Performance Management vs Disciplinary Action: What is the difference?

Understanding the difference between underperformance and misconduct is crucial for employers. Getting this distinction right ensures the appropriate steps can be taken to address the issue while protecting a business from unnecessary risk.

At times, the line can feel blurred - performance and conduct are not always mutually exclusive and situations may overlap. However, diagnosing the issue correctly matters. Each is managed through a different process and mismanaging or misclassifying the situation can lead to legal risks for a business.

Performance Management: A Path to Improvement

Performance management is about identifying skill gaps and giving employees the support they need to succeed. It’s a proactive approach that helps businesses improve capability, align individual performance with company goals and boost overall efficiency.

Key elements of effective performance management include:

• Setting clear expectations: Employees can thrive when they fully understand their roles, responsibilities and the standards expected of them.

• Providing regular feedback: Constructive, timely feedback keeps employees on track and motivates them to reach their potential.

• Training and development: Offering learning opportunities or implementing a structured performance improvement plan creates a pathway for underperforming employees to grow and succeed.

  
  

Disciplinary Action: Addressing Misconduct

Disciplinary action is a formal process used when an employee breaches workplace standards, policies or laws. The focus is on correcting behaviour, reinforcing expectations and ensuring consistency across the business.

Examples of misconduct include:

• Failure to meet deadlines: repeatedly missing deadlines or failing to deliver work as agreed.

• Failure to follow lawful and reasonable direction: refusing to comply with legitimate workplace instructions.

• Serious misconduct: wilful or deliberate behaviour inconsistent with continued employment, such as theft, fraud, harassment or creating serious health and safety risks.

When disciplinary action is required, it is important that the process is transparent, well-documented and conducted with procedural fairness. This approach protects the business while also ensuring employees are treated with respect, given clarity and provided the opportunity to respond before any final decision is made.

When Performance and Conduct Overlap

Sometimes performance and conduct issues cross over. For example, an employee may be struggling to meet the requirements of their role (a performance issue) but also refuses to take lawful and reasonable directions (a conduct issue).

In these situations, it’s best to start with performance management - giving the employee support, feedback and a chance to improve. If the issues continue and there is no improvement, the matter can then be escalated to a disciplinary process.

Proceeding straight to disciplinary action without first attempting to manage performance can be risky. It may be seen as unfair and could leave your business exposed to complaints or legal challenges. A fair process, where the employee understands the concerns and has the opportunity to respond, protects both your business and your people.

For businesses, understanding the difference between performance management and disciplinary action is essential. Handling each issue through the right process not only protects your business from risk but also builds a workplace that is fair, supportive and productive.

Strong people management builds strong businesses.

If you’d like expert advice on performance or conduct concerns in your workplace, email info@peopleandcultureinnovations.com.au and we would love to provide you with a free consultation.