A new hire who fails to meet their targets, a loyal employee struggling with digital tools, or someone who has visibly lost motivation and is making more and more mistakes. For many employers, these are familiar situations that create tension in the workplace. This is not necessarily about unwillingness or a personal attack, but about underperformance: no longer fulfilling the role as expected.
A shared problem
The key principle is that underperformance concerns the work, not the person. It is therefore a shared problem that both employer and employee need to address together. To do so, both parties must agree on what “good performance” actually means. The manager must clarify this, supported by concrete examples.
By holding regular conversations and documenting agreements, you not only create clarity but also build a record. This record can later become crucial if the situation eventually leads to a dismissal procedure.
Improvement before termination
Before dismissal can even be considered, the employer must demonstrate that sufficient effort was made to help the employee improve. That means:
- Offering additional training, for example through courses or coaching, especially if evolving roles require new knowledge or skills.
- Starting a performance improvement plan (PIP), based on SMART goals (Specific, Measurable, Acceptable, Realistic, and Time-bound). This should include interim evaluations, guidance, and written documentation.
- Exploring other suitable roles if improvement is not achieved. An employer is legally obliged to consider redeployment opportunities, possibly at a different level or within another branch of the organization.
Only once these steps have been thoroughly pursued can dismissal for underperformance be legally justified.
Legal framework and pitfalls
According to Dutch law (Article 7:669 BW), underperformance is considered a valid ground for termination of employment. However, courts apply strict standards when assessing such cases.
Key points to remember:
- Salary cannot be reduced in cases of underperformance, unless deliberate underperformance is proven something courts are extremely reluctant to accept.
- Timely notification is essential. An employee must clearly understand that improvement is required and be given sufficient time and support.
- A transition allowance is almost always owed in the case of dismissal due to underperformance, unless there is evidence of serious misconduct by the employee.
Conclusion
Underperformance is a sensitive and often lengthy process, but it also presents an opportunity to work together with the employee on improvement. With clear communication, documented agreements, and adequate support, many situations can be turned around positively. If improvement fails to materialize, a carefully built record allows the employer, with respect for the employee, to proceed toward ending the employment relationship.
