Poor Performance Counselling: A Practical guide for SMEs

I can’t work with this person anymore—they’re just not doing their job! Please get rid of the problem!”

Sound familiar?

As a business owner or manager, dealing with underperforming employees is never easy. But simply wanting to “get rid of the problem” isn’t the right approach. Instead, it’s your responsibility as a leader to manage performance issues in a way that is fair, reasonable, and in the best interest of your company and its people.

What is Poor Performance, Really?

Poor performance happens when an employee consistently fails to meet the expectations of their role. But before jumping to conclusions, it’s important to understand why someone is struggling.

Common causes of poor work performance:

• Lack of knowledge, skills or aptitude i.e. ability to attend to the details
• Not a good fit with the job or company- They might not be the right fit for the job or company culture.
• Lacks direction– Unclear expectations or insufficient guidance can lead to underperformance.
• No performance management system in place- If there’s no structured way to track and review performance, how can improvement happen?
• Lack of resources– Employees need the right tools and support to succeed.
• Inadequate equipment– Outdated or ineffective tools can hinder productivity.
• Changes in job or working environment – A shift in responsibilities or company structure may create confusion.
• Presenteeism– Just because someone is physically at work doesn’t mean they’re fully engaged.
• Company Culture -A toxic or unsupportive environment can lead to disengagement.
• Personality clashes – Conflict with colleagues or managers can impact performance.

So how do you manage poor performance?

Rather than treating poor performance as a problem to “get rid of,” think of it as an opportunity to understand and improve. The key is to follow a structured performance counselling process that helps both you and the employee identify the root cause and work towards a solution.

The poor performance counselling process to follow is a proactive one.

The Line manager is actively involved in exploring and understanding the causes of the employee’s failure to meet your required performance standards.

Both of you must actively seek ways to ensure that the required standards are met.

The number of counselling sessions you hold depends on your expectations and the job function.

The question to ask is “Is the process I am following REASONABLE and FAIR?

Step-by-Step Performance Counselling Guide

During the counselling session:

1. Clearly explain the issue – Explain what you are concerned about and WHY you are concerned about it.
2. Give the employee an opportunity to respond and explain why they are underperforming.
3. Explore solutions together –Ask the employee what solutions they think will bring the desired expected performance standards.
4. Agree on an action plan -Both of you should then agree on a solution to the problem and the steps you are going to take to resolve the problem.
5. Set fair expectations– If the employee does not agree you may take reasonable and fair steps to address the problem.
6. Allow time for improvement– It’s essential that you allow the employee a REASONABLE period within which to show improvement.
7. Schedule a follow-up meeting -If your employee has still not met the required performance standards the Supervisor must schedule a FOLLOW UP meeting to consider the next steps.

When is Dismissal the Right Decision?

If, despite multiple counselling sessions and fair opportunities, an employee still fails to meet performance standards, it may be time to consider a performance hearing or incapacity inquiry. This gives them a formal opportunity to present their case before any final decision is made.

Before Making a Dismissal Decision, Ask Yourself:

• Has the employee genuinely failed to meet the required performance standard?
• Were they aware of the expectations OR could reasonably be expected to have been aware of the required performance standard and given a fair opportunity to improve?
• Have you followed a fair process and documented the under-performance objectively?

If the answer is yes to all the above, and performance has not improved despite support, then dismissal could be a fair and necessary step.

Final thoughts: “You Can Lead a Horse to Water…”

Dealing with poor performance takes time, patience, and a structured approach. You can provide guidance, training, and support, but ultimately, the employee must take responsibility for their performance.

Ignoring the issue only makes it worse. Taking proactive steps—from counselling to corrective action—ensures that you are leading fairly and making decisions that protect both your business and your team.

 

Is the person an Independent contractor OR an Employee? How to tell the difference

A frequently asked question asked is “Is the applicant or person working for me an Independent contractor OR an Employee?” We see employers using Independent Contractor agreements to escape their legal obligations of offering employee leave benefits such as annual, sick, parental leave, and fringe benefits such as retirement savings plans, pension funds, wellness benefits and medical aid or bonuses and allowances.

Luckily we have a guideline (The Code of Good Practice: Who is an Employee? Published in GG 29445 of 1 December 2006) to help you in interpreting the labour law and understand the variety of employment relationships present in the labour market, atypical employment, and those disguised employment relationships.

Legally both the terms (independent contractor and employee) are mutually exclusive and are direct opposites.

How to Identify Independent Contractors

The person is presumed to be an employee if you can establish that ONE of the magnificent seven listed factors or conditions (S200A of the LRA) below is present in their relationship with a person who they work for or to whom they render services.

The Seven Factors:

1. The person is subject to the control/ direction of another person– are they required to obey lawful and reasonable orders, or instructions from managers, or supervisors?
2. The person’s working hours are subject to the control/ direction of another person– if the contract defines the total number of hours the person is required to work within a specified period, sufficient control may be present.
3. The person’s services form an integrated part of the employer’s operations.
4. The person has averaged 40 hours of work a month for the last three months.
5. The person relies on the remuneration from the person to whom they render their services.
6. The person uses the other person’s tools, equipment, technology, OR methodology.
7. The person does not work for anyone else.

Where the employee earns above the BCEA Threshold earnings amount the seven factors may be used as a guide for the purpose of determining whether a person is in an Employment relationship or is Self-employed.

Just because you label something a certain way doesn’t mean that’s what it is. This concept is known in law as the principle of “substance over form.” For example, even if you and someone else sign a contract agreeing that one of you is a unicorn, it doesn’t make it true. The courts will look at factors like control and dependency to determine what’s really happening. Regardless of what the contract says, they’ll conclude the person is a human being, not a unicorn—unless they have a horn, hooves, and a magical sparkle!

Still unsure if your applicant or person working for you is an independent contractor or an employee? Avoid costly legal mistakes and let us help you! Book a consultation today.

Disclaimer: We take great care to ensure the information on our website is accurate and up to date, readers are advised to always consult with an HR Consultant before acting on information. This information does not constitute legal advice.

Running a small or medium-sized business in South Africa is no easy task, where juggling compliance, employee satisfaction, and day-to-day operations can feel overwhelming. If you don’t have an in-house HR team, you’re not alone. Many SMEs face similar challenges but still manage to build thriving, compliant, and motivated workplaces.

Here are some key HR focus areas with practical solutions to address them effectively:

1. Navigating South African Labor Laws

South African labour laws, like the Basic Conditions of Employment Act, (BCEA), Labour Relations Act (LRA) and its Amendments and the new Employment Equity Act and its recent Amendments in 2025 can be tricky to navigate. Missing a step could result in costly penalties or even disputes with employees.

Start with getting a good understanding of the basics. Use free resources like the Department of Employment and Labour’s website or simple online guides. Templates for employment contracts, timesheets, and leave policies can also be lifesavers.

2. Managing Payroll and Benefits

Payroll errors can lead to disgruntled employees and compliance issues with tax authorities. Without in-house HR, you might feel lost when calculating UIF, PAYE, or other deductions.

Invest in an affordable payroll software tool designed for small businesses, such as Sage Payroll Software or PaySpace. Alternatively, consider outsourcing payroll management to a local payroll provider.

3. Recruiting the Right Talent Without Overspending

Recruitment can feel like searching for a needle in a haystack—especially when you’re on a tight budget. Leverage free or low-cost platforms like LinkedIn for high turnover roles, when it comes to Specialist, Senior or Executive positions we source quality talent at highly competitive rates.

4. Keeping Employees Happy and Motivated

High employee turnover is expensive, not to mention disruptive to your business. But keeping your team engaged doesn’t have to cost a fortune.

Small gestures go a long way. Recognize employees for their hard work, whether it’s through a thank-you email or an Employee of the Month program. Offer flexible work hours where possible, and take the time to listen to their feedback. We can’t overemphasize the importance of acknowledging your employees, and the positive impact this gesture will have on employee morale and engagement.

5. Avoiding Common HR Risks

Without proper policies and processes, small mistakes can spiral into big problems—think unresolved conflicts or poor performance management.

Set up the basics, like a written code of conduct, onboarding checklists, and a simple grievance procedure. We have developed an affordable HR /Employee Handbook to protect your business, available for download here.

6. Building a Strong Company Culture

Your company’s culture has a direct impact on employee satisfaction and retention. A positive culture can boost morale, attract talent, and increase productivity.

Define your company’s core values and ensure they’re reflected in everyday operations. Celebrate team achievements, encourage open communication, and foster an environment of trust and respect. Employees who feel valued and included are likelier to stay and contribute to your company’s success.

7. Upskilling Your Team Without Breaking the Bank

In a fast-changing world, continuous learning is key to staying competitive. But providing training can feel like an expensive luxury.

Look into free or low-cost training platforms such as Coursera, Udemy, or Google Skills for Africa. Additionally, explore SETA (Sector Education and Training Authority) funding opportunities for skills development programs relevant to your industry. We assist with preparing your Skills Development Plan and report to on your annual training to claim your mandatory and discretionary grants available from your sector SETA.

8. Supporting Employee Well-being

Mental health issues and burnout can reduce productivity and morale. Ignoring well-being is a costly mistake for any business.

Promote well-being initiatives, even if they’re small. For example, encourage regular breaks, offer access to free counselling services through NGOs, or start a wellness challenge. Creating a supportive environment goes a long way.

9. Infusing Purpose Into Work

More employees today want their jobs to mean something beyond just a salary. Purpose-driven workplaces are more engaging and productive.

Share your company’s mission and values with employees regularly. Get them involved in community projects or sustainability initiatives. When employees see how their work contributes to something bigger, their connection to your business deepens.

Where to Start?

Start by focusing on one or two areas that will have the biggest impact on your business. For example, set up a simple payroll system, and a handbook outlining various HR policies and processes defining HR touchpoints along the employee journey.

Small, consistent steps will make a big difference over time.

Remember, you don’t need an HR department to build a compliant, motivated, and happy workplace. With the right tools, resources, and mindset, you can handle these challenges head-on.

Need More Help?

For tailored HR solutions and support that suits your company’s unique requirements, reach out to Hands-on Human Resources. We specialize in helping SMEs navigate HR challenges without needing a full-time HR team.

Visit us at www.hohr.co.za to learn more about how we can support you.

Disclaimer: While we have mentioned certain tools and platforms as potential resources, Hands-on Human Resources is not affiliated with any of these service providers. Our recommendations are based purely on their suitability for SMEs and the value they may offer to business owners like you.

Despite re-designing the way we work and prioritising employee wellness in the daily management of employees, we have had to build a strong level of trust in accommodating remote working since the onset of the COVID 19 pandemic. If navigating the new “business un-usual” experience due to the pandemic and staying relevant with the latest news updates on the COVID 19 regulations has not proven challenging enough for business, the South African labour law amendments promulgated during 2020 have rendered policies and procedures outdated, posing risk to your business.

2021 will require organisations to prioritise policy review and formulation and we can support you with this process

We have highlighted a few labour law amendments which came into effect during 2020:

The Labour laws amendment Act, 2018, 1 April 2020 amendments came into operation to amend the Basic Conditions of Employment Act, 1997 these provide for parental, adoption and commissioning parental leave to employees; to amend the Unemployment Insurance Act, 2001, so as to provide for the right to claim parental and commissioning parental benefits from the Unemployment Insurance Fund. The National Minimum Wage Amendment Act 3 of 2020 came into effect in August 2020.

The Minister of employment and labour has determined that all employees earning in excess of R 211 596.30 per annum are excluded from specific sections of the Basic Conditions of Employment Act, 1997, effective 1 March 2021.

The Employment Equity Bill, 2020), seeks to amend the Employment Equity Act, 1998 (Act No. 55 of 1998) (‘‘the Act’’). We await the effective date.

Further provisions in the Protection of Personal Information Act (POPI) came into effect on 1 July 2020, payroll data, employee information, CVs, CCTV records, performance reviews and internal e-mail records fall within the scope of these POPIA requirements.

Companies need to mitigate these risks for what lies ahead in terms of labour law compliance. We assist small and medium size business to achieve this.

Avoid hefty fines and get in touch with us.

In the current South African economic climate we understand that the cost of employing a full-time HR expert does not make financial sense if your employee headcount doesn’t warrant it. As with most businesses,  SMEs are no different, we generally require new starters to hit the ground running. So then recruiting an employee who is the right fit with the right skill set is not negotiable right? Whereas Larger organizations have the luxury of possibly re-deploying their staff and/or investing in training to bring the new employee up to speed.

Assessing the employee during their probation period is critical for managing good and bad performance. Poor performance issues need to be addressed while they are hot, and documented clearly and follow-up in the application of the process is essential. We want you to stay focused on the operation and not keep you busy with HR matters,  these we can handle for you. We guide you through these processes and facilitate the assessment period confirming the permanent appointment of great talent.

We have seen that “Ignorance is not bliss” when you find yourself having to pay out an award at the CCMA to a non-performing employee.

It’s imperative that SMEs understand the implications of all aspects of labour laws applicable to their respective industries as legislation does not differentiate between sizes of organisations so it’s advisable to develop and implement a sound labour relations framework, which may prevent CCMA referrals. Investing in partnering with an HR expert to protect your company from any potential legal non-compliance is your financially viable solution.

With over twenty years of hands-on working experience practicing and consulting in Human Resources in both small and medium size companies and industries in South Africa has equipped us with mastered HR Skills which we transfer to your business. We serve as an impartial sounding board to business owners giving you a fresh perspective on internal matters, processes, communications and interpretation of labour laws within your business environment. We upskill your line managers with people management skills and empower you with best people practices.

Is this enough to prompt you to enquire about our affordable Virtual HR Consultant options?

How can we help?

#freelancehrexperts #hrconsultant #virtualhrsupport #ccma #humanresourcemanagement #humanresourceconsultant #sme #hrservices #labourlawcompliance

What role does workspace design play in culture creation and employee engagement you may ask? A Global study found that a strong correlation exists between high workplace satisfaction and high employee engagement, with employees who have greater control over their physical workplace – including access to private spaces – also reporting the highest engagement levels. The findings prove that employers could be missing a trick when it comes to planning their employee engagement strategies.

This is because, consistently, the most engaged workers were those who had more control over their work experience, including the ability to concentrate easily and work in teams without disruption.  Workers who can choose where they want to work in the office, based on the task at hand are much more engaged in the work they do.

Employee well-being and engagement feature on the top of our list of priorities at Hands-on Human Resources alongside compliance. Prior to the COVID-19 pandemic organizations were considering workspace restructuring and re-designing for various reasons such as business acquisitions,  updating furnishings, and ensuring their workplaces are compliant with statutory labour laws.

 

Since the COVID-19 pandemic most organizations, even those with traditional workplace cultures have directed employees to work remotely in an effort to keep employees healthy and slow the spread of the virus and some have implemented permanent WFH (working from home) policies and shaping productive and engaging workplace cultures.

Prior to the COVID-19 pandemic, these might have been some scenarios you were faced with to consider a change or improvement to your workspace layout and or office design:

• Re-structuring your organization after a merger or acquisition leaves you to get your head around HOW and WHERE your new employees are going to be allocated working space and at the same time ensure they are highly engaged;
• The current layout of workspaces is impractical and not proving the most productive space;
• Your boardroom is looking a little drab;
• Your reception is stuck in the ’80s;
• Strategizing what you can do to create space for mindfulness;
• Need to accommodate people with disabilities in your workplace;
• Need to address the ergonomic risks that may impair overall system performance and well-being in your workplace, and ensure your practices are aligned with the Ergonomics Regulations, 2019 published in the Occupational Health and Safety Act;
• You don’t have a private space where breastfeeding Moms can take their breastfeeding breaks to express breast milk, in compliance with the Code of Good Practice on the Protection of Employees during Pregnancy and after the Birth of a Child (which forms part of the Codes of the BCEA).

Practical, and aesthetically pleasing workspaces do have a positive impact on productivity levels, and employee engagement, and if you incorporate the health and safety compliance aspects surrounding workplace ergonomics you can’t go wrong.

It is impossible to predict the long-term implications that COVID has brought to the world of work, one outcome is that leaders will appreciate the value of allowing freedom of choice as to where employees operate from and adopt WFH on a permanent basis combined with some face-to-face interaction at a collaborative space to touch base with the team and fulfill our human need for socializing.

We think it’s a win-win scenario.

6 Tips for creating a WFH space adapted by Real Simple:

1. Pick the right spot in the home
2. Set up good lighting
3. Make it as ergonomically friendly as possible – Desk stands are great to help lead a healthy work lifestyle.
4. Working from the bed or couch is a non-negotiable!
5. Connect with a virtual background if your physical one is too distracting during virtual meetings
6. Decorate your space with things that light you up and calm you, we have added an aromatherapy diffuser, and plants to our desk space. In between Zoom calls, Spotify plays soft calming vibes keeping us focused.

What are your thoughts?

We would love to learn more about your employee engagement strategies, send us a mail.

Running a small or medium-sized enterprise (SME) in South Africa can be challenging, when it comes to complying with the country’s complex labour laws. From the Basic Conditions of Employment Act (BCEA) to the Labour Relations Act (LRA), the regulatory environment can be daunting for SMEs, if you lack the in-house resources to manage these requirements.

In this digital age, virtual HR support services have emerged as a lifeline for SMEs, offering you the flexibility and expertise you need to stay compliant while focusing on growth.

The key South African labour laws that SMEs need to be aware of, the risks of non-compliance, and how virtual HR support can be an essential part of your business strategy.

Understanding the Key South African Labour Laws

South African labour laws are designed to protect employees’ rights and ensure fair treatment of the workforce.

Some of the most critical regulations that every SME should be familiar with:

1. The Basic Conditions of Employment Act (BCEA) sets the minimum standards for employment in South Africa, including working hours, leave, and termination of employment. Non-compliance can lead to severe penalties and legal disputes.
2. Labour Relations Act (LRA), referred to as the LRA governs the relationship between employers and employees, focusing on collective bargaining, dispute resolution, and unfair dismissal. Misunderstanding this law can result in costly legal battles.
3. Employment Equity Act is aimed at promoting equal opportunity and fair treatment, this act requires businesses to implement affirmative action measures and report on their progress. SMEs need to be vigilant in ensuring their policies align with these requirements.
4. The Occupational Health and Safety Act mandates that employers provide a safe working environment for their employees. Failure to comply can lead to fines, workplace accidents, and damage to your business’s reputation.

The Importance of labour laws

For SMEs, the consequences of non-compliance with labour laws can be severe, you may face:

• Legal Penalties are enforced for Non-compliance such as fines, legal fees, Arbitration awards, and court orders which can lead to you having to close your doors.
• Reputational Damage caused by unfair labour practice disputes and negative publicity can harm an SME’s reputation, making it harder to attract Top Talent and customers.
• Disruption in your Operations as Labour disputes can lead to strikes, work stoppages, and a decrease in productivity, all of which can affect an SME’s ability to compete in the market.

Leveraging Virtual HR Support

Given the complexities of South African labour laws, many SMEs are finding great value in investing in virtual or remote HR support services. These services offer a cost-effective and efficient way to manage HR functions, ensuring compliance without the need for a full-time, in-house HR team.

Virtual HR support can assist SMEs with:

• Policy Development and Implementation: Creating and updating company policies that comply with South African labour laws.
• Employee Handbook and bespoke customisation protecting your business from any potential risks and serve as an invaluable tool in contributing towards building a great company culture.
• Employee Relations Management: Guiding you in handling disputes, disciplinary actions, and grievances in line with legal requirements.
• Training and Development: Offering training on labour laws and best practices to ensure that your management team is well-equipped to handle HR issues.
• Performance management: implementing continuous performance feedback– a People-focused, Ongoing, Holistic approach to managing performance.

Top HR Strategies for SMEs

To stay compliant and avoid the pitfalls of non-compliance, SMEs should consider the following HR strategies:

1. Regular Policy Reviews: Ensure that your company policies are up-to-date and reflect the latest labour laws. Virtual HR consultants can help review and update these policies regularly.
2. Sign up for HR Mentoring to stay on top of the ever-changing labour laws and best practices in managing your people.
3. Proactive Conflict Resolution: Address employee grievances and disputes early, before they escalate into larger issues. Virtual HR support can offer impartial advice and mediation services.

Navigating South African labour laws is no small task, by leveraging virtual HR support services, you can ensure you remain compliant while focusing on what you do best—growing your business.

Virtual HR support offers the flexibility, expertise, and cost-efficiency that SMEs need to thrive in today’s competitive market.

Don’t let the complexities of labour laws hold your business back. Invest in virtual HR support and safeguard your business against non-compliance risks.

If you’re an SME looking for reliable HR support with seasoned HR Professionals tailored to South African labour laws, we’re here to help.

Contact us today to learn more about our virtual HR services and how we can help your business stay compliant and thrive.