Warning Letter to an Employee for Poor Performance (First Warning)

Managing underperformance is one of the hardest parts of running a small business.

On the one hand, you want to support your team and give people a fair chance to improve. On the other hand, poor performance can affect customers, quality, morale and your bottom line - and if it isn’t addressed properly, it can also create legal risk if the employment relationship later ends.

A well-written warning letter to employee for poor performance is one of the most practical tools you can use. It creates a clear paper trail, sets expectations, and gives the employee a reasonable opportunity to improve.

In this guide, we’ll walk you through when a warning letter makes sense, what to include (especially for a first warning letter for poor performance), and how to handle the process fairly and consistently.

Note: This article is general information for Australian employers and isn’t legal advice. Your obligations can vary depending on the employee’s award or enterprise agreement, employment contract, workplace policies and the circumstances.

What Is A Warning Letter For Poor Performance (And Why Does It Matter)?

A warning letter to employee for poor performance is a written document that:

• clearly identifies the performance issue(s)
• sets expectations about what “good performance” looks like
• gives the employee a chance to improve within a reasonable timeframe
• records what support or training you’ll provide
• explains the potential consequences if the performance does not improve

From a small business employer perspective, this kind of letter is helpful because it reduces confusion and creates accountability. It can also help you demonstrate procedural fairness - meaning the employee is told what the issue is and given a reasonable chance to respond and improve.

In many workplaces, warnings are part of a broader performance management process. If things escalate, a clear written record can be important when you need to show:

• you communicated expectations
• you provided support
• you acted reasonably and consistently

Just as importantly, a warning letter can often be the turning point where performance improves. People can’t fix what they don’t understand - and vague feedback like “you need to do better” rarely helps.

Poor Performance vs Misconduct: Why The Difference Matters

It’s worth pausing here, because employers often mix these up.

• Poor performance is about capability, output, quality, timeliness, or not meeting reasonable role expectations (for example: repeated mistakes, slow turnaround, missed deadlines, not following processes due to lack of skill or attention).
• Misconduct is about behaviour - for example: theft, serious safety breaches, bullying, refusing lawful directions, intoxication at work, serious dishonesty.

The right response depends on which bucket the issue falls into. A warning letter for poor performance usually sits within a coaching and improvement framework. Misconduct may require a different kind of process and may justify stronger action depending on seriousness.

When Should You Issue A Warning Letter For Poor Performance?

There isn’t one “perfect” moment to issue a warning letter. But as a rule, you’ll usually issue a warning letter once you’ve identified a recurring performance issue and you need to formally document expectations and consequences.

Common triggers include:

• performance issues continuing after informal coaching
• repeat errors that impact customers, compliance, safety or rework costs
• the employee not meeting measurable KPIs or role requirements
• attendance, punctuality or reliability issues impacting performance (where relevant)
• missed deadlines or failure to follow reasonable workplace procedures

Should A First Warning Letter Come After Verbal Feedback?

In many small businesses, yes - it’s often best practice to start with an informal conversation and coaching before moving to written warnings (unless the issue is serious or urgent).

That said, if you’ve had multiple informal chats already, a first warning letter for poor performance may be the right next step so the employee understands the issue is formal and needs immediate attention.

If you’ve already given a “verbal warning”, you can still issue a written warning that notes you previously raised the issue in earlier discussions (including dates) and that performance still hasn’t improved.

Be Careful With Probation

If the employee is still on probation, the process for ending employment may be simpler in some cases (for example, unfair dismissal risk can be different depending on eligibility). However, you should still act fairly, follow any contractual commitments you’ve made, comply with applicable awards and the Fair Work Act, and document issues clearly.

If you’re unsure, it can be worth reviewing your Employment Contract and any relevant workplace policies so your process lines up with what you’ve promised employees.

How To Handle The Process Fairly Before You Send The Letter

The letter matters - but the process matters just as much. If you want the warning letter to actually help improve performance (and reduce legal risk), it should come after a structured, fair approach.

Step 1: Get Clear On The Performance Issue (Use Evidence, Not Impressions)

Before you meet with the employee, make sure you can clearly explain what is not meeting expectations, using facts and examples.

Helpful evidence might include:

• specific examples of errors or missed tasks (with dates)
• customer complaints or quality reports
• timesheets or project records showing missed deadlines
• policies or procedures that weren’t followed
• KPIs or role expectations the employee agreed to

Avoid framing it as personal (“you’re careless” or “you don’t care”). Focus on objective outcomes (“there were 6 invoice errors in October, resulting in X rework”).

Step 2: Meet With The Employee (And Let Them Respond)

Usually, you should meet with the employee to discuss the issue before finalising the warning letter. This meeting is your opportunity to:

• explain the performance concerns
• ask for their perspective (there may be reasons you don’t know about)
• confirm expectations going forward
• identify what support is needed

Depending on your workplace and the seriousness of the issue, you might allow a support person. Even if it’s not strictly required, allowing it can help the process feel fair and reduce defensiveness.

Step 3: Offer Reasonable Support And A Realistic Improvement Plan

A warning letter shouldn’t just “tell off” the employee. It should set them up to succeed.

Support may include:

• training or re-training on key systems
• additional supervision for a set period
• clearer written processes or checklists
• adjusting workload priorities (where appropriate)
• regular check-ins to review progress

It also helps to be clear about timeframes. The improvement period should be reasonable given the role and the issues. In some roles, you might see improvement within 2–4 weeks. In others, you may need longer.

Step 4: Document Everything

Keep notes of meetings, dates, examples discussed, and any support offered. Your written warning should match what was discussed - surprises can make the warning feel unfair and cause conflict.

What To Include In A Warning Letter To Employee For Poor Performance

There’s no single mandatory format, but a good warning letter to employee for poor performance should be specific, calm, and practical.

Here’s what we generally recommend including.

1. Basic Details

• date of the letter
• employee name and position
• who the letter is from
• whether it is a “First Written Warning” (if relevant)

2. A Clear Summary Of The Performance Concerns

Explain what the performance issue is, with specific examples and dates where possible.

For example:

• “Repeated data entry errors in customer orders (examples on 3 October, 10 October and 24 October).”
• “Failure to meet required turnaround times for client requests (average response time of 5 days, where the team standard is 1–2 business days).”

This is also a good place to reference relevant role expectations, KPIs, or procedures. If you have workplace processes that are meant to be followed, ensure they’re consistent with your written policies and contracts.

3. Why The Issue Matters

Link the issue back to business impact in a measured way, such as:

• customer experience and complaints
• safety or compliance concerns
• impact on other team members
• additional cost and rework

This helps the employee understand the seriousness without making the letter feel personal.

4. The Required Improvement (What “Good” Looks Like)

Be concrete. The employee should be able to understand exactly what’s expected going forward.

Depending on the role, you might include:

• accuracy targets
• timeliness requirements
• quality standards
• behavioural expectations that relate to performance (for example, following processes and directions)

If expectations aren’t written down anywhere, this is where employers often run into trouble. Consider whether you need clearer position descriptions, procedures, or updated employment documentation.

5. Support You’ll Provide

Include what you will do to help the employee improve. This can be as simple as:

• re-training on a system
• buddying with a senior team member
• weekly check-ins
• providing written instructions or checklists

Being clear on support also shows you’re acting reasonably and not setting them up to fail.

6. Timeframes And Review Date

Set out:

• the review period (for example, 2–4 weeks)
• when you will meet again to review progress
• how performance will be assessed (for example, KPI reports, error rates, manager review)

7. Consequences If Performance Does Not Improve

This is a key part of a warning letter for poor performance. You generally want to be firm but not aggressive.

Typical wording might explain that if the employee does not meet the required standard within the timeframe, further disciplinary action may be taken, which could include a further written warning or termination of employment.

Be careful not to “pre-decide” termination. You’re setting expectations and outlining potential consequences, not guaranteeing an outcome.

8. Invitation To Respond And Acknowledgement

Give the employee a chance to respond in writing if they wish, and ask them to sign an acknowledgement of receipt (not necessarily agreement).

If the employee refuses to sign, you can note that the letter was provided and the employee declined to sign, and keep a record of when and how it was delivered.

First Warning Letter For Poor Performance: A Simple Structure You Can Use

If you’re issuing a first warning letter for poor performance, your goal is usually to correct the issue early and clearly, without escalating things unnecessarily.

A practical structure looks like this:

• Opening: confirm the letter is a first written warning and reference the meeting where the issue was discussed
• Performance concerns: list 2–4 specific concerns with examples
• Expected standard: explain what is required, using measurable language
• Support: outline the training/check-ins/tools you will provide
• Timeframe: set a review date and what “success” looks like
• Consequences: explain what may happen if performance does not improve
• Close: invite questions, confirm next meeting date, and request acknowledgement

As a small business owner, it can be tempting to write a warning letter in the heat of the moment - especially if you’re frustrated. But it’s usually worth drafting it calmly, sticking to facts, and keeping the tone professional. That approach tends to get better results and reduces the risk of the letter being interpreted as unfair or punitive.

A Quick Note On Consistency

Try to be consistent across your team. If one employee receives formal warnings for repeated errors, but another employee is treated informally for the same problem, it can create conflict and increase legal risk.

This is where having clear documentation and consistent processes helps - including tailored Employment Contract terms and workplace policies that match how your business actually operates.

Common Mistakes Employers Make (And How To Avoid Them)

In our experience, warning letters can backfire when they’re rushed, vague, or not supported by a fair process. Here are some common traps - and what to do instead.

Being Too Vague

Mistake: “Your performance has been unsatisfactory. You need to improve.”

Better approach: specify what tasks are below standard, provide examples, and explain what improvement looks like.

Including Personal Criticisms Or Emotional Language

Mistake: wording that sounds like an attack (“you don’t care”, “you’re lazy”, “you’re a problem”).

Better approach: focus on work outputs and expectations (“the weekly report was not submitted by the deadline on three occasions”).

Setting Unrealistic Improvement Timeframes

Mistake: expecting a full turnaround in a few days when training is needed, or when targets are long-cycle.

Better approach: choose a timeframe that reflects the work and the support you can offer.

Not Offering Any Support

Mistake: using warnings purely as a disciplinary tool, without training or guidance.

Better approach: include coaching and check-ins so the employee has a genuine chance to improve.

Skipping The Meeting And “Emailing A Warning Out Of The Blue”

Mistake: sending a warning letter without discussing concerns with the employee first.

Better approach: meet, explain, listen, then document in writing.

Using A Warning Letter As A Substitute For Good Contracts And Policies

Sometimes the performance issue is a symptom of unclear systems, unclear role scope, or inconsistent instructions.

If you find you’re frequently needing warning letters, it may be a sign you need to tighten your employment documentation, onboarding, and workplace policies. Depending on your business, this might include a clearer employment contract, job description, and policies around performance expectations.

Key Takeaways

• A warning letter to employee for poor performance helps you clearly document issues, set expectations, and give the employee a fair chance to improve.
• Poor performance is different from misconduct - and the right process and letter will depend on what the issue actually is.
• Before issuing a warning letter, it’s usually best practice to meet with the employee, explain the concerns with evidence, and let them respond.
• A strong first warning letter for poor performance should be specific, include support and timeframes, and clearly outline what may happen if there’s no improvement.
• Consistency matters - treating similar issues differently across employees can create conflict and increase legal risk.
• Keeping your employment documentation up to date (including an Employment Contract and clear workplace processes) makes performance management much easier.

If you’d like help drafting a warning letter to employee for poor performance, or putting a practical performance management process in place, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.