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Poor Performance
with Dharmen Sivalingam

HR Matters : Termination for poor performance seems to be very subjective and difficult to manage. What is the law’s expectation on this area and what are some best practices that an employer ought to be aware of?

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Dharmen Sivalingam is the Executive Director of MECA Employers Consulting Agency Sdn Bhd, a boutique consulting firm that provides advisory services to employers on all things related to Industrial Relations. His ultimate career goal is to deliver world-class industrial relations practices to Malaysian employers.

Purely focused on IR, MECA clients are entitled to free on-site, phone and email consultation, weekly case summaries, invitations to bi-monthly meetings on IR topics. MECA recently ran their annual convention,the 2010 MECA Industrial Relations Convention in June. For more details, please visit Meca.



Dharmen : After misconduct, the second most common reason for terminating the services of an employee is an employee’s perceived poor performance. For misconduct, the law’s focal point is: “Did he do it?” If he did, he may justifiably be dismissed.

For performance meanwhile, the employee may be a poor performer but that on its own may not necessarily justify immediate dismissal. Why is there this contrast? In my opinion, the commission of acts of misconduct, in most cases, is intentional. If an employee is found guilty of theft, for example, it would be ridiculous for him to attempt to claim that he did it “accidentally”. For poor performance, this element of intention is missing. Employees don’t start the day saying “Today, I am going to be a poor performer!”

There are three steps to managing poor performance. First, the employee must be informed of the areas of his poor performance. Secondly, he must be given a reasonable opportunity to improve his performance. Lastly, the employer must be able to demonstrate that despite compliance with the first two steps, his performance levels remain unacceptable.

The three steps referred to, do not necessarily have to be present in all cases of poor performance. In cases of very high-level staff, the need for slavish adherence to the three steps is reduced. Generally, however, the three steps are necessary before termination for poor performance can be justified.

If we were to drill down into the three steps, the first step basically is notification to the staff of his poor performance. The employer needs to be specific and clear about the areas of poor performance. The lower the level of the staff, the more specific and clear the identification of the areas of poor performance has to be. Include the expectations of the company. Again, be clear and specific. Also, state that the current level of performance is not acceptable and that if the situation does not improve, the company may have to consider parting ways with the employee. Include a time frame for improvement. State that reviews of performance will be conducted in this time frame. Encourage the employee to remain positive and strive to improve. This should be in writing and receipt of the letter should be acknowledged.

The second step is about giving opportunity to improve. This means a reasonable amount of time should be given to an employee to improve. How much time is reasonable? There is no magical number of days. You have to ask yourself if the time given would be perceived by a reasonable person as sufficient to expect improved performance. Also, other forms of opportunity to improve would be good such as coaching, counselling, training, mentoring, etc. Again, all of this should be documented. It is also important that in the timeframe given for improvement, review sessions are conducted to measure where the employee’s performance is against where the company expects it to be. And guess what? Yes, this too should be documented and acknowledged, where possible.

The last step is that there must be proof that the employee has not benefited from the notification of his areas of poor performance and the opportunity given to improve. There must be some evidence, either quantitative or qualitative, to show that the employee’s performance level is still below expectations. If all these steps are present, the services of the employee may be terminated with notice of termination.


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