Chapter 9 Performance Management, Discipline, and Termination

Performance Management Purposes, Processes, and Systems

There are three purposes of engaging in performance management:

• • Strategic: Managing performance helps organizations to achieve the goals set out in their overall strategic plans. Aligning workers’ performance with overall organizational strategy requires establishing clear expectations and feedback systems.
• • Administrative: Performance management and, in particular, evaluation inform many organizational decisions, including the allocation of pay increases, promotions, and variable pay as well as restructuring, discipline, and termination.
• • Developmental: Performance management should help workers to improve their performance and develop their skills and abilities to increase their job satisfaction and effectiveness. This can include identifying areas requiring additional training.

Organizations often use performance management only for administrative purposes. A more effective approach integrates the three purposes into an ongoing process. It is useful to view performance management as a five-step process (see Figure 9.1).

1. 1. Define expectations and goals: Identify and convey which behaviours and outcomes are expected from workers and how their work fits into the organization’s goals. This step should be in alignment with overall organizational strategy.
2. 2. Provide ongoing feedback: Provide immediate and informal feedback and coaching during day-to-day supervision to shape day-to-day performance.
3. 3. Undertake performance appraisal and evaluation: Conduct periodic formal evaluation of worker performance to identify strengths and areas that need improvement.
4. 4. Determine outcomes: Allocate rewards (e.g., performance bonus), consequences (e.g., warning letter), or future actions (e.g., training) to recognize, correct, or improve performance.

1. 5. Plan improvements: Discuss workers’ future development and include planning for career advancement, achieving personal goals, or improving effectiveness and satisfaction.

It is important to keep in mind that, while these steps usually occur in a sequence, they can overlap one another. Each step addresses a different purpose in performance management. In any particular context, one or more of the steps can take on a larger or smaller significance, but it is a mistake to omit or skip any of the steps since together they create a complete process of performance management.

This five-step process can be integrated into organizational processes by establishing a performance management system. This entails developing policies and practices, providing resources, and actively managing the processes necessary to make performance management effective. A performance management system is most effective when clearly linked to the organizational strategy such that, if strategic goals shift, the new expectations will be reflected in the system. It also includes developing and communicating new expectations to workers, ensuring that their behaviours and outcomes change, and updating evaluation criteria and processes to reflect the new goals.

An effective performance management system should recognize the needs of employees as well as those of the organization. Not recognizing employees’ needs can result in workers who ignore or sabotage the system. For example, if workers think that they cannot possibly meet the standards on which they are to be evaluated, then they might choose to ignore the goals implicit in a system of evaluation. Or they might choose to game the performance system. For example, if advertising salespeople are monetarily rewarded based on gross sales and the target is set too high, then they might sell ads to clients whom they suspect or know will not pay their bills. This behaviour lets the salespeople hit the sales target but does not contribute to the underlying organizational goal (probably related to increasing revenue). This possibility also suggests that performance management processes need to be periodically evaluated to ensure that they are working as designed. Performance management systems also need to respect whatever workers’ rights exist in common or statutory law or have been negotiated in a collective agreement by a union.

Defining Expectations

Workers can perform satisfactorily only if they know which behaviours and outcomes their employer seeks. There are two main types of expectations.

• • Task expectations focus on the specific functions, outcomes, and demands related directly to a worker’s job. They can consist of quantitative goals (e.g., sales targets expressed with a dollar value). They should focus on elements of a job within a worker’s control and be achievable. Task expectations should be informed by organizational goals but need to speak specifically to the worker’s job.
• • Contextual expectations address aspects of a worker’s job performance that contribute to broader organizational goals, such as fostering better teamwork, improving interdepartmental communication, or achieving better work-life balance. Contextual expectations should reflect a worker’s relative position in the organization. For example, a front-line worker is unlikely to be able to influence corporate-level behaviour (e.g., work-life balance) but can contribute to how clients experience an organization’s service.

Performance management systems flounder when expectations are not communicated clearly. For example, workers might be expected to “just know” what is important to do. Yet, if no one has told them the importance of being a team player or exercising discretion to make every customer happy, then it is not surprising that they might simply focus on doing their jobs well or carefully following organizational rules. Feature Box 9.1 discusses how to create a well-developed set of expectations.

Ongoing Feedback

Providing workers with ongoing feedback about their performance means that concerns can be addressed in a timely manner. Such feedback is often provided by supervisors engaged in day-to-day observation, engagement, and direction of workers. The resulting discussions can identify areas for improvement as well as recognize accomplishments and identify paths for further development. The strength of ongoing feedback is its immediacy. It takes place on the spot, close to the moment when a worker exhibits a behaviour or achieves an outcome. This makes feedback concrete and prevents the development of undesirable work habits. This immediacy can also create challenges. Supervisors and workers might find it difficult to provide or receive feedback effectively if emotions are running high. Ongoing feedback is also a useful source of information for later formal performance assessment and evaluation and can be understood usefully as an informal version of this subsequent step in the performance management process.

Supervisor feedback is commonly called coaching. The term coaching emphasizes the importance of teaching and encouraging workers to improve their performance. It is noteworthy, however, that coaching tends subtly to assert that everyone is on the same team and has the same interest in “winning.” This can obscure legitimate conflicting interests between workers and employers as well as the power dynamic in a supervisor-worker relationship. Workers might not want to “improve” their performance (e.g., produce more) if such an improvement makes their day-to-day experience worse (e.g., tires them out, increases their risk of injury, raises long-term expectations).

Another challenge with informal feedback is that supervisors are often inadequately trained on how to provide ongoing feedback. Often individuals are promoted to supervisory tasks based on their experience or performance in a job, not on their skill as a supervisor. Supervisors might be reluctant to engage in conflicts with their subordinates over their performance. Organizations might also have too few supervisors for them to provide an adequate level of oversight and feedback. As a result, supervisors can be either too passive or too aggressive in their supervision and provide feedback that is either too detailed or insufficient. It is important to be mindful that supervision can also be abusive. This can reflect an innocent error, be wilful, or even be a management strategy (see Feature Box 9.2).

Effective ongoing feedback focuses on worker improvement and development and avoids attributions of blame or too much focus on errors or mistakes. There should be opportunities for workers to express their perspectives on what has happened and suggest ways that their performance can improve. These suggestions can reveal barriers to performance outside the worker’s control. Ongoing feedback can also be varied based on a worker’s mastery of job tasks. A supervisor might need to be very hands on to walk the new worker through job tasks. As the worker learns them, the supervisor can become less involved and more passive in making observations. This change is intended to ensure that the worker feels supported when learning and trusted when performing adequately. Training supervisors how to provide feedback effectively can improve how they handle these daily interactions.

Large organizations can become focused on the formal aspects of performance management, such as annual performance appraisals. Too much attention to the formal aspects of the process can cause organizations to overlook the importance of day-to-day interactions between supervisors and workers in improving worker performance. If handled appropriately, then ongoing feedback can offer significant benefits to both the worker and the employer.

Performance Appraisal and Evaluation

Many organizations regularly and formally evaluate the performance of their workers. This might entail quarterly, bi-annual, or annual performance evaluations. There are several approaches to performance appraisal. Selecting among them requires considering the nature of the work being evaluated, the workplace structure, and an organization’s strategic goals as well as any provisions negotiated in a collective agreement by the union. Many organizations utilize more than one approach. Regardless of which approach is taken, the criteria by which workers are evaluated should be linked to established expectations and organizational goals as discussed in Feature Box 9.1.

The simplest approach to performance appraisal is to compare workers with each other to determine their relative ranking from best to worst. This comparative approach can be done in several ways. Supervisors or managers can simply examine the performances of all workers under their supervision and rank them from top to bottom. Slightly more complicated approaches include the following.

• • Alternation ranking: A supervisor alternates between identifying the best and the worst performers. These workers are then placed at the top and bottom, respectively, of a ranked list.
• • Forced-distribution ranking: The supervisor allocates each worker into one of several categories (e.g., above average, average, and below average). There is a fixed number of spots in each category, which forces the supervisor to differentiate among the workers (even if the actual differences between any two workers are minimal).
• • Paired comparison: Workers are compared with every other worker in pairs and given a point every time they are determined to be higher performers. The workers are then ranked based on the number of points that they earn.

The strengths of a comparative approach are its simplicity and directness. The process is easy to implement and forces the manager to make clear decisions about performance. The result is a clear picture of relative performance within the organization. The weaknesses of a comparative approach are that it is highly subjective and can be perceived as unfair. Decisions can be shaped by supervisors’ prejudices and opinions unrelated to job criteria, meaning that this approach can perpetuate inequalities and encourage favouritism. Comparisons can also create divisions within an organization since workers see each other as competitors rather than teammates.

The comparative approach also might not adequately account for intergroup differences. For example, the worst-performing member of a well-performing work group might still be performing better than the best-ranked worker in a different and dysfunctional work group. This approach also, by design, requires someone to be the worst performer in a group, even if that person is working at or above the expectations required of the position. The comparative approach is best utilized in settings where the performance expectations are easily quantified, such as sales figures or production quotas. The criteria used to rank workers should also be transparent to all workers such that everyone is clear on what basis they are being ranked. It is also more effective in smaller work settings since ranking becomes cumbersome and imprecise as group size increases.

An alternative to performance evaluation is the attribute approach. It measures the extent to which a worker possesses certain characteristics or traits desired by the employer. For example, an organization might identify attributes important for a job and in achieving its goals (e.g., leadership, teamwork, independence, interpersonal skills, creativity, problem solving), and supervisors can then rate workers on how well they exhibit each trait. The result is a graphic rating scale, which visually lays out each attribute and the worker’s score on it, usually on a five-point scale (e.g., 1 for poor, 5 for excellent). The scale can be supplemented with qualitative comments. The attribute approach works best in situations in which outcomes are hard to measure or define and the job emphasizes the so-called soft skills required with human interaction. This approach also requires a high degree of one-on-one discussion to place the attributes and the scores in context.

The strength of this approach is that it is individualized, and the worker can easily see areas of strength and weakness. Workers are evaluated on their own terms and not rated compared with others. However, using attributes means that the evaluation is based not on what the worker does but on which personality traits or behaviours the worker displays. The link between possessing an attribute and a worker’s job performance can sometimes be tenuous. For example, someone might display good interpersonal skills but not make much of a contribution to achieving organizational goals. The approach can also become subjective. Attributes are usually vague and the differences between scores hard to define. Considerations unrelated to the job can also creep into the evaluation, creating issues similar to those of comparative approaches. If the attributes are not clearly linked to the job, then the process can lose credibility among workers.

The behavioural approach attempts to overcome the issue of vagueness in the attribute approach by identifying specific desired behaviours and actions. They should be those central to strong performance. Workers’ performance is then evaluated on those behaviours. At its simplest, a behavioural performance appraisal involves the evaluator identifying and recording specific examples of desired (or undesired) behaviours by the worker. This technique, often called critical incidents, provides direct and relevant evaluation and is effective at offering feedback for performance improvement.

Building upon critical incidents are behaviourally anchored rating scales (BARS). Clusters of critical incidents are compiled to create behavioural anchors that define different elements of performance. The BARS process has three key steps.

1. 1. The evaluator identifies the key performance dimensions of the job (e.g., interactions with customers, store cleanliness, timeliness, etc.) from gathered critical incidents.
2. 2. The behaviours most representative of good and bad performance on each dimension are identified as behavioural anchors.
3. 3. The evaluator rates the worker on a seven- or nine-point scale for each dimension based on the behavioural anchors.

An example of a behaviourally anchored rating scale is provided in Table 9.1. This BARS focuses on a worker’s attention to store cleanliness. The worker would be rated on this scale and several other scales addressing key performance dimensions. The worker’s overall performance score is the total of the ratings for all of the scales on which the worker is rated. The ratings for several workers can then be easily compared, either on specific dimensions or overall.

The advantage of BARS is the close association between the evaluation and the tasks and functions performed in the job. Workers can clearly see expectations against which their behaviour is rated. BARS can also lead to specific feedback on improving performance. There is a risk of disagreement emerging if the worker does not agree with the rating or believes that the behavioural anchor is not reflective of the job duties. Also, this method can only rate directly observable elements of the job. Attitudes, thinking work, and other non-observable behaviours and actions cannot be effectively evaluated so are not considered. Behavioural approaches are best used with jobs that require tangible, explicit behaviours not prone to misinterpretation.

The final approach to performance review is the results approach, which focuses on measurable results of a job or group of jobs. Management by objective (MBO) links performance evaluation to previously established performance goals. At the beginning of the process, the organization’s senior managers establish a set of goals for the organization to achieve. These goals are then translated by lower levels of managers into goals for their departments that will help to achieve the broad organizational goals. These goals are then communicated to individual workers expected either to accomplish individual goals or to work toward departmental goals. Periodically (usually annually), workers’ performance is measured to determine if and how well the workers have met the goals.

The balanced scorecard method evolved out of MBO. It places goals into four categories of performance: financial, customer, processes, and learning. A similar process of goal setting and evaluation takes place. The balanced scorecard aims to be a more refined approach to setting goals by requiring managers (and workers) not only to identify productivity or financial goals but also to consider multiple dimensions of organizational performance. Results-based performance evaluation is best suited to larger, more complex organizations in which aligning the work of different parts of the organization is important. It might also be more appropriate for jobs that have a high degree of complexity or aspects that are difficult to observe directly.

Results-based performance evaluation methods were developed with the goal of creating a more objective, error-free process of review. Clear articulation of and agreement with goals establish a clear basis for evaluation. This approach has the advantage of including aspects of performance not easily observed. It also directly links individual performance to the organization’s broader strategic goals, which should improve organizational performance. The key challenge with this approach is that it can be very top down because senior managers set the goals that start the process. If the goals are set without consultation with workers, then they might not buy in to the process. A second challenge is setting the appropriate goals. If they are too easy to achieve, then the evaluation is meaningless. Conversely, if the goals are too hard to achieve (or their achievement is not within the control of the workers), then they might give up or exhibit gaming behaviours.

Gathering Performance Information

All performance evaluation approaches require accurate information about workers and what they have done. There are five primary sources of performance information.

• • Supervisors: The most common sources of information are observations made by a worker’s direct supervisor. Supervisors understand the job requirements, observe the worker performing the job, and typically keep and/or have access to records of the worker’s performance.
• • Co-workers: Other workers performing the same job or working at the same level in the organization might have more opportunities to observe a worker in action regularly and have the benefit of interactions not available to a manager. Peers have excellent knowledge of the job and its requirements, but they also understand the challenges and barriers that someone might confront in the job.
• • Subordinates: Subordinates are well positioned to provide insights into how a supervisor interacts with workers as well as other aspects of their performance. Using feedback from subordinates can incentivize supervisors to prioritize employees’ satisfaction over other aspects of their jobs, such as productivity.
• • Workers: Asking workers to self-evaluate their performance can reveal useful insights into why they are performing at a specific level. Self-assessment can increase workers’ engagement and offer workers the opportunity to identify personal strengths, weaknesses, and areas to improve.
• • Customers or clients: For workers who interact with others as a part of their jobs (e.g., retail or health-care workers), it is possible to solicit feedback from those whom they serve. Satisfaction can highlight both areas of strength and areas for improvement. Some organizations also solicit feedback for so-called internal customers (i.e., parties within an organization who utilize the services of a specific unit or department). That said, customers often lack important information about the job, and their perceptions can be shaped by factors outside the worker’s control (e.g., long lines, high prices).
• • Technology: Some organizations might have the ability to gather performance-related information from the equipment that workers use. For example, delivery drivers might use GPS-enabled, hand-held devices that track parcel deliveries. This information can be used to assess how productive workers are as well as to monitor their locations. Similarly, call centre technology can produce data tracking the speed of call resolution as well as recording the interaction for subsequent analysis.

Increasingly, organizations are choosing to gather performance information from multiple sources in an effort to gather the most accurate information and to minimize the impact of bias or error. A 360-degree feedback process, discussed in Feature Box 9.3, has become a popular approach to using multiple sources. Whether using just one source or multiple sources, it is important that the selected sources are appropriate for the job being evaluated.

Error in Performance Review

Every method of measuring performance is vulnerable to error. The consequences of error in performance assessment are that our evaluations are inaccurate. This can lead us incorrectly to take (or to refrain from taking) action, which in turn might result in serious consequences for an organization. For example, if a supervisor fails to notice poor performance, then it is unlikely that the worker’s performance will change, and thus organizational performance will be lower. Other workers can also be demotivated by poor performance that is not remedied. Conversely, if a supervisor fails to notice good performance and thus fails to allocate expected rewards (e.g., praise, bonuses), then a worker can become demotivated, cease the desirable behaviour, and possibly begin to look for work elsewhere.

There are many potential sources of error.

• • Validity or reliability error: As discussed in Chapter 3, validity and reliability are important aspects of any organizational decision-making process. A valid measure of performance considers factors relevant to performance. A reliable measure of performance consistently measures the same thing across different workers, jobs, and times. Issues with reliability and validity can occur when HR practitioners do not adequately operationalize the concepts that they are trying to measure. For example, a worker’s ability to operate effectively in a team might be measured by assessing that worker’s contributions to the team’s performance. In contrast, asking whether the worker “gets along well with others” is not a valid measure of that worker’s teamwork ability. Similarly, assessing revenue generated by workers from sales against historical revenues might be an appropriate measure normally but would not be a reliable measure during a pandemic (when sales are affected by factors unrelated to workers’ performance). Sometimes measures are appropriate for one purpose but not for others, as shown in Feature Box 9.4.
• • Lack of clarity: One of the most common errors is establishing standards or creating measures that are not clear. The “gets along well with others” example above is an unclear standard or measure. What does “gets along well” mean in this context? A more precise phrase (e.g., “offers constructive criticism”) can measure more accurately the desired behaviour. Clarity in scales is also important. What is the difference between “good” and “fair” performance? Terms should be well defined and differentiated. The BARS example in Figure 9.2 shows clear criteria.
• • Halo and horns effect: This effect is the tendency to allow an assessment of one trait to influence the rating of other traits. For example, someone who does not “get along well with others” might also (and undeservingly) be rated more negatively by a supervisor on other traits, such as productivity or attention to detail, because the initial negative rating affects the supervisor’s judgment.
• • Recency effect: Weighting more recent observations more heavily than older experiences, whether positive or negative, is another common error. For example, a poor performer who does a great job immediately before an assessment might receive a more positive rating than warranted if behaviour during the entire assessment period is weighted equally.
• • Central tendency: Psychologists have found that people are more reluctant to score on the extremes of a scale and more likely to cluster their scores in the middle.12 This tendency can affect performance evaluation, with supervisors clustering their ratings in the middle of the scale to avoid being perceived as overly generous or harsh.
• • Bias: Often evaluations can be shaped by a supervisor’s views about workers’ characteristics unrelated to performance, such as gender, ethnoracial background, or age. These biases can seriously impair the accuracy of an evaluation. Some researchers have found that fewer than half of ratings are related to performance, with most based on idiosyncratic factors.13 If these biases remain consistent, then over time they can become apparent to others and give rise to a human rights complaint. Often supervisor bias is related to a similar-to-me bias (discussed in Feature Box 9.5).
• • Intentional error: The stakes associated with performance assessment are often material (e.g., wages, promotions). This can result in intentional efforts to distort the results of performance evaluation. Managers might alter their assessment to help a friend, to punish a worker whom they do not like, or to make themselves look good. Workers might work together to “game” a peer review process, giving each other positive scores to subvert management’s efforts to rank them.

Reducing the potential for error in performance assessment starts with carefully designing the evaluation instrument(s). Using quantifiable and objective measures of behaviour and outcomes whenever possible can limit some forms of error. Training supervisors to spot bias and avoid error-creating tendencies helps to reduce error, as does using multiple independent raters. Finally, creating a process of feedback, in which the process of evaluation is regularly assessed, can help to improve the process over time and reduce the likelihood of persistent errors.

Analyzing Performance and Providing Feedback

Once the performance assessment has been completed and a score/evaluation has been assigned to a worker, a supervisor must decide how to translate the results of the assessment tool into tangible feedback and a preliminary action plan. For workers at the extremes, the conclusion might be clear. For a strong performer who gets high evaluations on every metric, the feedback will be highly positive, and the discussion might focus on finding routes for advancement or more challenge and responsibility. For a consistently weak performer, the focus will be on strategies for improvement or discipline (discussed below).

It is more challenging to develop a plan to provide feedback to a worker who receives a mixed evaluation. A good place to start is for a supervisor to develop a preliminary explanation for any performance that falls below expectations. Figure 9.2 identifies a series of questions that supervisors can ask themselves about the factors driving a worker’s performance prior to meeting with the worker to discuss the performance.

The questions in Figure 9.2 reflect the various barriers that can exist to impede acceptable worker performance. It is easy to attribute poor performance to a lack of effort by a worker (a version of blaming the worker mentioned in Chapter 2). A lack of desire is rarely the full explanation for poor performance. The range and sequence of the questions in Figure 9.2 are designed to identify all of the barriers that can contribute to poor performance. The remedies to each barrier are different.

• • Expectations: Workers can fail to meet expectations because they are unaware of them or do not fully understand them. Clarifying expectations, policies, and processes can eliminate this barrier.
• • Ability: A worker might lack the knowledge, skills, or abilities to perform work. If this is the case, then training can eliminate this barrier.
• • Resources: A worker might lack particular resources necessary to perform work adequately. This issue can be resolved by providing resources, such as tools, authority, staff, or funding.
• • Opportunity: A worker might not have the opportunity to meet the performance expectations. This might reflect a lack of time to perform the work. Or a worker might face uncooperative co-workers or a change in external conditions, such as a recession. All of these circumstances are barriers over which workers have little control.
• • Desire: A worker might not be interested or sufficiently motivated to perform a job acceptably. This barrier can be addressed by attaching rewards or penalties to a worker’s behaviour. It might also require considering the worker’s personal circumstances and how they are affecting job performance. A temporary or ongoing personal issue might require accommodation or other action by the organization. A job designed in a way that makes it unpleasant to perform or that is poorly compensated can also negatively affect a worker’s motivation.

This preliminary diagnosis of the causes of unacceptable performance can be useful in framing any discussion with a worker. It also allows an HR practitioner to give some initial consideration to which remedial actions are cost effective for the organization and which are not.

Once supervisors have gathered and analyzed performance data, they must communicate the results of the performance evaluation to affected workers as well as other organizational actors. Most of the time, workers receive feedback during a formal meeting with their supervisors, although different methods (e.g., letter, email) can also be used. Feedback meetings should not be seen as a one-off activity but as part of the ongoing manager-worker relationship. Feature Box 9.6 offers recommendations on how to handle the meeting.

If the evaluation identified areas requiring improvement, then it is important to spend time explaining to the worker which performance is of concern. Building a shared understanding of the issue can lead to a more productive discussion of the underlying reasons. Asking a worker to explain the reasons for the unsatisfactory performance is a useful way to ascertain the validity of the preliminary diagnosis (see Figure 9.2) that a supervisor has completed. This discussion can support the supervisor’s initial thoughts about how to improve the worker’s performance. Or it can identify barriers that the supervisor was unaware of and necessitate rethinking the actions and goals that should improve performance. This discussion can then lead to goal setting with the worker, identifying specific changes or levels of performance on which to base subsequent assessments.

Discipline

Sometimes unsatisfactory performance requires an organization to discipline a worker. Discipline comprises measures designed to alter a worker’s behaviour by attaching consequences to undesirable behaviour. Discipline can take many forms, including verbal warnings, letters of reprimand, suspensions, demotions or transfers, and ultimately dismissal. As discussed below, the exact disciplinary options available to an organization depend on the nature of the employment relationship.

Discipline typically occurs in two circumstances.

• • A worker is unresponsive to efforts to improve performance. For example, a worker might fail to meet certain performance standards or have an ongoing issue with tardiness. The employer might decide that the inadequate performance stems (at least in part) from a lack of effort by the worker and therefore might attach consequences to the behaviour in the hope of motivating change.
• • A worker behaves in a way that breaches organizational policy or the employment contract in a manner that warrants some form of discipline. Discipline imposed for this sort of violation is also expected to alter the worker’s future behaviour. It is important to note that discipline can be imposed for actions at the workplace and outside it, even for things posted on social media (see Feature Box 9.7).

One of the paradoxes that HR practitioners face when disciplining workers is that usually discipline is an effort to improve a worker’s behaviour by both punishing the worker and (at least implicitly) threatening further punishment. Consequently, discipline can require HR practitioners to navigate and manage complicated interpersonal dynamics. Workers who disagree that their behaviour warrants punishment can be resentful, and this can reduce the likelihood of meaningful behavioural change (although they might comply in a pro forma manner) and, indeed, result in workers reducing their discretionary efforts.

Supervisors who wish to discipline a worker might see the worker’s behaviour as a challenge to their authority. For example, repeated tardiness by a worker even after a supervisor has directed the worker to show up on time is doubtlessly frustrating for a supervisor and can result in anger, which can then cause the supervisor to impose discipline beyond what is likely warranted. Overdisciplining a worker can undermine the chances that the behaviour will be altered. Overdisciplining can also expose the organization to risk. For example, the worker might complain about being overdisciplined, and this can negatively affect the morale of other workers and make the organization less attractive to potential workers. Workers are also more likely to use legal means to dispute discipline that they perceive to be unfair.

Discipline is normally preceded by an investigation. The size and sophistication of an organization will shape who performs the investigation, as will any procedural obligations that it might have under a collective agreement. In a large organization, investigations of minor issues might be conducted by a supervisor or manager, whereas more complex issues or those potentially resulting in termination (e.g., harassment or theft) might be referred to a more experienced investigator (e.g., HR practitioner, outside investigator). In smaller organizations, the owner or most senior staff member might end up handling all such investigations.

Typically, an investigator gathers information about the issue(s). This can include reviewing organizational records and taking statements from witnesses. If this preliminary work suggests that indeed there might be an issue warranting discipline or other action, then the investigator might inform the worker of the investigation and, at some point in the process, give the worker an opportunity to hear and respond to the allegations. This approach to discipline reflects broadly accepted norms associated with natural justice. These norms include the right to a fair hearing in which an individual can learn about the case against them and provide a response. Disciplinary processes that accord with broadly accepted notions of fairness are more likely to result in outcomes that all parties will accept.

At some point, the investigator will have enough information to come to a conclusion about whether or not a worker’s conduct warrants discipline. The first step is to decide if the worker did what they were accused of doing. The usual standard for making this decision is the balance of probabilities (i.e., is it more likely than not that the worker behaved in a particular way?). This standard is lower than that of beyond a reasonable doubt used in criminal matters. Since discipline often can be disputed by a worker, an investigator normally creates a written record of the decision and the rationale for it, including any relevant evidence gathered.

If the worker did what they were accused of doing, then the employer must decide (1) if discipline is warranted, and (2) what discipline to impose. In theory, these are separate decisions. In practice, the line between them is blurry. An organization might engage in internal bargaining on these decisions. For example, if there is weak evidence that discipline is warranted, but a supervisor pushes hard for discipline, then the worker might be disciplined, but the penalty imposed might be modest (in the hope that the worker does not dispute the discipline). This type of horse trading reflects that discipline is both a technical process and a political one.

Most of the time, discipline is applied in a series of escalating steps called progressive discipline. Its logic is twofold. If the goal is to correct behaviour, then imposing the lightest possible discipline is most likely to trigger the desired change. If the light discipline is not effective, then increasingly heavy discipline can be applied gradually until the worker complies or is terminated. In this way, progressive discipline serves the goals of being both proportional and non-punitive (i.e., directed toward improving behaviour). It also provides the employer with a written record of repeated efforts to inform and assist the worker. This record can serve to justify any potential dismissal. An example of progressive discipline is found in Feature Box 9.8.

Although discipline can take many forms, the law can restrict the kinds of discipline that an organization can impose. As stated in Chapter 2, the common law imposes certain rights and duties on employers. One of an employer’s duties is to provide a worker with the opportunity to do the job that the worker has agreed to perform. If an employer prevents a worker from doing that (e.g., by suspending the worker as a form of discipline), then the worker can claim that the employer has breached the employment contract and seek damages for wrongful dismissal. One way around such limitations is for an employer to specify at the time of hiring various penalties that it can impose during discipline. Some organizations do this by writing an employee handbook outlining the process of discipline and penalties and then incorporating the terms of the handbook (as amended from time to time) into the employment contract. Unionized employers can also face limitations on discipline set out in the collective agreement.

Termination

Every employment relationship comes to an end, one way or another. Most of the time, termination occurs through voluntary turnover when an employee initiates termination by retiring or quitting. Involuntary turnover is when the employer decides to end the employment relationship. Under common law, employers are permitted to terminate the employment of non-unionized employees without their consent but must do so in a particular fashion. There are two basic ways to terminate an employee: with notice and for cause.

Employers can terminate an employee at any time and for any reason as long as they provide reasonable notice of the termination. In practice, and in lieu of notice, employers often provide a payout equivalent to the number of weeks of notice required under the common law. Reasonable notice is considered to be an implied term in all employment contracts (meaning that the contract does not have to stipulate a notice period for one to exist). What length of time is reasonable is variable and depends on the worker’s occupation, age, length of service, and availability of other employment. Depending on those factors, reasonable notice can be calculated to be anything up to about 24 months. Legal advice should be sought to determine which notice period is reasonable for each situation.

Some organizations set out in their employment contracts what reasonable notice means. Doing so eliminates uncertainty for both the employer and the worker. Contracts can stipulate that reasonable notice is a fixed period of time or linked to the duration of the employment contract. The only limitation on the agreed-to period of notice is that it must be at least as long as the statutory minimum notice period set out in the relevant legislation (e.g., labour or employment standards acts) discussed in Chapter 2. Organizations that seek to minimize the period of reasonable notice might find that they must make other aspects of the employment offer (e.g., wages) more attractive to offset this potential loss to the worker.

Termination for (or with) cause allows the employer to waive the notice period and dismiss the employee immediately. This form of termination is sometimes called summary dismissal. To terminate a worker for cause, the employer must have a good reason (i.e., cause). Feature Box 9.9 outlines common grounds accepted by the courts to justify summary dismissal. A key legal principle underlying termination for cause is proportionality. The consequence (dismissal) must be proportionate to the severity of the employee’s misconduct.

Workers terminated for cause can dispute their termination by filing a lawsuit alleging wrongful dismissal (unionized employees can have their union file a grievance). The nub of such a suit is the claim that the employer breached the employment contract by not providing reasonable notice of termination. Although the high cost to an employee of filing a wrongful dismissal suit means that they are uncommon, successful suits can entail significant monetary and reputational costs to an organization. To eliminate the risk of such suits, organizations sometimes seek to address conduct that warrants dismissal by getting workers to agree to dismissal. Such agreements (sometimes called a buy-out) often include a monetary settlement, a non-disclosure agreement, and a letter of reference in exchange for a letter of resignation. Such agreements attenuate the risks associated with an involuntary termination for both parties.

A special, and complex, form of wrongful dismissal is constructive dismissal. It occurs when an employer makes a fundamental change to an employment contract tantamount to terminating it. In other words, if a material condition of employment is unilaterally changed by the employer, then the employee can claim that the employer, in effect, wrongfully dismissed them. To make such a claim, the employee would need to quit and sue for wrongful dismissal, ostensibly arguing that they were forced to quit by the employer’s change to the contract. An example is if the employer unilaterally reduced a worker’s salary by 25%. The salary is part of the employment contract, and, by reducing it without specific authority in the contract to do so, the employer has violated the terms of the contract and thereby terminated it. Common situations that can give rise to claims of constructive dismissal include reductions in compensation and benefits, changes to a job assignment (including demotion), reassignment to a different location, temporary layoff, unpaid suspension, and harassment.

Conclusion

Job design (Chapter 3) and performance management are the main HR functions that help organizations to convert workers’ capacity to work into actual work. In this chapter, we outlined key techniques designed to maximize workers’ performance. They include defining expectations, providing feedback, and taking steps to correct deficiencies in workers’ performance. We also explored the related topic of disciplining workers, including terminating them when their performance is unsatisfactory.

In the case of Donald Babcock, the implementation of a structured performance management system at the workplace likely would have prevented the legal troubles that ensued. This vignette highlights the importance of making sure that all aspects of performance management are functioning appropriately. It also shows how crucial monitoring performance is to the smooth running of an organization and the perils that organizations face if they jump too quickly past performance management to discipline and termination. Finally, it illustrates the importance of keeping clear records so that an employer can demonstrate that it took appropriate steps and met its obligations to a worker.