Every business has times when an employee’s performance doesn’t meet expectations. It might be missed deadlines, errors, poor communication, or simply not keeping up with the demands of the role. For small business owners, it can be uncomfortable to address but ignoring the problem usually makes things worse. The key is to manage performance issues fairly, consistently, and in line with New Zealand employment law.
The first step is to make sure your expectations are clear. Often, performance problems start because employees aren’t entirely sure what “good” looks like. Make sure job descriptions are up to date, and talk openly about what’s expected in terms of quality, deadlines, teamwork, or customer service. Sometimes, a simple conversation and a bit of coaching can turn things around without the need for a formal process.
If things don’t improve, it’s important to document what’s happening. Keep notes of conversations, examples of mistakes or concerns, and any feedback you’ve provided. This helps ensure you have a factual basis for any next steps and protects your business if the issue becomes more serious later on.
Before jumping into formal action, check whether there might be other factors at play. Is the person struggling with training gaps, unclear processes, or personal issues? Are workloads reasonable? Has their performance changed suddenly, or has this been an ongoing pattern? Taking time to understand the “why” behind poor performance shows good faith and helps you find fair solutions.
Throughout any performance management process, communication is key. Keep discussions respectful and focused on behaviours and results, not personality. Be specific about what needs to change and what success looks like.
If, after a fair and reasonable process, performance doesn’t improve, you may have grounds to take further action, which could include a formal warning or, in some cases, termination. It’s important that any steps you take are fully compliant with New Zealand employment law, including giving the employee a genuine opportunity to respond, following a fair process, and ensuring decisions are based on clear, documented evidence.
By managing performance issues the right way, you protect both your business and your people. Most importantly, it shows your employees that you care about fairness and development, not punishment. With a structured, respectful approach, even difficult situations can lead to better outcomes for everyone involved.
If you’re unsure about how to handle a performance issue or want to make sure your process is legally sound, proHR can help. We support small businesses with practical, compliant HR advice and documentation tailored to your situation. Get in touch for guidance before you take the next step.
