What happened
Good Guys Construction Co. wants to make sure it hires the right person for any open position with the company. After making a hire, Good Guys explains to the new employee that the first 90 days is a probationary period during which the company and the employee can determine whether the employee is the right fit for the job and the company.
Why it’s a problem
Probationary or introductory periods may jeopardize Good Guys’ at-will employment policy. At-will employment means that the employer and the employee can terminate the employment relationship for any reason or no reason, except for certain exceptions prohibited by law. In a number of court decisions, probationary or introductory periods were ruled to have created an implied employment contract that gave the employee extra job security once the initial period was completed. In other words, these cases suggest that once a new employee successfully completes the initial 90-day probationary period, the burden is on the employer to show a valid reason to terminate that employee.
What you should do
There are no advantages to having a defined probationary or introductory period. A better practice for employers is to develop a formal performance review process in which all employees are evaluated 90 days after their hire date, and at least annually thereafter. This performance review program should include a statement that an employee’s performance can also be informally evaluated at any time throughout the year. This practice achieves the same outcome for the employer as a probationary period, without implying extra job security for the employee after the initial employment period is completed.
Douglas Delp is founder of The Delp Group, which provides human resources services to small businesses.
