The probationary period is an excellent opportunity to create a long-term relationship of an organization with its new hires. This is also a delicate period in which new hires are susceptible to turnover. A study reveals that, on average, a company loses 17% of its new hires. A well-developed onboarding process that creates a support system enabling them to perform better would lead to higher retention amongst the new joiners.

What is a probationary period?

What is Probationary 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 employee evaluation may be designed 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 probation period.

If the employee fails to perform as per set organizational standards, the probation period would be extended at the manager’s discretion to improve the performance and retain the employee.

The notice period can be extended more than once at the manager’s discretion. Usually, companies are silent on the number of times probation can be extended. If the employee performs well, they would be confirmed, but if they fail to meet the organization’s expectations repeatedly, then the dismissal of the services would be initiated.

Benefits of Probation

During the probation 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 probation 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 probation 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 probation 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 probationary 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.

  • Organizations may also introduce leaves such as bereavement leave and compensatory-off, which could be granted during a probation period.
  • Some companies allow one leave per month to probationers.
  • Others allow the leaves to accumulate as per company policy until the end of the probation 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 probation 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.

The notice period

The notice period clause is often influenced by an organization’s values, culture, and business requirements. 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 cases where there is a month of the notice period, if organizations ask an employee to leave without serving the notice period, they would be entitled to a month’s pay in his final due settlement.

Probation period process

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