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Performance Management: What is Unreasonable?

Published November 10, 2020 (last updated February 18, 2021) -
manager running performance management meeting and not bullying

Underperforming employees can be a difficult task for managers and employers to handle, especially when deciding whether the employee should be placed on a performance improvement plan.

Adding to the complex decision is the ease at which a manager’s performance management actions could cross line to bullying. The definition of workplace bullying in the Fair Work Act excludes “reasonable management action conducted in a reasonable manner”.

The question then, is what the difference is between reasonable management and bullying; where does one begin and the other end? The following case studies can help illustrate the differences between bullying and unreasonable behaviour and unreasonable management actions.

Case 1 – Internal Review Uncovers Toxic Work Culture

A company in the aerospace industry released a review into its internal culture after allegations of a toxic workplace culture. The review, conducted by a former Sex Discrimination Commissioner, found an extensive internal culture where bullying “emerged as a significant and frequent theme in the focus groups, interviews, written submissions and the survey”.

According to the review, 50% of all employees responding to the survey experienced bullying by a work colleague or manager.

The following are responses from interviewees regarding times they were bullied that illuminate instances of unreasonable performance management.

  • Intimidating, passive-aggressive and bullying behaviour at the workstation is not uncommon. I have experienced scenarios during operational duty in the last five years where colleagues have directly harassed and/or bullied me or become aggressive in relation to operational decisions that I have made.
  • My bullying occurred from my direct line manager from his personal phone to my personal phone, so it was not on a recorded line. And face to face with the threat of dismissal if I did not do as he said. This despite having followed all appropriate procedures in the books. It was his way or the highway
  • [Managers should] stop pushing people past their limits and start listening to their employees. I feel as [if] I am just a number, not an asset. The sad thing is that I have been told I’m just a number.

You can find the report here. As of October 2020, the company has implemented, or is on track to implement, all of the recommendations of the report. Four managers have been sacked from the company following the internal review, with around 50 code of conduct investigations still outstanding.

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Case 2 – Fair and Reasonable PIP Saves the Day

An engineer previously employed by an energy company since 2006. He had received “distinctly positive performance reviews” throughout his employment and had a reputation as a hard and capable worker.

However, in December 2016, the employee’s supervisor became concerned about his management of engineering issues at the plant he was responsible for, his failure to hit deadlines, his ability to manage budgets, and his inability to adequately manage his direct reports. After a number of informal discussions took place, the employee was placed on a performance improvement plan (PIP). He was later placed on a revised PIP after his performances didn’t improve.

Claiming placing him on PIPs were not a reasonable management action carried out in a reasonable way, the employee made a ‘stop-bullying’ application against his employer and supervisor. 

Finding that the employee was not bullied and rejecting his application, the Commissioner overseeing the case at the Fair Work Commission held that:

“It was reasonable for [the supervisor] and the company expect [the employee] to demonstrate leadership in his role as an Asset Engineer by taking responsibility for the timely completion of work in connection with the assets assigned to [him], including by expecting and requiring [him] to influence and, where necessary, place pressure on others to complete work in the time required.

“[The supervisor] complied with AGL policy in providing [the employee] with informal coaching and an opportunity to improve before placing him on the PIP and thereafter, provided him with a range of measures of support in an attempt to assist him to improve his performance.”

The Commissioner focused on the steps the employer and supervisor took during the performance management process. For example:

  • The supervisor had the PIP reviewed by his superior, who deemed it as reasonable and achievable
  • The PIP was amended following feedback from the employee regarding his actual and perceived duties
  • During the process, the employee was allowed an extended period of leave upon request

Case 3 – Right Thing, Wrong Time

Every week, the employee attended a strategy and planning meeting with her colleagues and her manager. At one meeting, she was criticised for poor performance.

At one meeting, she was criticised for poor performance. Alleging injury after being “picked on and singled out” in front of her fellow employees, the employee applied for workers’ compensation due to mental illness caused by the incident. According to case documents, this claim was ultimately denied on the grounds that her condition was a result of reasonable administrative action taken in a reasonable manner.

The employee’s claim, which reached the Federal Court, was upheld. The Court held that as the meeting was not arranged for the purposes of performance management, the behaviour of the manager was not reasonable in the circumstances – in other words, the Court considered the action as unreasonable, and therefore awarded the employee worker’s compensation.

Key Takeaways

The difference between bullying and reasonable management action can swing from flagrant to minor technicalities.

In order to better ensure that performance management does not fall into bullying behaviour, we recommend employers consider the following.

  • Document and keep clear records at every step
  • Be reasonable and respectful at every step of the process
  • Effectively communicate unsatisfactory performance to employees
  • If applicable, upskill managers and team leaders in how to have these discussions
  • Identify the performance standards required of employees and provide feedback on a regular basis
  • If implementing a PIP, clearly identify the standards that have not been met
  • Consult with employees when putting in place a PIP and regularly throughout the PIP. Any reasonable feedback should be considered/added to the PIP
  • Performance management processes must have an evident and intelligible justification
  • Follow your own policies during performance management and if possible ensure those policies are flexible and workable for the organisation
  • If an employee alleges they are being bullied, those allegations should be taken seriously and be considered. Follow any policies in place to look into the alleged claim and document any findings

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About Employsure

Employsure is one of Australia’s largest workplace relations advisers to small- and medium-businesses, with over 25,000 clients. We take the complexity out of workplace legislation to help small business employers protect their business and their people.

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