KPI’s and Metrics how are they monitored
Being dismissed for not meeting Key Performance Indicators, or KPIs, is often a risk employees can face. After all, we now live in a world where many employees are judged by their performance against certain metrics. And these metrics are closely monitored and scrutinized by often overzealous managers and bosses. Its all about the numbers, the return on investment, particularly when the work is outsourced. Positive customer experience comes in a distant second, dismissed for providing good customer service is a wake reminder for employers to do better. and you as an employee are not unfairly dismissed in these circumstances.
Well-formulated and fair KPIs are designed to ensure an employee meets ideal performance standards. However for some employees KPIs can seem arbitrary, unattainable and provide an incentive to ignore other aspects of their role. For instance, employees who work in customer-facing roles are often given aggressive KPIs that prioritise other outcomes over providing good customer service.
We generally see this with customer service representatives in call centers, who are often placed under pressure to minimize time spent speaking to customers. Many of these representatives may want to genuinely help customers, but their KPIs make it very difficult to do so. This leads to increasingly toxic workplaces and stress of individual employees.
Mechanic faces dismissal for failing to meet KPIs
Even roadside service mechanics face this dilemma between providing genuine help to customers and meeting their KPIs. In 2021, a motor services company dismissed roadside mechanic Yen Yap for failing to meet his KPIs. Mr Yap worked for Club Assist, which provides roadside assistance service to the NRMA and other motoring companies across Australia. The 61-year-old mechanic, who had worked for Club Assist since 2017, failed to meet several demanding KPIs. Mr Yap had failed to:
- Sell batteries to customers on at least 24 per cent of jobs he attended
- Reduce the time he spent on each job, having spent longer than the average working time of 17 minutes
- Ensure that he only replaced 3.9 per cent of batteries under warranty against the number of batteries he sold. In August 2021, for instance, Mr Yap had replaced 20.6 per cent of batteries under warranty. Which Club Assist considered “exceptionally high.”
These KPIs clearly prioritized profit over providing comprehensive and genuine help to customers. Battery sales are of particular importance to the NRMA, as battery sales make up a large portion of their business. And the KPI to minimize the replacement of batteries under warranty is to ensure Club Assist employees are not giving away free batteries.
The mechanic was warned of poor performance prior to dismissal
More than a year prior to his dismissal, Mr Yap had been placed on a performance improvement plan for failing to meet his KPIs. When this performance improvement plan ended, he received a written warning. This stated that due to his “continued failure to meet expectations… his ongoing employment was at risk.”
Almost a year after that warning, Mr Yap was issued a show cause letter. This stated that while he had made some improvements with his three KPIs, he was still not meeting them. Months later, Mr Yap was dismissed. He subsequently made an unfair dismissal claim with the Fair Work Commission (FWC).
Mechanic has his unfair dismissal case heard at the FWC
At Mr Yap’s unfair dismissal hearing – Yen Yap v Club Assist Pty Ltd  – Club Assist argued that his KPIs were in line with industry standards. The company also said that “some variation is inevitable and expected” with respect to meeting KPIs. However, Mr Yap “fell well short” of his KPIs for “a prolonged period” of almost 22 months.
Club Assist asserted that Mr Yap’s KPIs were outlined in the position description for his role as a Technical Roadside Responder (TRR). However, FWC Deputy President Boyce found that there was “no evidence” that this position description was ever provided to Mr Yap.
“There cannot be any express terms of the employment contract between Mr Yap and Club Assist requiring him to adhere to the KPIs given that the position description for a TRR was never provided to him,” said Deputy President Boyce.
KPIs required mechanic to “prove innocence” or face dismissal
Deputy President Boyce accepted that Club Assist “was generally able to devise KPIs” to achieve its desired outcomes. He also accepted that Mr Yap’s KPIs “might be an acceptable tool to measure general performance comparatively amongst roadside patrol officers.” However, in addition to Mr Yap’s KPIs not having been “explained in writing,” Deputy President Boyce found that the facts to support Mr Yap’s performance “are unproven.” He also criticized the entire premise of Mr Yap’s KPIs.
“… the manner in which the KPIs have been applied to Mr Yap assumes that where he fails to meet a KPI he is guilty of certain performance failings or conduct, and is thereafter required to prove his innocence. The approach is not only unsatisfactory, but unacceptable,”Deputy President Boyce.”
The mechanic was “manifestly denied” procedural fairness
Deputy President Boyce also found that Mr Yap had been “manifestly denied” procedural fairness. He said that the show cause letter Mr Yap received did not communicate concerns about his “assertedly poor attitude.” It also did not communicate concerns about his lack of battery sales and his high rate of replacing batteries under warranty.
“Mr Yap was, therefore, not notified that his employment was in jeopardy due to any of these matters before any decision to dismiss was made. There was no reasonable or sensible reason why this could not occur,” said Deputy Commissioner Boyce.
Deputy President Boyce asserted that had Mr Yap “could have sought to allay concerns about his attitude” had he been informed about these concerns. Ultimately, Deputy President Boyce found that Mr Yap’s dismissal was unfair. Finding that a “sufficient level of trust and confidence can be restored between the parties,” he ordered for Mr Yap to be reinstated in his role.
Can an employee be fairly dismissed for failing to meet KPIs?
KPIs are a widely accepted way to measure employee performance. Generally, if KPIs are not met, an employer can use this to justify an employee’s dismissal. However, the aforementioned case teaches us that employers must meet certain obligations when assigning KPIs. There were a number of reasons why Mr Yap’s failure to meet his KPIs was an invalid reason for dismissal. One that Deputy President Boyce highlighted was that Mr Yap had not been provided any documentation that outlined the specifics around his KPIs.
“… there is no document that sets out or explains each of the KPIs, how each KPI has been derived, what definitions are associated with the KPIs, how the KPIs are assessed, what variables are accepted as impacting upon KPIs, or how such variables are dealt with in terms ultimate KPI outcomes,”Deputy President Boyce.
This demonstrates how important it is for employers to provide you with the detail around your KPIs. Not some vague statement of “you have to do better”, “try harder”.
Employers have obligations when setting KPIs
The aforementioned case also illustrates that it’s critical for employers to clearly communicate their concerns when you fail to meet KPIs. Also, that you are given an opportunity to address these concerns. The unfair dismissal case also highlights the importance for employers to provide you with reasonable KPIs.
In the aforementioned case, Deputy President Boyce found that many of the KPIs set for Mr Yap were not reasonable given the nature of his role. He found that Mr Yap’s KPIs prevented him from delivering “appropriate and professional service to [NRMA] customers.” Deputy President Boyce also said that if Mr Yap’s job was complex or difficult, that he “should necessarily spend more time on them.”
“Average working time and time on job measures were a perverse incentive to not complete work properly or professionally,” said Deputy President Boyce.
You have workplace rights
If you have been issued KPIs that seem too ambitious or perhaps arbitrary, you have the right to ask for further information about them from your employer. For instance, about how they were derived and how they will be assessed. Your entitled to have them set out in writing to you.
You also have the right to question the validity of your KPIs and request their revaluation. This includes if your KPIs fail to take into account other expectations of your role. Like for instance, providing good customer service. We observed this during the pandemic lockdowns and employee increasing sick leave, where employers still demanded the same performance and results.
The Fair Work Act 2009 provides all workers with the right to make a complaint or inquiry in relation to their employment. That is, without being dismissed or treated unfairly by their employer. If you are, you could be eligible to make an adverse action claim to seek redress through the FWC.
Conclusion to Dismissed for providing good customer service
Have you been unfairly dismissed for missing your KPIs?
This article delves into the intricacies of unfair dismissal from an employee’s perspective, shedding light on the challenges, potential benefits, and the decision-making process involved. When an employee is unfairly dismissed, the emotional impact can be significant. Feelings of betrayal, anger, and confusion often arise, affecting both personal and professional well-being. Additionally, the sudden loss of income and financial stability can create hardships, making it necessary to evaluate the potential benefits of pursuing legal action.
Seeking justice for unfair dismissal typically involves initiating legal proceedings. This can be a complex and time-consuming process, involving consultations with employment lawyers, gathering evidence, and attending hearings or mediation sessions. It is essential for employees to weigh the potential outcomes against the emotional and financial costs involved.
If you have been treated unfairly or dismissed for failing to meet your KPIs, A Whole New Approach can help. We are Australia’s leading workplace advisors and commentators. In the last two decades, we have assisted over 16,000 employees to make an unfair dismissal claim. Our team can help you understand if you can purse redress through the Fair work. We provide you invaluable guidance throughout the process. All workplace investigations, casual employees issues, workplace harassment.
Call us today on 1800 333 666 for a free, confidential discussion about how we can help you seek redress.