Managing employees is not just about hiring the right people. It’s about knowing how to respond when things are not going well. One of the most common mistakes small businesses and nonprofits make is treating performance problems and behaviour problems the same way.
They are not the same. And handling them incorrectly can create confusion, frustration, and legal risk.
This article explains the difference between performance management and progressive discipline, when to use each one, and how to apply them properly.
Why These Two Processes Are Often Confused
When an employee is struggling, the instinct is often to warn them or start documenting everything “just in case.” Managers may feel pressure to act quickly or worry that being supportive will look like they are being too lenient.
The problem is that performance issues and behaviour issues require different responses. Mixing the two can undermine trust and weaken your position if the situation escalates.
Understanding Performance Management
Performance management is about support and clarity. It applies when an employee is trying but is not meeting expectations. This could be because they lack experience, are unclear about priorities, or need additional training or feedback.
A good performance management process answers three basic questions for the employee. 1) What am I expected to do? 2) How will success be measured? And 3) What support will I receive to get there?
Performance management should start early. Waiting until a formal review or until frustration builds rarely leads to improvement.
What Performance Management Is Not
Performance management is not a warning and it is not discipline. It should not feel like punishment or a setup for termination. When handled properly, it gives the employee a real opportunity to improve and shows that the employer acted fairly.
From a legal perspective, performance management must be clear, reasonable, and well documented. Goals should be achievable, timelines should make sense, and the employee should be given an opportunity to respond and ask questions.
When a Performance Improvement Plan Makes Sense
If informal coaching does not lead to improvement, a Performance Improvement Plan (PIP) may be appropriate. A PIP simply formalizes expectations and timelines. It puts everyone on the same page and reduces misunderstandings.
A PIP does not mean discipline has started. It is still part of performance management. However, if improvement does not happen, the documentation created through the PIP becomes important.
When Performance Management Is the Wrong Tool
Performance management should not be used when the issue is behaviour. If an employee is repeatedly late without cause, disrespectful, or is ignoring workplace rules, this is no longer about ability or clarity. It is about conduct.
Trying to manage behaviour through performance management sends mixed messages and weakens accountability.
Understanding Progressive Discipline
Progressive discipline is used when an employee’s behaviour does not meet workplace standards. It is disciplinary in nature and involves consequences from the start.
The purpose of progressive discipline is not to punish for the sake of punishment. It is to clearly communicate that certain behaviour is unacceptable and must change.
Progressive discipline typically escalates if the behaviour continues. While not every situation requires the same steps, employees must understand that continued misconduct will lead to more serious consequences.
Behaviour Issues That May Require Discipline
Behaviour issues often include repeated lateness (culpable), failure to follow instructions, disrespectful communication, or breaches of workplace policies. These issues are different from performance gaps because the employee usually knows what is expected but chooses not to meet those expectations.
The Importance of Documentation
Whether you are managing performance or addressing behaviour, documentation matters. Courts and regulators look at what the employer actually communicated, not what they intended.
Good documentation is factual, consistent, and focused on expectations and outcomes. It should reflect fairness and give the employee a clear understanding of what needs to change.
Skipping Steps and Serious Misconduct
In some cases, employers do not need to follow a gradual process. Serious misconduct such as violence, harassment, or theft may justify immediate and severe discipline.
These situations should always be handled carefully, as the consequences are significant.
The Schick v. University of New Brunswick, 2025 NBKB 207 (CanLII) decision reinforces that progressive discipline remains a cornerstone of just-cause terminations
The Most Common Employer Mistake
The biggest mistake small businesses and nonprofits make is using discipline when the issue is performance, or using performance management when the issue is behaviour.
This blurring of lines creates confusion for employees and weakens the employer’s position if the relationship ends.
Final Thoughts
When employees struggle, the goal should always be clarity first. Use performance management to support employees who are trying but falling short. Use progressive discipline when behaviour crosses the line.
Choosing the right approach protects your organization and gives employees a fair chance to succeed.
Disclaimer
This article is for general informational purposes only and does not constitute legal advice. Employment laws vary by province and territory, and each situation is unique. Employers should seek professional advice before taking action related to performance management or discipline.
