As a business owner or manager it is up to you to set expectations before you can hold your employees accountable. Setting expectations upfront ensures that both your goals and those of your employees are defined, and outlines what happens if goals are not met.

A useful way to set expectations is to develop an employment agreement or contract. This must be signed by both you and your employee.

The purpose of an employment contract is to provide details on the following:

  • Job description — This may include standard work hours, wage rates and whether overtime will be paid.
  • Terms and conditions of employment — In this section, you may want to establish a probationary period. This period may be anywhere from 3 months to 1 year.
  • Employer's responsibilities and the worker's rights — As a small business owner, familiarize yourself with labour laws that exist in your province or territory.
  • Performance appraisals — Set up an appraisal schedule for your employees. Reviews may be more frequent for new hires. These could take place every 30 or 60 days, and then be reduced to 6-month or yearly reviews.
  • Reasons for termination — Clarify potential reasons for letting someone go, such as poor attendance or repeated tardiness without approval, poor quality work or even company cut-backs.

Measurable goals should be set and communicated to employees regularly.

When expectations are not met:

There may be times when employees may not operate effectively even though performance criteria have been clearly established. In these cases, you may consider an employee development plan that sets out goals and objectives and includes regular follow-up to evaluate progress. You may find that identifying the issue and providing your employees with additional training may be all they need to improve their performance.

If, even after training and corrective action, you still decide to let an employee go, ensure you’re minimizing your legal risks. Minimize these risks by having proper human resource documents and processes in place. Consult a legal professional for these matters.

Having a solid employment contract, performance appraisal process and corrective action plan in place can help you avoid having to let employees go and save you a lot of time and money by reducing turnover. If, however, you do have to let someone go, these processes will make your decision more clear to you and to the rest of your team.

Visit our Employees page for more on managing employees.