How can small businesses structure performance reviews to avoid bad hires?

In this week's edition of Let's Talk, our experts discuss how to structure performance reviews and probation processes so you don't get stuck with a bad hire.

Yajush Gupta
Yajush Gupta
Let's Talk · 6 Oct 2026 · 2 min read
Above How can small businesses structure performance reviews to avoid bad hires?. Dynamic Business

Hiring the wrong person is one of the most expensive and disruptive mistakes a business can make, yet many organizations rely on outdated annual performance reviews to catch problems when it is already too late.

By the time an annual review or a final probation meeting rolls around, months of poor productivity, low morale, and missed targets have already drained time and capital. The core issue usually stems from vague job expectations, delayed feedback, and treating probation as an administrative formality rather than an active evaluation period. To protect your business from getting stuck carrying a mismatched hire, performance management must shift from a yearly event to a continuous, transparent rhythm of clear goals and early check-ins.

In this week's edition of Let's Talk, our experts discuss how to structure performance reviews and probation processes so you don't get stuck with a bad hire

Tahnee McWhirter, Partner, HumanX HR

“If your performance review is the first time someone hears they’re not performing, the problem probably isn’t your performance review. It might be you.

Performance shouldn’t be an annual event. It should be a rhythm.

Set clear expectations from day one: what does good actually look like in this role? What outcomes matter? What behaviours matter? Then talk about them regularly. Give feedback early, ask questions, document what matters and address gaps while they’re small. Not six months later when everyone is frustrated.

Don’t use probation as a reason to delay the hard conversations. Those first few months should be full of check-ins: What’s working? What isn’t? What support is needed? Are we seeing the capability and behaviours we hired for?

Sometimes you’ll still make the wrong hire. It happens. But a good performance rhythm means there should be very few surprises.

A good performance rhythm gives people a genuine chance to succeed, and it gives you the clarity and confidence to act when they’re not.”

Damien Gooden, Group CEO, HR Central

“Here’s the brutal truth: most businesses don’t get stuck with a bad hire. They keep one.

You normally know pretty early when something isn’t right. The work isn’t there. The attitude’s off. Deadlines become suggestions. Everyone else notices. But you tell yourself,

“Let’s give them a bit more time.”

Then probation passes, Christmas rolls around, they’ve got a favourite coffee mug in the kitchen, and somehow, they’re part of the furniture.

Don’t rely on an annual performance review to fix this.

From day one, make three things crystal clear: what you expect, how you’ll measure it, and when you’ll review it.

Then set times for short, regular conversations. What’s going well? What isn’t? What needs to change? What support do they need? And what happens next?

Most importantly, don’t save difficult feedback for later. If something isn’t working, say it early, clearly and fairly. Give the person a genuine opportunity to improve and keep a sensible record of the important conversations.

Performance reviews shouldn’t be an annual ambush.

They should make sure nobody is surprised, including you.

And remember: hope is not a performance management strategy!”

Sloane Antonacci, Co-Founder, Teeny Tiny Homes

“Businesses can avoid getting stuck with a bad hire by employing on proven technical skill first and creating a culture where workers are rewarded for quality. At Teeny Tiny Homes, every contractor operates against objective KPIs tied directly to fixed production milestones because we purposely flipped traditional performance reviews on their head - shifting from managing hours to managing outcomes.

Because our construction targets and compliance standards are digitised on tablets and visible on the worksite daily, the team manages performance itself, and any substandard work creates an immediate bottleneck that the team calls out on the spot. Our team leaders evaluate productivity, communication and milestone delivery before sitting down with management. This creates instant personal accountability, highlights proactive hiring improvements, and has enabled us to increase output by 333% in two years while continuing to design and construct A1-certified quality homes.

When you hire for skill, set transparent milestone metrics and empower leaders to self-evaluate, poor performers step up immediately or weed themselves out long before review time.”

Andrew Healey, Leadership Coach, Prospice Consulting

“Most bad hires aren’t a screening failure — they’re a role clarity failure that shows up later. If you can’t say specifically what decisions this person owns, what “good” looks like in their first 90 days, and who reviews what by when, you don’t have a hire, you have a hope.

Structure the review before the hire starts, not after cracks show. Define three or four concrete decision rights the role carries, tied to observable outcomes rather than traits like “attitude” or “fit.” Schedule the first check-in at 30 days, not 90 — early enough to course-correct without triggering ego on either side.

At each review, ask two questions: are they making the decisions this role requires, and are they making them well? If the answer to the first is no, that’s a role design problem, not necessarily a performance problem. Untangling those two before deciding “bad hire” saves you from firing someone for a job you never actually defined.”

Pam Macdonald, Director, Broadspring Consulting

“Start early with feedback.

In the interview, explain that there are regular informal conversations about performance.

Make sure that every leader understands that good performance is not only what is done, but also how it is done.

During the probation period schedule a structured conversation every month about progress of performance towards performance goals and expectations.

All of this relies on you being clear and precise about what you expect and how you define good performance.

Clarity about what good performance in a role looks like needs to start before you go to market with a vacancy. Review the job description and how the position contributes to the team and the company. Write the ad to attract candidates with those capabilities. Use interview questions that draw out experience and approach. Ask good reference check questions. Then hold regular conversations.

Focus on what good performance includes and aim to give praise when performance and conduct match that ideal. Ensure that training and on the job coaching guides employees towards what good looks like rather than “how I’ve done it””

Catie Paterson, Director

“Waiting for an annual review to address a mismatched hire is a costly leadership trap. To protect your business from getting stuck with poor performers, performance management must be front-loaded into the probationary period through continuous, structured evaluation.

Start by replacing subjective probation checks with objective 30-60-90 day scorecards. From day one, establish concrete deliverables, core competency benchmarks, and cultural expectations. When performance is tied to transparent metrics rather than vague impressions, underperformance becomes obvious to both parties early.

Next, implement mandatory, fortnightly calibration check-ins during the first six months. These sessions should explicitly document progress against the scorecard and address misalignment in real time. If red flags emerge, formalise specific corrective steps immediately rather than waiting for probation deadlines to loom.

Finally, treat the end of probation as a deliberate, decisive gateway, not an administrative formality. A structured review should require active sign-off backed by documented performance evidence. If an employee cannot meet agreed milestones with clear coaching during their first few months, make the clean break before probation expires. Structure creates the clarity required for decisive action.”

Michael Russell, Managing Director, Finwave Finance

“Most performance review systems are designed to document what has already gone wrong rather than catch it early enough to matter. By the time a formal review confirms a bad hire, the business has usually been carrying the problem for months.

The fix is not a better review template. It is earlier checkpoints with a clear standard attached to each one.

Set expectations in writing before the person starts. What does good look like at thirty days, sixty days, and ninety days? Not attitude or culture fit, which are subjective and hard to act on, but specific observable outputs. If you cannot write down what success looks like, you cannot fairly assess whether someone is achieving it.

At each checkpoint, ask two questions directly. Is this person meeting the standard we set? And is there anything we have not provided that would change the answer? Early underperformance is often a management or onboarding failure, not a hiring one. Ruling that out protects you legally and practically.

The checkpoint most businesses skip is day forty-five, midway through probation. That is when patterns are visible but there is still time to course correct or make a clean exit before the relationship becomes harder to unwind.

Probation only protects you if you use it deliberately. A ninety-day period that ends with a surprise is a process failure, not a hire failure.”

Roxanne Calder, Founder, EST10

“Firstly, a poor performance review should never come as a surprise, and feedback shouldn’t be saved for annual reviews. If you are dissatisfied with an employee’s performance, the review should not be the first time your employee hears of the problem. Be well prepared for the review; write the issues down beforehand so the emotion doesn’t take over. Have real examples where performance is not met and don’t use generalisations like, ‘be more proactive’. The performance should be aligned with documented KPIs and/or a job description, not a made-up notion of performance. Be specific where performance is not meeting expectations and explain what good performance looks like. Importantly, make the conversation two-way. Ask for your employee’s input and what might be impeding their performance. A performance issue may be about capability and effort but equally can also expose unclear expectations, communication, inadequate training, and poor management. Finally, finish with a clear plan: what needs to change, what support will be provided and how improvement will be measured.”

Angela Vidler, Managing Director & Co-Founder, Hyvid

“The biggest mistake businesses make is waiting for the annual performance review to discover someone isn’t working out.

Performance needs to be managed from day one, with very clear expectations around what the person owns, what good looks like, and what outcomes they are expected to deliver. Then build in regular checkpoints, particularly during probation, so you’re assessing evidence rather than relying on a subjective impression months later. Set formal reviews at 30, 60 and 90 days, and make a genuine decision well before probation ends, not in the final week.

This becomes even more important as AI changes roles. Performance shouldn’t just be measured by how much work someone personally completes. It should include how effectively they use technology, exercise judgement, validate output, manage exceptions and ultimately take responsibility for outcomes.

At Hyvid, we think about this in terms of capacity and output rather than headcount. The question isn’t “Is this person busy?” It’s “What are they actually delivering, and are they increasing the capability of the business?”

My advice is to make performance conversations frequent, specific and evidence-based. If someone is struggling, identify it early, be explicit about what needs to change and give them a genuine opportunity to improve.

A bad hire becomes expensive when ambiguity allows poor performance to continue. Clear expectations and regular accountability give both the employee and employer the best chance of getting it right.”

Jennifer Bicknell, Lawyer & Dispute Prevention Advisor, Bicknell Law & Consulting

“It may seem obvious, but make sure you actually have reviews. Nobody tries harder than they do during probation. Schedule a review early to make sure that you are on the same page. Thereafter, make each one count. Ask yourself, “What does achieving expectations look like in this role?” Give real examples. Don’t just say “could be more proactive.”

If it’s going well, say so. If it isn’t, say that plainly too. A review that says someone “meets expectations” for someone who doesn’t will come back to haunt you.

Ask what’s getting in the way. It might be training, tools or a manager who never explained the role. Agree on what needs to change, the support you’ll give, and when you’ll check progress.

Finish with a short written summary they can read and respond to. Then follow up and raise new problems as they happen, not at the next review.

Have any necessary but difficult conversations while you’re still deciding whether they can succeed, not in the week after probation ends when you’ve decided they can’t.

Probation isn’t a safety net. It’s the best chance you’ll get to find out who you actually hired.”

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