Probationary Periods for New Employees (With Example Policy)

According to the Bureau of Labor Statistics, 6.1 million hires happened in April 2021. If your company is hiring, having a solid onboarding process and associated policies in place helps ease the transition. Having a 90-day probationary period gives you a chance to test out new employees, whether it’s your first hire or your 100th. Learn how a new hire probationary period works and how to create a probation policy for your company.

 

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What is a probationary period for new employees?

A new hire probationary period is a defined period from hiring until the new hire is considered a permanent employee. A common timeframe is a 90-day probationary period, but you can make it as long or short as you want. It’s similar to a trial period where the employee 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 until after the probationary period or pay a lower wage during this period. It can also be called an orientation, training, initiation or introductory period.

 

During the probationary arrangement, the employee typically gets lots of feedback, training and support to help them succeed. The supervisor evaluates performance to decide if the employee is a good fit for the organization or can be trained to improve if the performance is lacking. In an at-will position, the employee can be terminated even after the 90-day probationary period, so it’s not always necessary to put new employees on probation.

 

Pros and cons of a probation period for employees

Establishing a probation period for employees can be beneficial in many ways, but it also has some drawbacks.

 

Pros of a probationary period

The pros include:

  • Support: A new hire gets lots of 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.
  • Temporary collective bargaining reprieve: If your employees are part of a union, using a probationary period can allow you to try out a new employee without dealing with collective bargaining policies. You can often terminate the employee without cause even if you normally need cause to terminate permanent employees.
  • Improved effort: Knowing that 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, 90 days or longer can turn away some candidates who can’t go without coverage.
  • Testing the fit: A probationary period gives both the employee and employer a chance to see if the relationship is a good fit. There might be less pressure for an employee to stay if they don’t feel the environment is a good fit for them.

Cons of a probationary period

The cons include:

  • False sense of security: Employees might feel like they can’t be fired once they successfully complete the probationary period, which isn’t true. At-will employees can be terminated at any time for any reason. Make this clear in your probationary period policy.
  • Negative stigma: Calling it a probationary period can have a negative connotation for new employees. They might feel on edge or worry that they’re on thin ice. Renaming it to an orientation period or another friendlier name can help.
  • No real difference: In most cases, there isn’t any difference in employment status between the probationary period and permanent employee status. The exception is a collective bargaining situation. Because there’s no difference, the probationary period is often unnecessary.
  • Candidate resistance: 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 can decrease your talent pool when you hire.

When are probationary periods mandatory?

In most cases, probationary periods are not mandatory unless you decide all new hires must go through one. There are no federal laws requiring a probation period for employees.

 

Montana is the one state that requires probationary periods because it’s not an at-will employment state. Montana state laws specify that a new hire’s probationary hire lasts 6 months from the date of hire if the employer doesn’t set a specific probationary period.

 

Tips for successfully using probationary periods

Implement a probationary period successfully with these tips.

 

Consult a legal expert

When drafting a probationary period policy, consult with your legal counsel to ensure its validity and compliance with all applicable laws. Using a template is a good start, but it needs a final review from your legal counsel to ensure your company is protected.

 

Apply it consistently

Once you establish your policy for probationary periods, implement it consistently with all employees. You could face accusations of unfair treatment if you only enforce the probationary period with some employees. Using this training period for all new hires ensures everyone gets a good start to employment with the support and training they need to succeed.

 

Go heavy on training

A probationary period shouldn’t be a way to hold off benefits or terminate employees without giving them a chance. Build a robust onboarding program with strategic training and ongoing support for new hires. Schedule regular feedback at least weekly to keep them updated on how they’re doing and how they can improve. The goal is for both parties to enjoy a successful start, and training is a key part of that.

 

Make it positive

Some employees don’t like the idea of a probationary period. It makes them feel you don’t trust your employees, or it puts a lot of pressure on them to perform. Emphasize that the probationary period is a learning time and that it’s designed to help the new hire. Maintain a positive tone to the probationary period to help ease concerns and get the best performance from new hires.

 

Take action before the period ends

While you can terminate at-will employees even after the probationary period, it’s best to make your decision before the period ends. If you know the employee isn’t going to work, terminate the employee before the probationary period ends. If you feel the employee needs a longer probationary period, inform them of the extension as soon as possible. Avoid waiting until the period is almost over.

 

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 employee, the new hire may leave the position at any time without cause. Sloan Advertising also has the right to terminate any employee with or without cause at any time.

 

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 our standards and 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 is granted permanent employee status. Completing this probationary period does not guarantee continued employment with Sloan Advertising. Employment is at-will and can be terminated at any time with or without cause. The employee is subject to all company policies and procedures.

 

After the probationary period, the new employee is granted all of the normal and customary benefits offered to regular full-time employees per the employee handbook. This includes:

  • Health, dental and disability insurance [list any other insurance options you offer]
  • Vacation time, sick leave and additional paid time off per the handbook [list specific time off benefits you offer]
  • [List additional benefits offered to your full-time employees]

FAQs about probationary periods

Below are common questions about employee 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 included in your policies and procedures to ensure that all new hires understand this possibility.

 

Can an employee be terminated during the probation period?

A new hire can be terminated during the probationary period. The employer doesn’t need a reason to fire the employee. Most jobs are at-will anyway, though, which means the employer can terminate them for any reason even after the probation period for employees.

 

Do probationary employees have rights?

Legally, there’s not much difference between a probationary employee and a permanent employee. A probationary employee still has the same rights as the other employees at your company. An employee in a union job might not be able to use the grievance procedures through the union during the probationary period. The new hire in the union position can be terminated during the probation.

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