The five steps between “I’m not happy with their performance” and a fair outcome
A large global employer in New Zealand recently learned what poor performance management costs. A young employee in her early twenties received an out-of-the-blue email inviting her to a ‘performance management meeting’ with three senior people: the head of HR, her manager, and a business partner. No prior formal feedback. No representation offered. No documented improvement process. Just an ambush dressed up as a meeting.
When her family reached out for help, we asked the company one question: show us the training you provided to make her successful in this role, given she didn’t have the relevant experience when you hired her.
They couldn’t produce a single document.
The next communication we received was a settlement offer. Our client left the workplace with compensation and her dignity intact. The company paid for a process they should have run properly from the start.
That story plays out in New Zealand businesses more often than you’d think, and not always at the scale of a global employer. Most of the time it starts with a frustrated owner or manager who’s been stewing on a performance issue for months and finally decides to ‘do something about it’. The something they do is usually formal performance management, and that’s where the trouble starts.
Performance management done well protects your business and gives your employee a fair shot at improving. Done badly, it’s expensive. Here are the five steps that get you to a fair outcome.
Step 1: Have the informal conversation first
Performance management is a later-stage tool, not your opening move. Before anything formal happens, you need to have had honest, documented conversations about what’s not working.
A lot of employers get stuck at this step. They’ve been frustrated for months, vented to colleagues, stewed in the office at 9pm wondering what to do. But they’ve never actually told the employee what they’re frustrated about.
If your employee is enthusiastic and willing but slow, tell them. If their reports are late, tell them. If you expect them to be at 100% and they’re at 60%, tell them, and ask what you can do to help them get there.
Use your regular one-to-ones. If you don’t have regular one-to-ones, that’s the first thing to fix. The conversation might sound like:
“You’re doing really well in these areas, and I value that. But my expectation is here, and you’re currently around 60%. What can I do to help you close that gap?”
If they say they can do it, great. Make a note that you offered help and they accepted the challenge.
Step 2: Document everything (and share it)
A lot of employers take notes in their own diary and assume that’s enough. It isn’t.
For documentation to protect you, the employee has to see it. After every meaningful conversation, write up a quick summary and email it to them. Even a handwritten note in your diary works, as long as you photocopy or scan it and send it across.
Keep it factual. No derogatory comments, no emotional language, no personal opinions. Stick to what was discussed, what was agreed, and what support you’ve offered.
If you ever end up at the Employment Relations Authority defending a dismissal, this paper trail is the difference between winning and writing a settlement cheque.
Step 3: Build a fair performance improvement plan
If informal conversations haven’t moved the needle, it’s time for a performance improvement plan (PIP).
What should be included in a performance improvement plan? A good PIP needs:
Clear, specific expectations — what good performance looks like in measurable terms
A realistic timeline — typically four weeks for small businesses, six to eight weeks for larger organisations where workload can be redistributed
Defined check-in points — weekly or fortnightly catch-ups during the PIP period, not a single conversation at the end
Support and resources — training, mentoring, tools, or whatever the employee genuinely needs to succeed
What happens next — be transparent about the fact that if performance doesn’t improve, formal performance management may follow
How long should I give an employee to improve their performance? It depends on the role and your business size, but four to eight weeks is the standard range. Anything shorter looks like you’re setting them up to fail. Anything longer without check-ins, and you can’t credibly say they had clear feedback throughout.
The check-ins are non-negotiable. Waiting six weeks and then announcing they’ve failed isn’t fair process, it’s an ambush.
Step 4: Run the formal performance management process
If the PIP doesn’t deliver improvement, formal performance management kicks in. By this point, most employers have lost their appetite to keep developing the employee and want to move toward an exit. That’s understandable, but the process still has to be fair.
How do I start a formal performance management process? Send a written invitation to a performance meeting that includes:
The specific concerns you’ll be discussing (with evidence)
The potential outcomes, including the possibility of dismissal if that’s on the table
Their right to bring a support person or representative
Reasonable notice, more than two working days at minimum, with more time for serious matters
In the meeting, present what you’ve assessed, what support was provided, and what the gap is. Then give the employee an opportunity to respond. They might have context you didn’t know about. They might raise issues with your evidence. Listen properly.
After the meeting, share a preliminary outcome in writing and give them another opportunity to comment before you make your final decision. This isn’t a formality. If you’ve already decided the outcome before they respond, it’s not a fair process.
Step 5: Make a defensible decision
Your final outcome needs to be supported by the evidence you’ve gathered and the process you’ve followed. Options include returning to a further PIP, issuing a formal warning, or termination if the matter is serious enough and process has been followed.
Whatever you decide, document it thoroughly and communicate it in writing.
What about grievances during the process?
Can an employee raise a grievance during performance management? Yes, absolutely, and they often do. That’s why process matters so much.
An employee who feels they’ve been treated unfairly can raise a personal grievance at any point. Common claims include unjustified disadvantage (the process itself was unfair), constructive dismissal (the pressure was so unreasonable they had no choice but to leave), or unjustified dismissal if termination follows.
The defence against all of these is the same: a fair, well-documented process where the employee was given clear expectations, good support, real opportunities to improve, and a meaningful chance to respond before decisions were made.
Before you send that meeting invite…
The global employer at the start of this article didn’t lose because their employee was a great performer. They lost because they couldn’t prove they’d given her a fair shot. That’s the lesson worth holding onto.
If you’re heading into a performance conversation and you’re not sure your foundations are solid, talk to us before you send the meeting invite. Our first conversation is on us, with no fees until we’re doing work for you. A quick call now is a lot cheaper than fixing it after the fact.