Staff performance

In every organisation, staff performance varies—and occasionally, it falters. How leadership responds to underperformance, however, defines not just outcomes for individuals, but also the organisation’s culture, reputation, and sustainability. In some workplaces, underperformance is met not with support or accountability, but with a restructuring or redundancy process that quietly removes the problem. While it may seem like a clean solution, replacing performance management with redundancy is a costly, avoidant, and often ethically questionable path.

Let’s explore why.

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1. Redundancy Undermines Trust in Leadership

When redundancies are used as a proxy for managing underperformance, staff quickly notice—and morale suffers. Colleagues see roles eliminated not because they’re no longer needed, but because someone wasn’t performing and leadership chose not to address it head-on. This damages trust. Staff begin to question whether their jobs are safe, whether feedback is honest, and whether transparency really exists. Trust, once eroded, is difficult to rebuild.

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2. It Sends the Wrong Cultural Message

Avoiding direct conversations about performance tells the team: we don’t do accountability here. Instead of building a culture of continuous improvement, coaching, and professional growth, it builds one of silence, avoidance, and fear. Team members are less likely to take risks, ask for feedback, or raise concerns. High performers may disengage if they see poor performance tolerated—until it’s suddenly removed with no warning.

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3. It Fails the Underperforming Employee

Redundancy deprives the employee of the opportunity to improve. With a well-structured performance management plan, they could have gained clarity, coaching, and a chance to meet expectations. Many people don’t realise they’re underperforming until they’re told clearly and given support. Redundancy robs them of that chance—and robs leadership of the opportunity to retain a potentially valuable team member.

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4. It Can Be Legally and Financially Risky

Redundancy laws (especially in Australia) are clear: a role must be genuinely no longer required. Using redundancy to avoid performance management exposes an organisation to legal challenges, reputational damage, and financial penalties. It’s a short-term fix that can result in long-term cost. Performance management, on the other hand, provides documentation, fairness, and procedural rigor.

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5. It Avoids Building Leadership Capability

Managing underperformance is difficult—but it’s part of the job of being a leader. When leaders shortcut the process through restructures, they miss opportunities to build essential skills: coaching, giving feedback, resolving conflict, and building high-performing teams. Avoidance now creates leadership gaps later.

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6. It Undermines Strategic Workforce Planning

Redundancies that are performance-driven rather than role-driven can distort strategic workforce planning. Roles are lost not because they’re unnecessary but because someone struggled in the role. This can leave gaps in critical functions, misaligned structures, and unnecessary recruitment costs down the line.

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What Should Leadership Do Instead?

• Set clear expectations early and revisit them regularly.
• Provide timely feedback, both affirming and constructive.
• Create performance improvement plans that are supportive, realistic, and time-bound.
• Train managers on how to have courageous conversations.
• Recognise and reward improvement and effort.

When a role is truly no longer needed, redundancy is appropriate. But when a person is underperforming, the right course is not removal—it’s responsible, fair, and transparent performance management.

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Leadership isn’t just about results—it’s about how those results are achieved. By confronting underperformance directly and fairly, leaders not only strengthen individuals but build a resilient, ethical, and high-performing workplace. Redundancy is a tool for organisational change—not a substitute for responsibility.