What is underperformance?
Employees are expected to perform the tasks assigned to them to the standards set by the employer. Standards of work performance vary from time to time because businesses modify their operations, procedures and processes to increase their productivity. Underperformance occurs when employees fail to meet the expectations of the employers and fail to provide work output that meets the standards set by the employer. Poor performance results in increased customer or client dissatisfaction, high client turnover, work left undone, or work not done within set deadlines.
Underperformance is not the same as misconduct but is related to poor performance or non-performance of work. Underperformance, poor performance and non-performance of work are usually dealt with by the employer through a process called performance management.

Why do employees underperform at work?
Employees underperform when they are unsure of or uninformed of the employer’s standards or expectations. It is possible that when the employee was hired, the employee’s abilities were mismatched with the duties and of the role or position they were given. It is possible that employees have too high a standard or expectation of their employees. It is also possible that employees are not given feedback on their work performance and so they are unclear when they perform well and when they do not perform well.
Work conditions and work environment likely play a role in employees’ underperformance at work. Employees may have interpersonal differences with colleagues at work. There may be cultural differences or misunderstanding between co-workers. The employee may be experiencing workplace bullying or harassment. The employee may be experiencing personal issues, health issues which result in low morale and motivation at work.
What can employers do when their employees underperform?
Employers can put underperforming employees under performance management. Performance management is a process which includes any or all of the following steps:
- The employer privately meets with the underperforming employee and informs and clarifies for them what the employer’s expectations, goals and standards are.
- The employer discusses the underperformance of the employee, specifically detailing to them the areas where they do not meet the employer’s expectations or standards.
- The employer and the employee discuss strategies for the employee to improve their performance including training or retraining of the employee.
- The employer gives the employee a reasonable timeframe, usually 6-12 weeks, to improve their performance.
- The employer and the employee reduce to writing what has been discussed (above) as performance improvement plan.
- The employer regularly reviews the performance of the employee.
- The employer notes areas of improvement and areas of persistent underperformance.
- The employer informs the employee of the possible consequences to them if their underperformance persists despite support and management.
What can an employer do when an employee persists in underperforming ?
When employees’ underperformance persists despite training, retraining and performance management, the employee must, generally speaking, give the employee a warning that if their performance does not improve, they are at risk of dismissal.
The employee must be given the opportunity to respond to these allegations of underperformance before dismissing the employee.
The employer must also allow the employee to bring a support person to the meeting where dismissal is possible (only if the employee requests a support person).
Is Performance Management Bullying?
The objective of performance management is to ensure employee productivity and minimise employee turnover.
However, sometimes employees who are placed under performance management make allegations that the performance management constitutes bullying.
Certainly, there are times when this is true, if the performance management is done in bad faith.
However, if performance management is done properly and in good faith – it cannot constitute bullying.
Case sample: Amie Mac Case
Let’s examine the case of Amie Mac v. Bank of Queensland Limited; Michelle Locke; Matthew Thompson, Stacey Hester, Christine Van Den Heuvel; Jane Newman [2015] FWC 774 (13 February 2015).
A solicitor was hired to work as part of a Group Legal Team to handle enquiries from all branches and subsidiaries of a bank. They also provided legal assistance in drafting contracts and handling bank clients. Ten months after being hired, the solicitor was asked by her immediate manager into a performance review meeting where she was found competent. However, in the next two annual performance reviews in 2012 and 2013, there were serious issues with her work performance.
For one, the volume of her work output did not reflect the hours the solicitor worked. Her 6-month performance review in 2013 resulted in a “needs development” assessment. It was noted that unlike the other solicitors in her team, she only responded to a total of 16 queries when others responded to 28. She was informed that she had the lightest workload but also the highest turnaround time. Toward the end of 2013, her manager noted her efforts to improve her performance and marked the solicitor’s performance as “low level competent”. The manager discussed the solicitor’s performance with her immediate supervisor and with the head of Group Legal. They decided to downgrade the solicitor’s performance rating to “needs development” once more. Because of this rating, the solicitor did not receive a yearly salary increase for 2013.
The solicitor was called to a meeting where she was informed that she would be placed under a performance improvement plan for 12 weeks. They gave the solicitor a copy of the proposed performance improvement plan. The document contained the warning that if the performance standards remain unmet, or if the agreed upon outcomes were not provided by the solicitor, they will be considered in breach and the solicitor will be disciplined and may be terminated.
After a series of meetings, the solicitor signed the Performance Improvement Plan (PIP) in January 2014. However, even after the solicitor signed it, they indicated on the document that she had been asked to sign the PIP without explanation and without having been given the opportunity to respond.
Under the PIP, the solicitor met with her manager once weekly to assess her performance but the solicitor still did not perform up to standard as she continued to give wrong information to client enquiries, she communicated poorly with bank clients. Her immediate manager contacted the client of the bank for which the solicitor did work and the manager discovered that even the bank’s client was dissatisfied with the work performance of the solicitor. Thus, the manager asked to meet with the solicitor to inform them that they were already in breach of the Performance Improvement Plan.
The solicitor then went on sick leave due to acute stress. The solicitor’s doctor found that she was not fit for work and was later diagnosed with an anxiety condition with depressive features. The physician also found that this condition would affect the solicitor’s ability perform her role and duties. The solicitor then filed an application for orders to stop the bank and its officers from further bullying her.
The Fair Work Commission found that bullying constitutes any repeated unreasonable behaviour by individuals or a group of individuals toward a worker. The decision to place the solicitor on PIP was not unreasonable. The solicitor was duly informed of her underperformance. There is no indication that the solicitor’s managers acted with malice or sinister intent nor was there evidence that they conspired to cause stress or detriment to the solicitor.
It was necessary for the solicitor to prove that the decision of her managers to introduce the PIP had no factual justification for it to be considered unreasonable and the solicitor had not demonstrated this. The solicitor, in attempting to prove that the decision to place her under a PIP, claimed that the particulars of her underperformance were not provided to them. However, it is clear from the documents provided to the solicitor that the bank’s officers detailed factual circumstances but that the solicitor refused to accept those examples and contested them. The FWC found the bank officers’ actions constituted reasonable management action that was carried out in a reasonable manner. The solicitor’s application was dismissed.
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