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Probation periods: awkward problem or elegant solution

BY: MICHAEL STERN March 28, 2007


Probation: It’s for misbehaving high school students and dubious new hires, right?

Not exactly. Setting out a probation period for new recruits is actually a powerful management tool. And while some companies are still nervous about using it, my experience is that more employers are starting to realize how useful probation can be.

You probably know how it works. When an organization makes a hire, the new employee receives a letter of agreement that sets out not only the position, the starting date and the compensation terms but also the fact that for the first six months (or similar period), the recruit enjoys a “special” status. They are on probation, which essentially means that they’ll have to earn permanent status.

In theory, probation implies that the employer isn't 100% sure that the new employee is going to work out. Naturally, many recruits find that notion disturbing, and would prefer the perceived protection of permanent status.

If you can get beyond doubt and disappointment, however, my experience is that probation often turns out to be the best approach for both employer and new employee.

Employers find probation reduces their risk. If a new employee proves unable to do the job, they can terminate his are her employment without actually “firing” them. Provincial laws generally impose a lower standard for termination of newcomers on probation than for other employees.

Organizations that dismiss people within their probationary periods can generally expect to encounter less resistance and lower severance costs than with dismissed permanent staff. But that doesn't give them carte blanche to hand out pink slips: in case of dispute, any dismissal of employees on probation will need to justified with written documentation of the problems encountered and the employer’s attempts to resolve those problems.

New recruits generally dislike probationary periods because they feel they are “auditioning” for a job instead of starting one with full authority. It’s a flimsy worry, however, since most new employees, on probation or not, are being evaluated to ensure they “fit.”

Besides, companies are in no hurry to overturn hiring decisions. Recruiting is a distracting, time-consuming and expensive process; nobody hires people expecting to throw them out in six months.

Still, there's no denying probation gives employers a robust evaluation tool. You can conduct all the interviews, psychological testing and reference checks you want, but there's no better way to judge how someone will do on the job than to see them on the job.

The most senior jobs and highly specialized positions are in better bargaining positions. Executive vice-presidents and CEOs will often negotiate severance agreements that explicitly set out the payments to be made if the candidate’s employment is terminated after specific lengths of time.

“In demand” candidates such as specialists in technology or investment banking—or any job applicant in Fort McMurray -- can also generally resist probationary status.

But even if you lack the clout to negotiate probation, there are good reasons to accept it. In my experience, probationary periods may actually make early dismissals less likely.

After all, when good hires go bad the problem is rarely performance. Again and again I’ve seen problem stemming from misaligned expectations, usually caused by a failure to communicate.

I’ve complained before that, after enduring all the hassle of finding and wooing new people, many companies turn their backs on them. Instead of helping them through the first few months on the job, through mentoring, feedback and frequent meetings with their supervisor, they often leave new executives to flounder.

The standard excuse: everyone was so burned out by the hiring process (“I had to do two jobs for six months!”) that the new candidate’s supervisor can’t wait to catch up on their own work – often leaving new arrivals to learn the ropes themselves.

Probation forces employers and new recruits alike to recognize that a hiring is the beginning of a process, not the end. Having a deadline linked to a decision point actually focuses management’s attention integrating and evaluating new people – instead of leaving them in indefinite limbo.

And even if it doesn’t focus every employer on helping new hires, probation makes it much easier for a new executive to ask, “How am I doing?” without looking paranoid.

Either way, the result is a better-managed transition, with an emphasis on ongoing evaluation that ensures that any problems will likely be identified, discussed and resolved – not ignored and left to fester.

In a perfect world, all candidates would work out brilliantly, and all employers would manage transitions consistently and professionally. But in an imperfect world, probation can be an elegant solution.