10.1: Handling Performance

Learning Objectives

1. Explain the types of performance issues that occur in the workplace, and the internal and external reasons for poor performance.
2. Understand how to develop a process for handling employee performance issues.
3. Be able to discuss considerations for initiating layoffs or downsizing.

As you know from reading this book so far, the time and money investment in a new employee is overwhelming. The cost to select, hire, and train a new employee is staggering. But what if that new employee isn’t working out? This next section will provide some examples of performance issues and examples of processes to handle these types of employee problems.

Types of Performance Issues

One of the most difficult parts of managing others isn’t when they are doing a great job—it is when they aren’t doing a good job. In this section, we will address some examples of performance issues and how to handle them.

1. Constantly late or leaves early. While we know that flexible schedules can provide a work-life balance, managing this flexible schedule is key. Some employees may take advantage and, instead of working at home, perform nonwork-related tasks instead.
2. Too much time spent doing personal things at work. Most companies have a policy about using a computer or phone for personal use. For most companies, some personal use is fine, but it can become a problem if someone doesn’t know where to draw the line.
3. Inability to handle proprietary information. Many companies handle important client and patient information. The ability to keep this information private for the protection of others is important to the success of the company.
4. Family issues. Child-care issues, divorce, or other family challenges can cause absenteeism, but also poor work quality. Absenteeism is defined as a habitual pattern of not being at work.
5. Drug and alcohol abuse. The US Department of Labor says that 40 percent of industrial fatalities and 47 percent of industrial injury can be tied to alcohol consumption. The US Department of Labor estimates that employees who use substances are 25–30 percent less productive and miss work three times more often than nonabusing employees (US Department of Labor, 2011). Please keep in mind that when we talk about substance abuse, we are talking about not only illegal drugs but prescription drug abuse as well. In fact, the National Institute on Drug Abuse says that 15.2 million Americans have taken a prescription pain reliever, tranquilizer, or sedative for nonmedical purposes at least once (Fisher, 2011). Substance abuse can cause obvious problems, such as tardiness, absenteeism, and nonperformance, but it can also result in accidents or other more serious issues.
6. Nonperforming. Sometimes employees are just not performing at their peak. Some causes may include family or personal issues, but oftentimes it can mean motivational issues or lack of tools and/or ability to do their current job.
7. Conflicts with management or other employees. While it is normal to have the occasional conflict at work, some employees seem to have more than the average owing to personality issues. Of course, this affects an organization’s productivity.
8. Theft. The numbers surrounding employee theft are staggering. The American Marketing Association estimates $10 billion is lost annually owing to employee theft, while the FBI estimates up to $150 billion annually¹. Obviously, this is a serious employee problem that must be addressed.
9. Ethical breaches. The most commonly reported ethical breaches by employees include lying, withholding information, abusive behavior, and misreporting time or hours worked, according to a National Business Ethics study². Sharing certain proprietary information when it is against company policy and violating noncompete agreements are also considered ethical violations. Many companies also have a nonfraternization policy that restricts managers from socializing with nonmanagement employees.
10. Harassment. Engagement of sexual harassment, bullying, or other types of harassment would be considered an issue to be dealt with immediately and, depending on the severity, may result in immediate termination.
11. Employee conduct outside the workplace. Speaking poorly of the organization on blogs or Facebook is an example of conduct occurring outside the workplace that could violate company policy. Violating specific company policies outside work could also result in termination. For example, in 2010, thirteen Virgin Atlantic employees were fired after posting criticisms about customers and joking about the lack of safety on Virgin airplanes in a public Facebook group (Smith, 2010). In another example, an NFL Indianapolis Colts cheerleader was fired after racy Playboy promotional photos surfaced (before she became a cheerleader) that showed her wearing only body paint (Chandler, 2011).

While certainly not exhaustive, this list provides some insight into the types of problems that may be experienced. As you can see, some of these problems are more serious than others. Some issues may only require a warning, while some may require immediate dismissal. As an HR professional, it is your job to develop policies and procedures for dealing with such problems. Let’s discuss these next.

Fortune 500 Focus

To handle attendance problems at many organizations, a no-fault attendance plan is put into place. In this type of plan, employees are allowed a certain number of absences; when they exceed that number, a progressive discipline process begins and might result in dismissal of the employee. A no-fault attendance policy means there are no excused or unexcused absences, and all absences count against an employee. For example, a company might give one point for an absence that is called in the night before work, a half point for a tardy, and two points for a no-call and no-show absence. When an employee reaches a certain number determined by the company, he or she is disciplined. This type of policy is advantageous in industries in which unplanned absences have a direct effect on productivity, such as manufacturing and production. Another advantage is that managers do not need to make judgment calls on what is an excused versus an unexcused absence, and this can result in fairness to all employees.

One such company with a no-fault attendance policy is Verizon Communications. However, the Equal Employment Opportunity Commission (EEOC) investigated this policy and announced that Verizon will pay $20 million to resolve a disability discrimination lawsuit (Evans, 2011). The lawsuit said that the company, through use of the no-fault attendance policy, denied reasonable accommodations required by the Americans with Disabilities Act (ADA). As a result, hundreds of Verizon employees were disciplined or fired. In this case, the EEOC cites paid or unpaid leave as one way for an employer to provide reasonable accommodations for an employee with a disability. The policy specified there would be no exceptions made to the no-fault attendance policy to accommodate employees with ADA disabilities. When discussing the case, the EEOC chair justified the agency’s position by saying, “Flexibility on leave can enable a worker with a disability to remain employed and productive, a win for the worker, employer, and the economy. By contrast, an inflexible leave policy may deny workers with disabilities a reasonable accommodation” (Evans, 2011). Part of the settlement also involved additional training to Verizon employees on ADA and how to administer the attendance plan. This successful lawsuit shows that even the most seemingly clear performance expectations must be flexible to meet legal obligations.

Human Resource Recall

What would you do if you saw a coworker taking a box of pens home from the office?