What Is a New Hire Probationary Period and Why Have Them?

There are certain times in an employment relationship where, as a business owner, you need to evaluate whether your employee is the right fit for their role—like when they’re first hired, when they’re promoted to a new position, or when they’re struggling with their performance.

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And if you want to help your employees effectively navigate those times—and show that they are, in fact, the right person for the job—you need to set clear expectations. And one way to do that? Having a probation period at work.

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Probationary periods set clear guidelines around what you expect from your employee—and what they need to do in order to secure their role after the probationary period ends. 

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But what, exactly, is a probation period at work? How do you decide if these periods are the right fit for your business and employees? And if you decide they’re the right fit, how can you implement them effectively?

What Is a Probation Period at Work?

A probationary period is a specific time period when an employee is under evaluation. There are a few different situations where you, as a small business owner, might consider putting an employee on probation, including when:

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• Training, onboarding, and evaluating new hires to determine if they’re a good fit
• Evaluating current employees who are up for promotion
• Training existing or recently promoted employees for a new job (like management)
• Disciplining or correcting employees for performance or behavior issues

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During the period of probation, you would clearly outline what you expect from the employee and how you’ll measure and/or evaluate how they meet (or don’t meet) those expectations. 

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Then, at the end of the probation period at work, you can review an employee’s behavior and work performance, provide guidance and feedback, and decide if the employee has fulfilled the requirements of the probation—and, if so, if you want to move forward with their employment.

Why Would an Employer Use a Probation Period at Work?

Now that you know what a probation period at work is, let’s quickly cover why an employer might consider using one—and why they might forgo one. 

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First, let’s look at the positives.

Pros

• See if an employee is a good fit: You get a specific time frame to test out an employee and make sure they’re a fit before making a more long-term investment in their employment with your company (for example, by investing in training or learning and development opportunities). And from the employee’s perspective, it offers the same opportunity; they can “test drive” the opportunity during the probation period—and ultimately decide whether they want to pursue the role within the company.
• Drives performance: During a period of probation, employees know that, in many ways, they’re under the microscope. This external pressure can drive performance, helping your employee excel and step into their full potential.
• Reduces the cost of benefits: While new employees are covered by the Fair Labor Standards Act (FLSA)—which includes anti-discrimination and minimum wage laws—they don’t need to be covered by other company benefits until the end of their probation. For example, under the Affordable Care Act (ACA), employers are allowed a 90-day waiting period before they must enroll eligible employees in the company’s group health insurance plan. That said, the ACA allows for probationary periods of up to one month before the waiting period begins. Additionally, you’re often able to limit eligibility for other benefits, like paid time off and sick leave, until the end of a waiting period—which means you can save on premiums during that time frame—and not get stuck shelling out a bunch of premium payments for employees that don’t make it through the probationary period.
• Prevent contracts from locking in an employee right away: Since at-will employment is the norm in all 50 states, including California (though Montana limits it to probationary periods), an employee can quit or be fired at any time and without cause. However, collective bargaining agreements and certain employment contracts (written or, in some states, implied) can create exemptions for at-will employment, specifying that employees can’t be fired at will (except in certain situations, like theft or harassment). What does that have to do with probation? These probationary periods create a time frame where, as an employer, you can dismiss an employee (for example, if they’re not hitting performance metrics) before they’re covered by the full force of said agreements or contracts. Basically, establishing a probationary period gives you an out to fire an employee for any reason—even if they aren’t subject to at-will employment.

Cons

• Employees might feel underappreciated: Putting an employee on probation—whether new or existing—can be demoralizing, with the employee in question potentially feeling as if their skill set or work experience is being judged. Similarly, some employees might feel that probation for disciplinary reasons is unnecessary—which could lead to potential feelings of resentment.
• Can drive away talent: Using the term “probation” can carry a negative stigma, especially for new talent or current employees looking to prove themselves and climb the ladder. Additionally, the prospect of working for a period of time before benefits kick in can make an otherwise appealing job offer fall flat, which can make it harder to find top talent.
• Potential for legal risk: Employees who successfully complete a probationary period might (incorrectly) assume that they can no longer be fired for performance reasons—and if you do ultimately have to fire them, they could try to take legal action against you for unfair dismissal. Dealing with the fallout, even if the lawsuit fizzles out, could cost you time, energy, and resources.

Things To Consider When Creating a Probationary Period Policy

You know what a period of probation is. You know why you might consider using one. But what, exactly, goes into creating a probation policy for your business?

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There are a few different factors you’ll want to consider when creating your policy to ensure it’s the best, most effective fit (for your business and your employees), including:

The Length of the Probationary Period

While most notice periods last anywhere between 30 and 90 days, there’s no universal rule for how long probation should last. Instead, consider what makes the most sense for your business, your team, and the situation at hand. This includes considering:

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• The position: The position you’re creating a probation policy for can play a role in how long that period should be. For example, you might decide that 30 days is enough time for a new cashier or receptionist—but you might want a longer time frame, like 90 days, for any employees that are being promoted to management.
• The type of employee: Another factor you may want to consider when determining the length of the probationary period? The type of employee that would be on probation. For example, if you have a part-time employee that works two days per week, it might take you longer to get a sense of whether they’re the right fit than an employee that’s working full-time—and, as such, you might want a longer period of probation for part-time employees vs. full-time employees.
• The type of probation: Different kinds of probation may also call for different time frames. For example, you might want a longer period for brand new hires vs. existing employees that are on probation for a performance issue (like excessive absenteeism). 

When to Use Probationary Periods

Just because you decide you want to use probationary periods in your business doesn’t necessarily mean you have to implement every type. When creating your policy, decide which types make the most sense for your company—and when it makes the most sense to use them. For example, you might opt for an introductory period for new hires and promoted employees—but choose to skip performance-based probationary periods and, instead, deal with performance issues in other ways (like offering additional training).

Pass/Fail Criteria and Metrics

As mentioned, probation periods allow you to decide whether an employee is a good fit for their role and your company. But in order to make that determination, you need to clearly define how you’re going to judge whether they’re a good fit—and whether they pass their probation (and move forward with the company) or fail (and get dismissed).

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Develop concrete requirements that an employee needs to meet by the end of the probationary period. This can include goals like completing orientation and training, showing up to work on time for the duration of probation, or passing a skills assessment to ensure they’re qualified for their role.

Dismissal Procedures

Part of developing a probation period policy is defining what would be considered a violation of that policy. Make sure to clearly define what behaviors or actions during the probationary period will be considered grounds for dismissal (for example, getting written up by a supervisor or having a no-call, no-show).

Best Practices for Creating a Probation Policy

An employee probationary period can help you make sure the people on your team are the right fit, both for their roles and your company—but only if you have an effective policy.

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So how, exactly, do you create an effective policy? Some best practices to keep in mind include:

Set Clear Expectations

When it comes to writing a probation policy (or any policy, really), the clearer you are, the more successful it will be. Specify how long any trial period lasts and what employee performance metrics will be measured to determine if they pass or fail their probation. 

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Be clear on what your employees can expect throughout the probation process (for example, outlining meetings they’ll have with their supervisor at key intervals or any training they’ll be required to complete) as well as any employment rights they’re entitled to (for example, that an employee who is dismissed during probation may still be able to collect unemployment insurance).

Support Probationary Employees

You want your employees to successfully navigate probation—and that means supporting them through the process. And a great way to provide support? Holding regular performance reviews. This gives you—and them—an opportunity to address any problem areas, go over progress toward shared goals and expectations, and make sure they’re on the path to successfully completing their probation.

Document the Employee Probationary Period

Documenting your probationary processes is a must. That way, if there’s ever a discrepancy in the future (for example, an employee saying you fired them for no reason), you have a paper trail to protect you. 

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In addition to including information about probation in your employee handbook (and requiring a sign-off that acknowledges an employee received it), document meetings you or human resources have had about a probationary employee’s progress and any feedback they’ve been given. 

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Additionally, keep any records that are relevant to the probation. For example, if an employee is on probation for excessive tardiness, keep a record of any late clock-ins during probation.

Make a Decision Before the End of the Probationary Period

The point of a probation period at work is to determine whether you want to move forward with an employee. When a trial period ends, conduct a performance review to determine if the employee met the goals you laid out at the beginning. For example:

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• Did a new team member demonstrate that they’re a good fit for your company?
• Did an employee who’s up for promotion display enough competency to move into the new role?
• Did an employee who’s on probation for disciplinary reasons correct their unacceptable behavior?
• Should probation be extended for another period of time (for example, for an employee who hasn’t met your expectations, but is demonstrating improvement?

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Once you’ve made your decision, meet with the employee and human resources to explain your reasoning. If you’re keeping the employee on the team, be clear that even though their probationary period is over, they can still be dismissed in the future. 

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And if the employee failed their probation? Back up your decision with the evidence you put together throughout the trial period to potentially avoid any legal issues.

Work Probationary Period FAQs

Still have some questions about probation periods at work? Let’s look at these frequently asked questions.

Is It Common to Get Fired During an Employee Probation Period?

It’s generally uncommon to get fired during probation because it’s expensive to hire and train employees (since an employer has already made a significant investment in that worker). Following the terms of your probation—for example, by showing up to work and meeting your employer’s expectations—should help you avoid being fired during your trial.

What Does a 90-Day Probation Period Mean?

A 90-day probationary period means an employee’s trial period lasts for 90 days. At the end of the 90-day period, the employer will make a decision about your employment relationship and decide whether to keep you, dismiss you, or extend your probation.

Is It Bad to Call Out of Work During a Probation Period?

Yes, since employees who are on probation are under extra scrutiny, calling out for reasons that aren’t an emergency may damage your chances of getting hired, promoted, or otherwise reaching the goal you’re aiming for.

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What’s more, the terms of your probation period may specify that calling out during your trial is grounds for dismissal. 

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If you’re unsure, consult your employer’s policy to learn the specifics about what’s expected from you.

Probationary Periods at Work Can Be Effective—If Used Wisely

Probation can be an effective tool for making decisions about what employees you want to keep with your company—and which employees you need to let go. 

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And now that you understand how to create a probation policy that works for you and your team, you’re armed with the information you need to use probationary periods to refine your workforce and build the team you need to take your business to the next level.