Poor employee performance: How to document it legally before termination

Termination due to poor employee performance is one of the most sensitive procedures in Serbian labor law.

Although, from the employer’s perspective, the situation is often obvious (the results are poor or entirely absent), before a court, a subjective feeling that an employee is not the right fit is not evidence. Without precise, chronological, and legally grounded documentation, any termination risks becoming the subject of a costly and uncertain labor dispute.

In this article, we analyze in detail how to prove that termination was the last option, not the first option chosen by the employer.

What Qualifies as Poor Employee Performance?

If you are dissatisfied with your employee’s work results, before taking any steps toward termination, it is necessary to go back to the very beginning: the employee’s employment contract and the Rulebook on Organization and Job Classification. What do these documents say — what is the job description of that specific employee?

For unsatisfactory performance to be assessed as such, the employee must be informed in advance about their obligations. If job descriptions within the company are vague or outdated, or if the employee has been performing tasks that differ from those described in their contract and rulebook, then “failure to achieve work results” cannot serve as grounds for termination.

Responsibility for aligning expectations with actual performance lies with the employer.

Recommendation: Regularly update job descriptions and inform employees accordingly (through signing employment contract annexes). If an employee is expected to meet specific performance standards, those standards must be documented somewhere (e.g., sales targets, number of processed cases, project deadlines), and the employee must be informed of them.

Poor Employee Performance vs Employee Misconduct

The Serbian Labor Law makes an important distinction between two grounds for termination:

1. Failure to achieve work results (lack of ability/knowledge): The employee simply does not achieve the expected results — they are not sufficiently competent.
2. Violation of work obligations or discipline (has the ability, but refuses): The employee works negligently or carelessly, or unjustifiably refuses the employer’s instructions.

Why is this important? Because the documentation process differs.

In the first case, when the employee lacks knowledge or ability, this is an objective deficiency that, in principle, is not a matter of will. In such situations, it must be determined whether the employee received adequate training and, if not, why not. If technology or job requirements have changed, was the employee given an opportunity to adapt?

Here, documentation must show that the employer attempted to resolve the issue before termination: that the employee was offered training, mentoring, or reassignment to another position; that they were warned they would need to adapt and given a reasonable deadline. Without documentation confirming all of this, the termination may appear as an attempt to solve a problem that was never seriously communicated to the employee.

In the second case, when the employee has the ability but knowingly fails to deliver results, refuses instructions, or violates rules — this is a behavioral issue, not a competency issue.

Here, documentation serves a different purpose: specific incidents, dates, circumstances, and potential witnesses are recorded. It is documented that the employee clearly understood the instruction and still refused or ignored it. It is also documented that the employee was warned in writing and that the behavior did not change.

Confusing these two situations leads to serious mistakes. If a manager fails to understand that the issue is not one of will, but rather knowledge and/or ability, they may incorrectly direct the termination procedure.

How Serbian Courts Evaluate Poor Employee Performance

In judgment Rev2 3792/2022 dated March 20, 2025, the Supreme Court emphasized the distinction between employee incompetence and objective obstacles to achieving expected results:

“Whether the assigned goals (tasks) can objectively be achieved within a specific period must be examined in each individual case. In doing so, it is not sufficient to merely monitor the employer’s financial results, which in the defendant’s case were also defined as specific employee targets and primarily expressed through the number and volume of credit agreements, deposits, and overdraft contracts concluded by each employee, with expected increases from quarter to quarter (regardless of market conditions). This is because financial results also depend on numerous external factors affecting market saturation for the services offered by the defendant bank (economic development and activity in the area where the bank branch is located, the number of potential clients gravitating toward the branch, their economic status, the presence of other banks in the same location, etc.).

An employee’s attitude toward their work is assessed not only based on the volume of completed work, but also on the quality of that work, their relationship toward work obligations and clients, and their overall commitment during the observed period.

It is also necessary to consider the claimant’s decades-long attitude toward work, reflected in the fact that their salary coefficient had been permanently increased several times, that shortly before termination their work was highly rated through a ‘mystery shopper’ method and subsequently rewarded, and that the employer had no complaints regarding the quality of their work even at the time of termination, which is an inseparable part of competence — the second criterion used in evaluating employees.

Nor can the structure of tasks assigned to the claimant and the time required to perform tasks that they alone performed, or performed more frequently than others, be ignored (complaints handling, loan closure, loan insurance, final insurance in the event of a borrower’s death), nor the influence of other factors contributing to expected performance results (e.g., the absence of a unified queueing system in the bank).

Finally, employer instructions aimed at improving work performance must contain specific guidance on how the employee should perform their duties within the period set for improvement in order for their performance to be considered satisfactory. In this specific case, instead of providing concrete guidance on how the stated goals could be achieved within a short timeframe, the employer’s instructions essentially repeated desired goals (‘achieving assigned targets related to profit realization, product sales, and other goals,’ ‘continuous improvement of all activities,’ etc.) and described expected competency characteristics (‘maintaining professional and flexible client relations,’ providing ‘prompt and efficient services,’ ‘active offering, active referral, active participation,’ etc.), even though the employee evaluation concerned numerical performance indicators rather than competencies.”

How to Document Poor Employee Performance

Before initiating any procedure due to unsatisfactory performance, the employer must do several things.

First, clearly communicate to the employee in writing what the specific expectations are: what tasks need to be completed, what performance standards apply, and what the deadlines are.

Second, allow them a reasonable period to meet those standards or adapt to new requirements.

Third, provide feedback during that period — not only at the end when the decision has already been made.

Documenting unsatisfactory employee performance begins before formal warning.

Written Communication – Email as Evidence

Verbal conversations and warnings are not strong evidence in court. Every time you notice an employee’s failure, send an email that:

• Specifies the task that was not completed
• Reminds them of the missed deadline
• Offers assistance or clarification if there is an issue with understanding the task

Meeting Minutes

If you hold a meeting regarding an employee’s performance, make sure to prepare brief minutes. State what was criticized, how the employee responded, and what further steps were agreed upon. Send these minutes to the employee after the meeting.

Performance Improvement Plan (PIP)

Although not explicitly required under Serbian law, introducing a Performance Improvement Plan is one of the strongest indicators of the employer’s good faith. The document should specify:

• What exactly needs improvement
• Within what timeframe (e.g., 30 or 60 days)
• What resources or training will be provided to the employee, especially who will mentor them during the process

Termination for poor employee performance: Formal warning requirements

When all internal measures have been exhausted and results are still lacking, the formal legal process begins. The warning regarding the existence of grounds for termination must be:

• Specific: Do not use phrases such as “the employee is not achieving expected results,” but rather “the employee exceeded deadlines on three key projects during period X to Y (list the projects).”
• Documented: All evidence must be attached to the warning (reports, emails, client statements).
• Accompanied by legal instruction: The employee must be given at least 8 working days to respond to the warning.

FAQ – Poor employee performance – Frequently Asked Questions

Are Slack or Viber messages considered evidence in court?
Court practice generally follows social developments, so such messages would likely be considered relevant evidence. However, official email remains a safer and more professional form of evidence. It is recommended that key objections always be sent via official email.

What if the employee refuses to receive the warning?
If the employee refuses personal delivery at the employer’s premises, an official note should be prepared (preferably in the presence of witnesses). The document should then be sent by mail (registered mail with return receipt) to the address listed in the employment contract, and if that fails, posted on the company notice board.

Can an employee be terminated for poor performance while on sick leave?
The warning cannot be delivered to an employee while they are on sick leave, so the legal procedure cannot begin until the employee returns to work.

How long can the process of documenting unsatisfactory performance last?
The employer may terminate the employee within six months from the date they became aware of the facts constituting grounds for termination, and no later than one year from the occurrence of those facts. Events older than one year are considered time-barred.

Conclusion

Termination due to poor performance is not an employer’s whim — it is a business decision based on facts.

Employers who begin lawful documentation on time protect themselves from labor disputes that can last months (or years) and often end with the payment of substantial compensation. Since employees are considered the weaker party in labor disputes, the employer will bear the burden of proving before the court that all reasonable measures were taken to avoid termination.

In such situations, timely consultation with a lawyer has proven to be a reasonable decision in order to ensure that the entire process is conducted in accordance with the law and without unnecessary risks.

Law Firm Petrović Mojsić & Partners