A probationary period is a review/trial period, typically 3 or 6 months in duration, which is built into a new hire’s employment contract.
Why do employer’s use probationary periods? Well, research tells us that at best hiring processes are about 50 to 60% reliable, which means that employers can’t guarantee that the applicant will deliver on the promise shown at interview. Hiring is a bit of a gamble, like it or not. Because employers can’t be sure the new hire can work out, many prudent employers put new hires on a probationary/trial period at the end of which they assess performance. If the new hire is meeting standards, the idea is that they are confirmed as permanent, otherwise employment may be terminated. You can use probationary periods for both external hires and internal promotions if you like.
Another benefit of a probationary period to an employer is that there will typically be a shorter notice period during the probationary period – perhaps 1 week versus 1 month – and certain benefits may be with-held during the probationary period. This means that the employer is less financially exposed until the new hire becomes permanent.
How long should a probationary period be? The typical probationary period should last around 3 months, but they are often set closer to 6 months for more senior or complicated roles where performance cycles are a little longer.
How Can An Employer Introduce A Probationary Period. You’ll need to acquire an employment contract which includes a clause for a probationary period such as this one from Netlawman.
You will also need to set some clear performance goals and objectives for the probationary period and these should be clearly communicated to the new hire in writing at the start of the probationary period.
The employee should be informed that their performance will be assessed against these goals during the probationary period and that if they meet the required standards only then will their position be made permanent.
It’s vital that the probationary period is properly managed and the managers should meet with the employee throughout the period to assess ongoing performance and to ensure that they are receiving the necessary support that can be rightly expected from a person in that position.
Make sure that you do assess the employee’s performance before the end of the probationary period, because if the employee is allowed to stay on unchecked after the probationary period, they may become permanent by default in a legal sense.
I’d strongly recommend that you use a professional probationary period tracking form such as this one to help you manage the probationary period effectively.
If The Employee Fails The Probationary Period, Can it Be Extended?
As long as the employee’s contractual probationary clause allows for an extension, then the employer can extend the probationary period, typically for another 3 months. This extension will need to be implemented prior to the lapse of the first probationary period to ensure there is no risk of the employee passing their probationary period by default and the new hire must be provided with clear performance/improvements goals for the extension period. It’s all pretty much common sense really.
What If The New Hire Doesn’t Work Out and I Want To Dismiss Them At The End of The Probationary Period.
In the majority of cases, the new hire won’t have accrued enough service to allow them to bring an unfair dismissal claim against your business. This means you will be quite of lot of flexibility on your approach to dismissal. Assuming you have followed all the guidance above and implemented the probationary period procedures effectively you should have sufficient performance based and behavioural evidence to sit down with the employee to explain why you have decided to terminate them. You’ll ideally need to follow up the decision in writing, explaining your reasons, and make sure you pay them their contractual notice entitlement and any other benefits they are entitled to under the contract.
If you used the probationary period for an existing employee with longer service who was promoted, they may have sufficient service to qualify to be able to bring an unfair dismissal claim against your business should they feel aggrieved about the process. In these circumstances you follow the ACAS Code of Practice on Disciplinary and Grievance which you can find in this employee handbook.
You should consult a HR professional or employment lawyer before dismissing any employee.
Book a Phone Consultation With a HR Consultant
If you have read this article, but are still not quite sure how to proceed, but just have some general questions about how to manage staff in start-up environments, please consider booking a phone consultation with me, a qualified, HR professional.