Do you even need "probationary" periods?

Probationary periods were historically used in a unionized environment.  Once an employee met their probationary requirements, they were fully covered by the union contract.  Within a unionized environment, the benefits of a probationary period were clear: the employer knows they can freely evaluate an employee and employees who survive probations receive union protections.  However, today only 6.4% of private-sector workers are covered by a union contract.  Thus, what benefit does such a probationary period provides in a non-union context?  Employers may think establishing a probationary period is a good way for them to “test out” a new hire.  Yet, this may not be the most effective way to do this.  True or not, employees who survive the probationary period may have the perception of permanency within their job.  This can create an increased responsibility on the employer as it blurs the “at-will” relationship.  This can lead to increased legal exposure.  What should a small business owner do?

First, language matters.  Should a small business owner decide that a “probationary period” is appropriate for their environment, they should articulate this in a way that limits their exposure by clearly communicating the employment relationship at each step of the way.  For example, small business owners might indicate they are engaging in an onboarding period that in no way impacts the at-will relationship.  The length of this period as well as expectations of performance and behavior during this period should be articulated in writing.  

Second, businesses must regularly evaluate employees.  Even outside of any introductory period, employers must take the time to discuss performance, document any performance issues, and communicate these issues to employees.  This is part of good management practices.  Failure to document problems leads to communication issues and can open the employer up to liability.  In short, it is challenging to defend against a claim if you do not have any documentation to support your version of events.  As part of an introductory or onboarding process, these communications and evaluations should be more frequent, but should not stop once the employee has been onboarded.

Third, engage in smart hiring processes.  Businesses hire out of need and often with a sense of urgency.  This leads to the temptation to rush the hiring process and not fully vet candidates.  This leads to poor hiring decisions.  Rather, employers should perform reference checks, engage in thorough interviews, and perform evaluations as appropriate to their business.  While hiring a new person is always somewhat of a gamble, these steps can at least reduce the risk.

While probationary periods may have a role in a union context, we should understand their usefulness outside of this context.  Employers should ensure that they are clear on the at-will nature of the employment relationship. They should use clear language, clear evaluation and documentation procedures, and use strong hiring processes.  This will limit their exposure while giving them the freedom they need to evaluate and discipline employees new and old.