack of improvement could lead to termination. This can constitute the verbal warning.

• Find out if there are any mitigating circumstances and discuss how you may be able to support them. It is useful to put an action plan in place. This helps both parties keep on track, but as it is an aid to the employee, they own it – and the responsibility – to achieve agreed outcomes within agreed timeframes. The timeframe must be reasonable and allow time to improve.

• Meet frequently. It is giving that continual feedback on progress (or not) that helps the process forward. Take notes and document on the action plan so the content is transparent to all.


• Even before the end of the timeframe, if it becomes apparent that there is no improvement, swing into a formal process with a meeting to discuss. The important part here is to recognise this is stressful for the employee and they deserve support from someone of their choice while the process is revisited. This meeting is still improvement focused, but with more stringent requirements, with agreed upon supports.

• Document the meeting outcomes in a letter detailing the issue, what has been discussed, actions taken, and clearly document expectations (by date) or their employment status will be reviewed and could include termination. This letter details the supports and positive actions that will be taken, through the agreed actions, so again, the employee is still involved, participating, and contributing. This is the first written warning.


• If there is still no improvement, then the final/termination meeting needs to take place seeking a response from the employee on why. Based on their response, and taking into consideration any reasons, you may decide to allow a further period of time, or end employment at that point. Again, as this is a formal meeting, with the employee’s support person in attendance.

Yes, this is still a 3-step process. The key difference is that it is informal and improvement focused. Even the formal second step is still improvement focused. The third is termination unless there is a good reason not to end employment. A key feature throughout is respect, factual feedback and fairness.

Hint: even if a person is shown not be the right person during the probationary period, they are still entitled to the opportunity to improve, but regular meetings should reveal to both parties the employment relationship isn’t going to work and the person can be fairly and respectfully exited from your organisation.

HR policies and procedures can be complicated and rules change frequently. If you’d like advice or information about affordable programs that can help save time and reduce risk to your business, visit our Outsourced People Services page or email me at [email protected].

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