Avoiding the Snowball Effect



Ideally, you have a business where the team is doing well – people are motivated, they work cohesively, punctuality and reliability is not a problem, and you have confidence they enjoy their jobs.

All your staff respect the business and the management team, and are aligned with the company’s values. There are no performance improvement plans in place and you haven’t had to pull someone aside to discuss misconduct.

However, reality is, at least one of these factors doesn’t apply to your business and you don’t really know where and how to move forward.

There have been multiple cases in the media recently relating to personal grievances in NZ. For example, in October last year an article was published on Stuff.co.nz describing how a business ended up having to pay an employee $29,000 after dismissing him unfairly having insufficient investigative proof (www.stuff.co.nz/ business/97691624/house-partner-job-gonebut- worker-given-29000).

Another example was published on the 10th of February, 2018 when an employer ended up being ordered to pay an employee almost $11,000 after dismissing her unfairly and not following the 90-day trial clause appropriately (www.stuff.co.nz/business/101308155/ employer-tries-to-fire-worker-under- 90day-trial-fails).

To put things into perspective, check out the following statistics:

  • The average cost to lose at the Employment Court is $35,000 (not counting time lost being away from your business)
  • The average cost to win at the Employment Court is $7,000 in legal fees that you can’t recover
  • The average of rulings is 50 percent in favour of the employee (www.hrtoolkit.co.nz Published in April 2016)
  • The average compensation for humiliation between July and December 2016 was $5,000 — $7,000 (www.employment.govt.nz Published in 2017).

Awards for loss of dignity:

  • For less serious breaches: awards up to $10,000
  • For moderate breaches: awards between $10,000 – $50,000
  • For the most serious breaches: awards in excess of $50,000.

(www.lawsociety.org.nz, published in March 2017).

These are some of the realities of poorly managed issues that can easily turn into a personal grievance. Often a small issue can snowball into something out of control, seeing your business lose time, money and reputation.

Which raises the questions: do you feel your business is prepared to step in when these issues first arise? And more importantly, do you feel your business is ready to protect itself against a personal grievance?

A lot of our small to medium-sized clients don’t have a dedicated HR person to jump in and help when these situations arise, and this often opens the business up for these snowball scenarios.

The first thing we suggest you do is look at your current confidence and knowledge levels and determine where you sit on our scale. Then you will be able to see how much assistance you may require.

Rate your knowledge and level of confidence in the following areas between 1 (low) and 5 (high):

  • Dealing with poor performance
  • Managing high performers
  • Identifying potential within your staff
  • Managing expectations
  • Setting KPIs
  • Managing performance reviews
  • Personnel information and privacy act
  • Contract compliance
  • Establishing if someone is an employee or a contractor
  • Employment Relations Act 2000.

There is a total of 50 points to be gained:

  • 10 – 30 points indicates you have limited systems and processes and are at risk (Recommendation: You would require a full review and implementation of processes)
  • 30 – 40 points indicates you have areas you could improve that need attention (Recommendation: You would require a review to identify the key areas you need strengthening)
  • 40 – 50 points indicates you have strong systems and processes (Recommendation: You would only require assistance on a “as required basis”).

What are some of the benefits of having improved systems and processes?

  • Confidence in your compliance
  • Effective training and development
  • Improved structure in your processes
  • Higher retention of staff from better performance management
  • Identify poor performers and act quickly
  • Ability to remove underperforming staff effectively
  • Protection from personal grievances
  • Higher performing and engaged staff
  • Lower risk of fines and being in court.

Our service is so flexible that you can either have us on speed dial or may only need to approach us once a year, with the odd question. Either way, we can help!


By Amanda Chase – HR consultant at Building Recruitment with experience working in the HR field for many years. If you feel your business could use a hand in HR matters, please feel free to contact her on 021 528 570, or email amanda@buildingrecruitment.co.nz.

Author: magazinestoday

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