The previous issues of Labor InFocus reviewed the first 2 steps of the legal criteria for managing poorly-performing workers – step 1: make appropriate provision for taking action; step 2: utilize a fair and reasonable Process for identifying an underperforming worker. This issue will introduce the 3rd step.
Step 3: Providing Opportunity for Improvement
Although a company may have identified low performers through fair and reasonable processes, efforts by the company to provide the low performer with an opportunity to improve are required in order to validate the final HR decision.
1. Providing time for improvement through probationary periods
Before making the final HR decision of firing low performers, a company should provide them with an opportunity to improve their skills and knowledge while suspending them from their original jobs. In principle, HR actions such as employee suspension are at an employer’s discretion, as an employer’s authority and power over personnel matters are recognized as part of the successful management and operation of a business. Unless an employer’s HR measures are illegal or an abuse of power under the Labor Standards Act, those measures should be regarded as legal management policy.
Suspension of employees is similar to other disciplinary actions in that there must be a justifiable reason for the action. Whether such suspension is justifiable or not is determined by the following requisites – the suspension must be necessary in terms of the operation of the business, severity of measure, and there must have been prior consultation with the employee concerned.
In particular, in a situation where an employee is suspended from work due to his/her lack of ability or improper attitude at work, the employee could question the company’s judgment. Therefore, an employer should have justifiable and objective reasons to prove that the suspension of an employee is appropriate.
Several cases have shown that there are many issues regarding suspension as a way of improving a low performer’s job skills. As this matter is still very controversial in Korea, employers need to carefully review their HR management policies.
1) Refrain from suspending low performing employees for extended periods
An employer should be cautious about suspending low performers for long periods of time because this could be considered an abuse of personnel management authority even though such decision was made through reasonable processes, and may be viewed as a way of dismissing low performers, without the opportunity to improve their job skills.
2) Provide continuous support and communication employees during the suspension period
During the suspension period of a low performer, the employer should provide continuous support to help improve the job skills and abilities of the worker. Whether an employer makes enough effort for continuous support and communication with a suspended employee is a key factor in determining the legitimacy of a dismissal.
3) Accept transfer request from the employee, if possible
If a suspended low performer requests a transfer to another position during his/her suspension period, it is recommended that the company accept such a request. By doing so, the company’s action could be recognized as a positive opportunity for low performers to improve.
2. Operating performance improvement program for low performers
Legal courts in Korea take it as an important criterion whether there is an appropriate performance improvement program in place for low performers in determining the legitimacy of dismissal. If a program is deemed to be designed to fire a particular employee, such dismissal will be invalidated and could be a cause for damage compensation to the employee.
Therefore, a performance improvement program should be in operation to help low-performing employees rebuild and improve their job skills. So what is an employer to do? According to relevant court rulings, key factors to determining the legitimacy of a performance improvement program for low-performing employees are as follows:
1) Design and operate the program through consultation with employees
It is desirable to discuss the performance improvement program for low performers at official meetings of labor-management council for more reasonable and appropriate operation of the program. Also, specific reward criteria and processes (reinstatement, etc.) for an employee who has significantly improved through the program need to be stipulated.
| Relevant Provisions in the Act on the Promotion of Worker Participation and Cooperation |
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Article 20 (Matters Subject to Consultation) 1-2. Recruitment, placement, education and training of workers; 1-6. General rules for employment adjustment, such as reassignment and transfer, retraining and dismissal of workers for managerial or technological reasons, etc.;
Article 21 (Matters Subject to Resolution)
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Another important thing is feedback from management: the program participants need to be encouraged through continuous feedback during the retraining. In the past, Korean courts have ruled that it is important that low performers be motivated and advised of what has to be improved and what has been improved, through personal interviews with their managers or superiors at every stage of the program.
2)Providing targeted improvement training
Training for low-performing employees needs to be targeted and monitored. For example, an employee who seems to lack professional knowledge should receive training for professional certificates. In this regard, Korean courts do not recognize any training or improvement programs which have nothing to do with the worker’s improvement.
3)Allow adequate time to improve job skills
In order to support low performers in their efforts to achieve their improvement goals, they need to be allocated an appropriate period of time. If their goals are unachievable or if they are not allowed an adequate period of time for self-improvement, the courts deem that the employer has not made enough effort for continuous employment.
As well, the program for low-performing employees needs to be run in phases and, at each stage of the program, adequately improved employees should be returned to work as a reward. This means that the employer must have the willingness and intention to retain the employment relationship. In the past, Korean courts have considered a 3-stage improvement program over a 7-month period as constituting fair and realistic training for the improvement of low performers.
4) Observe the agreed-upon processes between labor and management
If workers and management have previously reached an agreement on certain criteria for HR measures such as suspension and the improvement process for low performers, the introduction of an improvement program which has not been agreed upon could be problematic. While the agreed-upon improvement program is predictable, any program unilaterally changed by an employer is against the principle of good faith.
5) Produce tangible results: return them to work
After running the program for low performers, an employer is advised to return the participants who show adequate improvement to their jobs. This serves as proof that the program is successful, and that the employer intends to retain previously low-performing employees, based on their results, in addition to proving the company’s productivity and HR efficiency through personnel retraining. Low performers who participate in the program need to be assigned achievable goals in order to motivate the participants and secure positive results.
Step 4 (Final): “Reinstatement and Disciplinary Measures” will be covered in the next issue of Labor InFocus.