Probationary Period

As a business owner or human resources manager, you may come across probationary periods in your employment practices. A probationary period is a set timeframe at the start of employment during which a new employee's performance and suitability for the role are evaluated. Implementing a probationary period can help identify potential issues early, ensuring that the new hire meets the company's standards and expectations.

For example, consider a company that hires a new sales representative and sets a three-month probationary period. During this time, the manager closely monitors the employee's sales performance, customer interactions, and adherence to company policies. If the employee meets or exceeds expectations, their position becomes permanent. However, if they consistently underperform or violate company policies, the employer may decide to terminate the employment at the end of the probationary period, minimizing potential long-term issues.

How a Probation Period Works

A probationary period is an initial phase in a new role, lasting from a few days to several months, during which the employer evaluates the new hire's suitability for the position and the organization. The length of probationary periods varies widely depending on the organization and jurisdiction, typically ranging from 30 days to several months. 

During probation, certain contractual obligations may be modified; for instance, the employer might have the flexibility to terminate employment with shorter notice.

Employers may implement a probationary period in the following situations:

• When hiring a new employee
• Upon an employee's promotion or role change within the company
• If there are significant concerns regarding an employee's performance

Completing the probationary period usually leads to regular employment or results in a raise or promotion. On the other hand, if an employee's performance or fit is deemed unsatisfactory during this time, the employer may terminate the employment relationship more easily than after the probationary period has ended. 

What Happens During A Probationary Period?

During a probationary period, several key activities typically occur:

• Training and Supervision: The employee receives training and additional supervision to understand their role and responsibilities effectively.
• Performance Evaluation: The employer assesses the employee's skills, performance, and overall fit within the company.
• Feedback Sessions: Regular meetings are held where the manager provides feedback and both parties identify areas for improvement.
• Goal Setting: Clear, achievable goals are established to guide the employee's progress during the probationary period.
• Cultural Integration: The employee is introduced to the company's culture, values, and team dynamics to foster a sense of belonging.
• Resource Provision: The employer ensures the employee has access to necessary tools, systems, and information to perform their duties effectively.
• Policy Orientation: The employee is briefed on company policies, procedures, and expectations to ensure HR compliance and understanding.
• Mentorship Assignment: A mentor or buddy may be assigned to support the employee's integration and address any questions or challenges.

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How Long Does a Probationary Period Typically Last?

The length of a probationary period for new hires varies depending on factors such as industry, role, and country-specific regulations. Generally, these periods range from 30 days to several months. For example, in the United Kingdom, it's typical for probationary periods to last between three to six months. Some organizations may opt for longer durations, extending up to a year. Part-time and contract employees often experience shorter probationary periods. 

The specific terms and conditions of probationary periods can vary based on company policies, local labor laws, and collective bargaining agreements. 

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Why is it Important for Companies to Utilize Probationary Periods?

So, why do companies place new hires on probationary periods? Well, probation for employees  is a great time for the employer and the employees to determine whether they are a good fit.

The top reasons why companies utilize probationary periods include:

• Ensuring suitability for the role:  A probation period allows the company to assess the candidate's skills and attitude in a real work environment to determine their suitability for the role.

• Managing expectations: Performance expectations are set to determine whether the new employee meets the required standards.

• Cultural fit: This helps test whether the employee’s work and life values align with the company's work culture, values, and norms.

• Training and guidance: A probation period is a great time to train, develop, and enhance the new hire’s skills to align with the company's expectations.

• Reducing hiring risks: Probationary periods help minimize the long-term risks, costs, and resources associated with hiring the wrong candidate.

• Reduced employee turnover: Placing new hires on probation helps lower employee turnover rates, work disruptions, and recruitment costs.

• Evaluating continued employment: Review meetings are held to assess the new hire's chance of continued employment depending on their performance.

• Legal protection: Companies document the employee's performance during the probation period. That can be helpful in future legal disputes and termination decisions.

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The Advantages Of A Probationary Period

• Employer Assessment: Employers have a set period to evaluate an employee's performance, skills, and fit within the company before making a long-term commitment.
• Risk Mitigation: It minimizes hiring risk, as employers can terminate employment more easily during the probationary period if the employee does not meet expectations, reducing the risk of long-term underperformance.
• Employee Adjustment: For employees, probation periods provide time to adapt to the role, understand company expectations, and acclimate to the work environment without the immediate pressure of permanent employment.
• Regular Feedback: Employees often receive consistent feedback during this period, giving them a chance to improve their performance and align with employer expectations.

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The Disadvantages Of A Probationary Period

• Job Insecurity: Employees may experience uncertainty, knowing that their employment could be terminated more easily during this period.
• Limited Benefits: Some employers offer restricted employee benefits, such as healthcare or bonuses, during the probationary period, which may reduce employee satisfaction.
• Insufficient Evaluation Time: For certain roles, a typical 90-day probationary period may not be sufficient for employers to fully assess an employee’s abilities, potentially leading to premature decisions.
• Increased Stress: The pressure of being under evaluation can create stress for employees, impacting their performance and potentially skewing the employer's perception of their true capabilities.

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What Happens When A Probation Period Ends? 

Employment

Successfully completing the probationary period means that a new employee has met the requirements and expectations outlined in the employment contract or job offer letter.

It means that the new hire has:

• Met performance expectations.
• Adhered to company policies, rules, and procedures.
• Demonstrated skills and competence.
• Fit into the company's work culture and worked well with the team.
• Showed ability and willingness to adapt to new challenges, learn, and grow in their role.
• Maintained professional behavior and work ethics and did not receive disciplinary action.

In this case, the new hire's suitability for the role is confirmed for continued employment through a written confirmation letter or an upgrade of their employment status in the organization’s HR system.

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Termination 

Should an employee not successfully complete the probationary period, the employment relationship will be brought to an end after the probationary period. This usually occurs when one of the parties (the employer or employee) is not satisfied with one or many aspects of the employment relationship. 

Probationary Period Extension 

In some cases, an employer may prolong the initial trial phase of a new employee's tenure. This extension provides additional time to assess the employee's performance, skills, and overall fit within the organization before confirming permanent employment. Extending a probationary period can be beneficial for both parties, offering the employee additional time to demonstrate their capabilities and the employer a more comprehensive basis for making a final decision.

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What Rights Do Employees Have During Probation?

During a probationary period, employees retain several fundamental rights and entitlements, though access to certain benefits may vary depending on company policies and local probationary period laws.

These statutory rights include: 

• Minimum Wage: Employees are entitled to receive at least the national minimum wage from the start of their employment, regardless of probationary status.
• Paid Leave: Probationary employees accrue and can utilize statutory leave entitlements, such as annual leave and sick leave, beginning from their first day of work.
• Protection from Discrimination: All employees are protected against unlawful discrimination and harassment in the workplace, irrespective of their probationary status.
• Notice Periods: After the first month of employment, employees are entitled to a minimum notice period, typically at least one week, if their employment is to be terminated. 

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Receiving Compensation During Probationary Periods 

During probationary periods, employees are typically compensated similarly to permanent employees, but the specifics of probationary pay can vary depending on company policies and local labor laws. Employees may have to wait until the probationary period ends to provide full benefits. In some cases, employers may offer employees a raise or a performance bonus to reward them for their commitment. 

For both parties, it’s important to clarify how compensation and benefits will be handled in the employment contract before the probationary period begins.

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Probationary Period Laws and Regulations 

Unfair termination during the probationary period may have legal implications because probationary periods are subject to statutory employment laws and regulations. Our Global Hiring and Termination Guides give you an overview of local labor laws in over 180 countries. 

Employers should understand their probationary period's responsibilities to avoid costly legal fines and penalties. Important legal aspects to keep in mind during the probationary period include:

• Notice periods: Probation notice periods are shorter than the standard notice period. That means either the employer or the employee can terminate the contract with a shorter notice period.
• Unfair dismissal: Automatic unfair dismissal or wrongful termination during the probationary period for illegal reasons like discrimination, assertion of one’s employment rights, or whistleblowing can have serious legal consequences for your company. 

To avoid trouble, employers should follow fair dismissal procedures, complying with probationary period notice requirements, due process, and statutory employment laws.

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How To Effectively Manage Probationary Periods As An Employer 

Managing probationary periods effectively ensures that both the employer and the employee have a positive experience and helps employers make well-informed decisions about hiring. Here are a few ways employers can manage probationary periods successfully:

• Set Clear Expectations from the Start: Before the probationary period begins, clearly outline the expectations for the role. This clarity helps employees understand what they need to accomplish to pass the probation period.
• Regular Feedback and Communication: Provide ongoing feedback throughout the probationary period. This means scheduling regular check-ins to discuss the employee’s progress. This helps employees adjust and gives them a chance to improve based on clear guidance.
• Document Performance: Keep detailed records of the employee’s performance during the probation period, noting their strengths and weaknesses. Having documented performance reviews helps justify decisions related to employment, whether that’s offering a permanent role or terminating the employment.
• Provide Support and Resources: Ensure that employees have access to the necessary tools, training, and resources to succeed during their probation period. Offering support demonstrates that the employer is invested in their success and helps employees perform at their best.
• Have a Clear Process for Decision-Making: At the end of the probationary period, use the documented feedback and performance evaluations to make an informed decision. No matter the outcome, ensure that the process is fair, transparent, and aligned with company policies.

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