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?
Issue 13 | January 2011
Future of Work
Key Predictions About Work in 2025
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.
: 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?”
he did, he may justifiably be dismissed.
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.