When an employee falls short of expectations, managers often reach for familiar tools: a conversation, a warning or a Performance Improvement Plan.
The problem is that a PIP is not the right response to every workplace issue.
Poor performance and misconduct can sometimes look similar from the outside, but they raise different questions and generally require different management processes. Starting with the wrong assumption can make an already difficult situation harder to manage.
Before deciding whether an employee needs a PIP, disciplinary action or further investigation, you first need to understand what you are actually dealing with.
Performance and misconduct are not the same problem
A performance issue generally concerns whether an employee is meeting the expected standard of their role.
They may be missing targets, producing inconsistent work, making repeated errors or struggling with responsibilities that have changed over time. The underlying issue may involve capability, knowledge, training, unclear expectations or insufficient support.
A conduct matter is different. It concerns what an employee has done, or failed to do, and whether that behaviour may breach a workplace obligation, policy, lawful direction or expected behavioural standard.
Examples might include dishonesty, harassment, serious policy breaches, inappropriate behaviour or deliberate refusal to follow a reasonable direction.
The distinction matters because the questions you need to answer are different.
Performance issue | Conduct issue | |
Typical concern | Work isn’t meeting the required standard | Behaviour or actions may have breached an expected standard |
Examples | Errors, missed targets, inconsistent output, capability gaps | Dishonesty, harassment, policy breaches, inappropriate behaviour |
What you need to establish | What standard isn’t being met and why | What happened and whether an obligation or standard was breached |
Typical response | Clarify expectations, provide feedback and support improvement | Establish the facts, put concerns or allegations to the employee and allow a response |
Key management question | Can the performance gap reasonably be addressed? | What happened, and what response is appropriate? |
These categories aren’t always completely separate. A situation can contain elements of both. That is why diagnosis should come before process.
Why the distinction is not always obvious
The difficulty is that performance and conduct are not always separated by the type of behaviour you can see.
An employee may repeatedly miss deadlines because they lack the skills, resources or clarity to complete the work. Another employee may understand the requirement and repeatedly disregard a reasonable direction.
The outcome may look similar: the work isn’t being done. But the circumstances behind it are different, and those circumstances matter when deciding how to respond.
Workplace behaviour can also form part of underperformance. Fair Work guidance recognises that underperformance can include unacceptable behaviour, disruptive behaviour and failures to follow workplace policies or procedures.
That means the question isn’t simply, “Is this about performance or behaviour?”
You need to establish what happened, what standard applied, what the employee understood, and whether there is a performance gap to address or potential conduct that requires a different process.
In some situations, there may be elements of both.
When a PIP may be appropriate
A Performance Improvement Plan is useful when there is a defined gap between the required performance standard and what the employee is currently achieving.
It should not simply document that someone is underperforming.
A useful PIP identifies:
- the specific performance gap
- the standard or outcome required
- what needs to change
- what support will be provided
- how and when improvement will be reviewed.
The aim is to give the employee clarity about the gap and a genuine opportunity to address it.
A PIP may be particularly appropriate where additional coaching, training, clearer expectations or structured feedback could reasonably improve the situation.
Importantly, not every performance conversation needs to become a formal PIP immediately. Performance should generally be addressed early, before an issue has been allowed to compound for months.
Managing a performance issue?
Our Performance Improvement Plan guide explains how to structure a practical PIP, including a downloadable template. You can also find answers to common questions in our Performance Management FAQs.
When you may need a conduct process instead
Where the concern relates to possible misconduct, the process needs to focus first on establishing what happened. That may mean gathering information, reviewing documents or speaking with relevant people before reaching conclusions.
The employee should understand the specific concerns being raised and have a genuine opportunity to respond.
Depending on the circumstances and seriousness of the allegations, the matter may require a formal workplace investigation rather than an ordinary management conversation.
The important point is that the outcome should not be predetermined. A disciplinary process is not simply a mechanism for issuing a warning that management has already decided upon. The employee’s response and the available evidence need to be considered before decisions are made.
What happens when the process does not match the problem?
Using the wrong process matters because performance management and conduct processes are designed to answer different questions.
Treating a capability issue as misconduct can escalate too quickly
If the underlying problem is that an employee cannot yet meet the required standard, moving directly into disciplinary action may fail to address why.
The employee may need clearer expectations, feedback, training, additional support or a reasonable period to demonstrate improvement.
Fair Work guidance says employers should usually give employees an opportunity to address performance issues, although the appropriate process will depend on the circumstances.
A warning may still form part of performance management. The important point is that disciplinary action should not replace the work of establishing the performance gap and giving the employee a meaningful opportunity to address it.
Treating potential misconduct only as a performance problem can leave the facts unresolved
Where the concern involves a possible breach of policy, serious inappropriate behaviour, dishonesty or another conduct issue, the first question may not be how the employee can improve, but rather what actually happened.
That requires the employer to establish the relevant facts, clearly put the concern or allegations to the employee and consider their response before determining an outcome.
A PIP designed around future improvement does not, by itself, answer those questions.
Some matters change as more information becomes available
You will not always know exactly what you are dealing with at the beginning.
A performance discussion may reveal information suggesting a possible conduct issue. An apparent refusal to follow instructions may turn out to involve unclear directions, inadequate training or competing responsibilities.
In that case, managers need to remain responsive to the facts. If the nature of the concern changes materially, pause, reassess the issue and make sure the employee understands what is now being addressed before proceeding.
Don’t overlook health or other protected circumstances
A decline in performance can sometimes coincide with illness, injury, disability, mental health concerns or other circumstances that require additional consideration.
That does not mean performance standards disappear, but it does mean employers should be careful about assuming a change in performance reflects attitude or misconduct.
Where health, disability or another protected attribute may be relevant, the appropriate process may need to consider reasonable adjustments, medical information and discrimination obligations alongside normal performance management.
Get professional advice before deciding how the performance process should proceed or moving towards termination.
Before choosing a process, establish these four things
Rather than beginning with “Should we put them on a PIP?”, start with the facts.
1. What exactly is the concern?
Describe what happened without relying on labels such as “bad attitude”, “poor performer” or “difficult employee”.
- What work wasn’t completed?
- What standard wasn’t met?
- What behaviour occurred?
- What instruction or policy is relevant?
If you cannot clearly articulate the concern, you are not ready to choose the process.
2. What was the employee expected to understand?
Look at the position description, policies, previous instructions, KPIs, training and conversations. Was the standard genuinely clear?
Managers sometimes believe an expectation was obvious when it was never explicitly communicated.
3. What do you know, and what are you assuming?
Separate observable facts from management interpretation. “Three client reports contained errors” is a fact. “They don’t care about their work” is an interpretation.
That distinction is particularly important when determining whether you are dealing with a performance concern, a conduct issue, or elements of both.
4. What explanation has the employee given?
Do not diagnose the problem entirely from one side. There may be information about workload, training, competing instructions, health, resources or workplace relationships that changes how the issue should be managed.
An explanation doesn’t automatically excuse poor performance or inappropriate conduct, but it helps you understand what process is appropriate.
The process should follow the problem
Those answers should help determine what you are actually dealing with, and therefore what should happen next.
Sometimes the distinction will be straightforward. Sometimes performance, behaviour and workplace circumstances will overlap. That is where experienced judgement matters.
The objective is not to find a process that fits the manager’s first impression. It is to establish the facts, identify the real concern and respond in a way that is clear and fair to everyone involved.
How Strategic HR Australia can help
Managing performance and conduct well starts long before a warning or termination is considered.
Strategic HR Australia works with leaders to assess complex employee matters, clarify the appropriate process and build consistent performance and disciplinary practices across the workplace.
This can include performance management guidance, Performance Improvement Plans, disciplinary processes, manager support and independent workplace investigations where the circumstances require one.
Getting the process right from the beginning provides clearer expectations for employees, better decisions for managers and a more defensible approach if the matter later escalates.
If you’re dealing with a situation where the distinction between performance and conduct isn’t clear, contact us before committing to a formal process.
