The Performance Management Plan: A Thin Line Between Help and Harassment

The Fair Work Commission’s decision to reinstate Yep Yap, a roadside patrol mechanic sacked in 2022 for failing to meet performance targets, has brought to light a worrying trend in Australian workplaces. Performance management plans, or PIPs, have become increasingly common as a means of dismissing employees while still complying with unfair dismissal laws.

According to Joydeep Hor, an employment law expert from People + Culture Strategies, there is no hard and fast rule that requires employers to put employees on a PIP before terminating their contract. However, the absence of such a plan can raise questions about the employer’s intentions.

When employees are placed on a PIP, they often have little idea why it’s happening or what’s expected of them. Publicist Vivian, who was put on a performance management plan at her public relations agency in Sydney this year, was told not to mention it to her colleagues and had just 24 hours to make a decision about negotiating a settlement.

In many cases, the process is treated as a set-and-forget exercise by managers. Employers may set unrealistic targets or metrics, which can be stressful and troubling for employees who are already struggling. According to Ellie Wolfenden, senior associate at TLB Law & Co, “PIP’s have become a tick-the-box exercise rather than a genuine effort to improve employee performance.” This raises questions about the motivations behind these plans: is it truly about helping employees improve their work, or is it just a convenient way for employers to dismiss unwanted staff?

When an employer places an employee on a PIP, the first step should be to clarify why it’s happening and what’s expected of them. Employees who feel that their plan is unreasonable may want to seek legal advice, clearly documenting why and how any given metrics may be unreasonable.

The performance management plan can also create a work health and safety risk for the employer itself. When employees feel that the process is not genuinely aimed at improving their performance, but rather setting them up to fail, it can be stressful and troubling. This stress can manifest in various ways, including burnout, anxiety, or even depression.

Moreover, PIPs can also create a power imbalance between employers and employees. Employees may feel pressured into accepting a settlement or resignation agreement, without realizing that they have the right to challenge their employer’s actions. As Hor notes, “If the employer is just going through the motions, that’s not very nice, and they shouldn’t be.”

The performance management plan: a tool designed to help struggling employees improve their work, or a thinly veiled attempt by employers to get rid of unwanted staff? The answer lies somewhere in between. While PIPs can be beneficial when used properly – involving regular check-ins, providing training and support to the employee, and setting clear, measurable targets – they often fall short.

In Yap’s case, the employer’s decision to sack him was overruled because the performance metrics were seen as improper. Many of his colleagues had failed to meet their KPIs without being sacked, raising questions about the fairness and consistency of the process.

Employers need to reevaluate their approach to PIPs. According to Hor, “Employers need to ensure that the targets they set are clear, measurable, and time-bound, with clearly outlined consequences.” Employers should also provide regular feedback and support to employees on a performance management plan, rather than treating them as mere numbers or statistics.

Ultimately, PIPs have become a ticking time bomb in Australian workplaces. As employees continue to navigate the complex web of expectations and targets, it’s essential that employers take responsibility for their actions. By doing so, they can create a more positive, supportive work environment where employees feel valued and empowered to succeed – rather than feeling trapped by an unfair system.

As we move forward, one thing is clear: the performance management plan has become a thin line between help and harassment in Australian workplaces. Will employers learn from Yap’s case, or will they continue to use PIPs as a convenient way to dismiss unwanted staff? Only time will tell.