What is a probationary period for new employees?
A new hire probationary period is a predetermined timeframe that starts on the employee’s date of hire and concludes at the end of the period. For example, many companies use a 90-day probationary period that begins on the employer’s first day of work and ends exactly 90 days later. However, employers are typically free to determine the length of their probationary periods or choose not to have one at all. One of the only exceptions to this rule is employers in Montana, where probationary periods are required.
A work probationary period is similar to a trial period when the new hire is learning the basics of the job and the employer is deciding if the employee is going to work out for the company. Some companies delay health insurance and other benefits or pay a lower wage until after the probationary period. Some employers also refer to this timeframe as an orientation, training, initiation or introductory period.
Are probationary periods mandatory?
There are no federal laws requiring a probation period for employees. Additionally, most states also have no probationary employment requirements. As mentioned above, Montana is one of the only states that require new hire probationary periods. The benefit for employers is that even though Montana is not an at-will employment state, employers can terminate employment within this probationary period without providing just cause.
Pros and cons of probationary periods at work
As with most business practices, there are both pros and cons to establishing a probation period for employees.
Pros of a probationary period
- Supportive transition: A new hire receives initial support to help them become a successful addition to the team. They should get regular feedback and ongoing training to help them in their new position.
- Improved effort: Knowing they’re in a probationary period can push new hires to put forth their best effort.
- Reduction in benefits costs: If you reduce pay or delay offering benefits until the probationary period is over, you can save money on your new hires. However, not having benefits for 60 days or longer could deter some candidates who can’t go without coverage.
- Determining job fit: A probationary period gives both the employee and employer a chance to see if the relationship is a good fit. This factor, in turn, can help to improve retention rates.
Cons of a probationary period
- New worker confusion: Probationary periods can confuse new hires by making them believe they can’t be fired after they successfully complete the probationary period. You can avoid this confusion by setting up clear policies that explain both the probationary period and employee termination process.
- Negative stigma: Calling it a probationary period can have a negative connotation for some new employees. They might feel on edge or worry they’re on thin ice. Renaming it to an orientation period, initiation or training period can help ease this stress.
- Hinder hiring efforts: Some job seekers might avoid applying for a job with a probationary period. They might see it as a sign that the company doesn’t trust their employees or that they’re trying to avoid offering benefits. This practice may reduce the number of qualified candidates in your talent pool.
Tips for successfully using probationary periods
If your company determines that having a new employee probationary period is its best option, it’s important to have a clear probationary agreement and set policies in place. Here’s a list of best practices for building probation period policies for new hires.
Consult legal experts
When drafting a probationary period policy, it’s crucial that you start by consulting with your legal team or outside counsel. This step ensures you understand any legal limitations of a probationary policy as well as what, if any, legal responsibilities the company has. It’s also important to have your legal team or outside counsel review the final copy of your probationary agreement and corresponding policies to ensure overall compliance.
Maintain consistency
Consistent implementation of any workplace probationary period is extremely important. Not only can inconsistent policies cause division among your workers, but they can also cause legal issues. If employees make accusations of unfair treatment, it could damage your company’s reputation or entice one or more employees to seek legal action. On the other hand, requiring consistency makes everyone feel like a valued part of the team and can drive improved hiring and retention rates.
Make employee training a key element
A probationary period should focus on equipping new hires with the skills they need to be successful on the job. Any probationary period should include a robust onboarding process that includes strategic training and ongoing support for new hires.
Offer frequent feedback
Frequent feedback is a critical component of any successful employee probationary period. New hires should understand what they’re doing right and have the opportunity to correct any negative feedback. Be sure to schedule regular feedback at least once a week to keep new hires updated on how they’re doing and how they can improve.
Act before the period ends
The primary goal of an employee probationary period is to determine if the new hire is a good fit for the company and the role. The last thing you want to do is allow the probationary period to end without addressing issues. This is the time to take action, such as extending the probationary period, switching the new hire to a new role or department or, if necessary, terminating employment.
Example 90-day probationary period policy
New employees working for Sloan Advertising go through a 90-day probationary period upon starting with the company. As an at-will employer, the company has the right to fire the new hire at any time without cause and likewise, the employee has the freedom to terminate employment during this timeframe.
New hires receive the following during the probationary period:
- Extensive training and support from their supervisor
- Weekly check-ins with the supervisor to receive feedback
- Support for improving performance to meet expectations
- A copy of all company policies and procedures
- A written performance evaluation at the end of the probationary period
Upon successful completion of the probationary period, the new hire transitions to permanent employee status. Completing this probationary period does not guarantee continued employment with Sloan Advertising. Employment is at-will, and the new hire can be fired at any time with or without cause. The employee is subject to all company policies and procedures.
After the probationary period, the new employee has access to all company benefits offered to regular full-time employees, per the company’s employee handbook. This includes:
- Health, dental and disability insurance [Your company can list any other insurance options.]
- Vacation time, sick leave and additional paid time off per the handbook [List the specific time off benefits you offer.]
- [List additional benefits offered to your full-time employees.]
FAQs about probationary periods
Can I extend an employee’s probationary period?
You can extend the initial probation period for employees if you feel you need a little more time to evaluate them. The option to extend the probationary period should be set in your company policies and the probationary agreement. The only exception is employers in Montana, who are limited to an 18-month probationary period.
Can I terminate an employee during the probation period?
You absolutely have the right to fire a new hire during the probationary period. In fact, the main purpose of this type of work probationary period is to make sure the new hire is a good fit for the role. In many cases, employers are able to fire a new employee during the probation period even without cause. This is true even for many states that do not have at-will employment laws. However, you are still required to follow all federal, state and local labor laws.
What is the most common probation period for new hires?
A 90-day probation period is the most common type of probation period used by employers. However, it’s not uncommon to see shorter timeframes, such as 30 or 60-day probation periods as well as longer periods ranging from 6 to 12 months.
What is a probationary period’s main purpose?
The primary purpose of a work probationary period is to give both employers and new hires the opportunity to make sure the job is a good fit. It’s also used to give new hires an opportunity to receive proper training before they’re expected to meet certain standards, such as sales or production goals.
