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What’s the Difference Between Performance Management and Disciplinary Action?

Published June 10, 2021 (last updated on February 28, 2024) | Adam Wyatt - Content Writer


Many employers can find the processes of performance management and disciplinary action challenging to follow. Before either process even begins, it can be hard to distinguish between underperformance and misconduct. If you want to reach a satisfying outcome, you’ll need to pick the right process for the problem you’re facing.

If you’re required to take action with an employee, it helps to have the facts at your fingertips. This article breaks down the key differences between performance management and disciplinary action, giving you the confidence that you’re using these two important processes appropriately.  

What is Disciplinary Action?

If an employee is behaving improperly in the workplace, an employer may need to escalate their concerns regarding the employee’s conduct by means of a formal disciplinary process.

Employers should implement policies outlining the code of conduct so all employees know what constitutes acceptable behaviour. These policies should be made available to all employees and the employer should be consistent in enforcing them.

Disciplinary action is usually taken to address misconduct, which is defined as behaviour that is contrary to the terms of an employment contract or breaches a company’s policies and procedures.

What Are Some Examples of Misconduct?

Misconduct is behaviour that is inconsistent with employee obligations or duties, as outlined by company policies.

Examples include:

  • Unauthorised absences (including ‘sickies’)

  • Repeated lateness

  • Bad language

  • Poor presentation

  • Refusing to follow directives

  • Misuse of company equipment

Serious Misconduct

Gross or serious misconduct is defined as wilful and deliberate misconduct that is inconsistent with the continuation of an employment contract. Serious misconduct can pose risks to the reputation, viability or profitability of a business, or even the health and safety of another person. Examples includes theft, fraud, harassment and assault.

Provided a fair process is followed, serious misconduct may give an employer the grounds for instant or summary dismissal, which means the employee is not provided with notice, or payment of notice in lieu.

Appropriate Standards of Behaviour

It should be noted that not all misconduct is clear and obvious. For example, getting into a fight with a colleague is clearly inappropriate behaviour in any workplace. However, expected behaviour when using company equipment may vary from business to business.

To remove any uncertainties, it’s crucial to ensure that you’ve implemented and consistently applied a thorough code of conduct. This will help you validate your position if an employee disputes an allegation of misconduct.

Are your disciplinary processes fair and effective?

This FREE Understanding Disciplinary Action Guide can help you respond to misconduct with processes that are fair and effective.


What is Performance Management?

Performance management is a process used to address underperforming staff. Underperformance occurs when an employee is not meeting the essential requirements of their role. If an employee is performing poorly (for example, failing to hit Key Performance Indicators or fulfil the remit of their role), an employer may consider entering the employee into a performance management process.  

As part of a fair process, the employer should identify the issue, inform the employee and provide further training where appropriate. The employer should put a plan of action in place to address the performance issues and to give the employee an opportunity to improve.

Performance management should only address the requirements of the role, not behaviour. Remember that misconduct is not the same thing as poor performance.

While part of the performance management process is similar to disciplinary procedures, it is important for employers not to conflate the two concepts.

Struggling with employee performance?

Improve your management skills, understand your rights and enhance your processes with this FREE Ultimate Guide to Performance Management. 


What’s the Difference?

A performance management process may result in further training or a performance management plan (PMP), or performance improvement plan (PIP), both of which give an opportunity for the employee to improve their performance.

A disciplinary procedure may not result in a behavioral management plan, since it is not an employer’s responsibility to ensure their employees act appropriately in the workplace. An employer’s duty is only to remind them of their expected behaviour and discipline them in an appropriate way if they fail to adhere to it.

Over 30,000 Australian businesses trust Employsure to support them with their employment relations obligations. Call our FREE Advice Line on 1300 651 415 to get all your difficult questions about misconduct and underperformance answered

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