#CostaRica 🇨🇷 #BDS_Article: Poor Work Performance: How to Address It Correctly

Companies frequently encounter situations where an employee fails to meet the expected performance level. While fluctuations in productivity are normal, when poor performance becomes consistent and affects business operations, it is essential to address the issue in a structured manner.

Determining whether there is a genuine performance issue requires analyzing various factors that may be influencing the employee's performance, such as unclear job expectations, workload distribution issues, lack of motivation, or even personal problems. However, if it is concluded that this poor performance cannot be justified by any reasonable cause, it is crucial to implement a process that enables both the employee's improvement and the protection of the company.

One of the key elements in this process is the implementation of a performance improvement plan, which not only provides the employee with a real opportunity to recover their performance level but also serves as evidence of the employer's good faith. A well-structured plan ensures that decisions are made based on objective and proportional criteria, preventing arbitrary actions or excessive penalties.

To establish whether poor performance truly exists, it is fundamental to have clear evidence demonstrating that other employees in similar conditions can meet the expected performance levels. Once this basis for comparison is set, it is important to identify the factors affecting the employee. The performance improvement plan should include progressive goals and periodic evaluations to monitor the employee's progress. The objective is not to demand immediate change but to provide structured support to help improve performance. Throughout this process, proper documentation is essential, as tracking the actions adopted will be crucial if disciplinary measures need to be applied.

In this context, progressive discipline plays a fundamental role. Before considering dismissal without employer’s liability, the company must implement a performance improvement process and provide the employee with an opportunity to adjust their performance, penalizing willful non-compliance. Costa Rican labor law and jurisprudence allow for dismissal without employer’s liability due to poor performance when it is repeated and evident. Specifically, Articles 71(b) and 81(h) and (l) of the Labor Code establish that employees must perform their duties with "appropriate depth, care, and diligence," and that the employer may terminate the employment relationship if there is a clear, repeated, and serious breach of these obligations.

Furthermore, the Labor Chamber of the Judiciary has ratified that for a dismissal based on poor performance to be valid, it must be proved that the decline in performance is voluntary. In other words, it is not sufficient for an employee to fail to meet their objectives; there must be evidence that they were previously capable of achieving the expected levels and that their performance has declined without a justified cause. This criterion is key to distinguishing between cases where an employee lacks the actual capacity to fulfill their duties and those in which the employee, despite being capable, is unwilling to improve.

Effectively managing poor performance not only protects the company's interests but also ensures that the employee undergoes a fair and structured process to regain productivity. Well-designed improvement plans, objective evaluations, and clear documentation are the best ways to address such cases, ensuring that any disciplinary measures taken are proportional and compliant with the legal framework.

Given that each case is unique and that mishandling poor performance can create legal risks for the company, it is advisable to seek legal counsel from labor law professionals. Having proper legal support will ensure that decisions comply with applicable regulations and that the process is conducted fairly and effectively.

Melissa Sandoval Hidalgo
Attorney, BDS Asesores

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