Usually lasting between 60 and 90 days, a probation period can give you some time to assess whether a new hire fits in with your company. While this introductory period can help reduce your risk as an employer and possibly save you some money, there are also some legal challenges, effects on employees and possible impacts on your company reputation to consider. Understanding the advantages/disadvantages of probation periods at work can help you decide whether your company should implement this arrangement or consider an alternative option.
One of the benefits of using a probation period is that it allows both the employer and employee to decide if the working relationship is a good fit. You can evaluate whether the new hire fits in with the company culture and has the necessary skills. At the same time, your new hire gets a chance to see if he really likes the position and company atmosphere.
A probationary period also gives you a chance to evaluate new hires more closely and avoid retaining new hires who can't meet the standards. You can schedule more frequent performance reviews during the probation period and offer the new worker some additional training and attention. This can ensure your new hire is ready to work productively and do quality work when the probation ends.
Giving new hires a probationary period can also help your company save money. New hires might get paid less, work fewer hours and not get their benefits until they successfully complete the period. If your company follows this practice and your new hire doesn't work out, your company will have saved some money in wages and benefits versus hiring them without probation.
Probation periods can lower morale for new hires and result in lower performance. Since they may feel that their jobs are at stake, new hires can feel more stress and feel less valued by the company. This can cause your new hires to have less confidence doing their work, resulting in higher turnover, lower productivity and reduced work quality.
Another of the disadvantages of a probationary period is that it creates legal risks in states where employment is at will, meaning you can let employees go for any reason not otherwise protected by law. Employees might confuse passing the probation period as a promise of continual employment, and they may try to take legal action against the company if they're dismissed. The Society for Human Resource Management suggests putting a clear explanation of your probation period in your employee handbook as well as explaining your state's employment laws, such as at-will employment.
Lastly, requiring a probation period can negatively affect your company's reputation. Prospective applicants may have less trust for a company that has a probation period since this may indicate that the company is not confident with its hiring choices. The prospect of little job security can also turn off qualified individuals from applying to the company, especially in a good job market where applicants have many other choices.
If learning about the probation advantages and disadvantages makes you decide to look for an alternative, you can consider implementing a stronger onboarding process. Closely guide your new hires and avoid expecting them to understand and implement all your performance requirements right away. By helping your new hires improve their performance over time, they'll be less overwhelmed and will learn to do the quality work your company requires.
You also have the option to simply offer the frequent performance reviews that a probation period entails without having the probation policy itself. You reduce some of the legal risks this way while still having the ability to find out early on if the new hire will work out for your company. You can choose to offer additional mentoring and training or dismiss the employee if her performance still fails to improve.