What is Probation Period? | Meaning & Definition | Akrivia HCM

What is a probation period?

The probation period is a limited period; usually, three to six months, defined under an employment contract which allows both parties – employer and employee to assess their work relationship for the long term.

They may assess various parameters such as cultural fit, job quality, job performance, support, etc. This period allows both employer and employee to gauge overall fitment and lay the foundation for a long-term relationship.

Importance of probation period - performance evaluation

The best organizations create a sound support system around a new hire to teach cultural fitment, adopt values, assign mentors for guidance, make resources available for job performance, and regular feedback meetings by managers for appreciation, improvements, etc. It’s famously said – People join companies but leave managers. The managers also need to be sensitized to new hire requirements and give impetus to grooming – nurturing their enthusiasm and honoring skills for a better career path.

The company may design the employee evaluation for formal performance review meetings once every two months. However, a weekly informal assessment by the reporting manager/assigned mentor would be advisable to keep new hires on track consistently with the work ethics of the organization.

If the performance meets the accepted criteria, then an employee is confirmed with additional perks and applicable benefits at the end of the probationary period.

If the employee fails to perform as per the organizational standards, the manager may extend the probation period at discretion to improve the performance and retain the employee.

A manager can extend a probationary period more than once at his or her discretion. If the employee fails to meet the organization’s expectations repeatedly, the manager will initiate dismissal of the employee’s services.

Benefits of Probation

During the probationary period, a well-developed onboarding process would benefit organizations to retain high performers, develop cultural ethos in the next generation of employees, and save on costs.

• Provides a framework of ‘No strings attached’ opportunity for mutual assessment.
• A well-supported probation period for new hires would have high retention and reduce employee turnover.
• Increased employee engagement and productivity.
• Low hiring costs.

How long should a probationary period last?

The probation periods may vary from industry to job role, depending on the organization and industry practices. Usual industry practice has offered a probationary period range of three to six months. However, due to job complexities, high level of training requirements, etc., companies may also offer probation for up to one year as mutually agreed-upon contractual terms. However, organizations may choose to end your probation period early based on your excellent performance.

Compensation during probation

The CTC offered during a probationary period may not include some components of compensation, perks, and benefits. It may reduce your take-home salary. In the case of BPOs, night allowance is not provided to employees during the training period. Benefits such as medical insurance, stock options, etc., may be provided only after becoming a permanent employee. The employee would get entitled to perks and benefits when they complete the probation period successfully and then get confirmed for employment.

Leaves during probation

The policy of leaves vastly differs within organizations. The grant of leaves depends upon a policy influenced by its company culture and values.

• During a probation period, organizations can introduce leaves such as bereavement leave and compensatory–off which can be granted.
• Some companies allow one leave per month to probationers.
• Others allow the leaves to accumulate as per company policy until the end of the probationary period. If the services are confirmed, those leaves are credited to the employee’s leave balance.
• Some companies strictly maintain a policy of no leaves during the probation period. In such a case, an employee can request his HR/reporting manager to extend their probationary period by the number of leaves they have taken. These discretionary powers are sometimes bestowed upon managers to be initiated.
• The exception to the rule would be maternity leave. If an employee has completed 80 days of working during her probation period, then the person would be eligible for maternity leave.

Notice Period during probation

The attitude of organizations should evolve from considering probation as a mere trial period and an easy legal cover for dismissal to developing new hires for long-term business roles. They should move away from the perspective of caution to confidence. The companies should consider the probationary period as an opportunity to provide the best skill training, inculcate values, build upon their strengths and nurture their talent. The end goal should always be to build a culturally aligned performing workforce with sufficient support systems and career paths. If the organizations feel confident about a new hire for a particular role, they may well consider doing away with the probation period.

Notice period clauses

An organization’s values, culture, and business requirements often influence the notice period clause. Organizations may choose to insert the following nature of the notice period clauses in the contract agreement:

• Termination of employment with immediate effect based on disciplinary procedures/performance issues
• Discretionary powers of managers to waive off notice period partially or fully (not part of the contract)

In case, if an employee is asked to leave without serving the notice period, they would be entitled to a month’s pay in his final due settlement.