Misconduct v Performance: What’s the Difference?

You’ve seen it before. A manager complains about an employee who misses multiple deadlines and shows poor initiative. He wants them “dealt with”. But is the employee incapable or insubordinate? HR and IR professionals often find themselves walking a tightrope trying to determine whether an issue is one of underperformance or outright misconduct. Your role in drawing the line between performance and misconduct is both strategic and legal. In Malaysia, the line between the two can be subtle yet the consequences of misjudging it can be significant.

Getting this distinction right isn’t just about ticking the right procedural boxes. It’s about ensuring fairness, preserving morale and protecting the organization from costly missteps. When lines blur, assumptions can lead to action that’s either too harsh or too lenient. So how can HR and IR professionals confidently tell the difference? Below, we break down 3 practical ways to distinguish between a performance issue and misconduct.

1. Breach of Policy or Failure to Meet Expectations?

   
   

   The first and often most telling difference between performance issues and misconduct is by identifying what standard has been broken, a formal rule or a performance expectation. Misconduct involves a clear breach of company policies, the code of conduct or contractual terms. Performance issues are about the employee’s inability to meet established job expectations according to the employee’s role in the organization. Generally, when a formal rule or policy has been knowingly violated, the matter leans more towards misconduct than poor performance.
   

2. Nature of the Issue: Inability or Wilful Behaviour?

   
   

   Another distinction between performance issues and misconduct lies in the underlying cause of the behaviour. Understanding whether an employee is struggling due a lack of ability or is acting out of choice is crucial. A performance issue arises from the employee’s inability to meet job expectations despite genuine effort. This usually stems from lack of ability, skill or understanding. The employee is trying to perform but is failing short. Misconduct on the other hand involves willful and deliberate behavior that breaches company rules or accepted standards of conduct.

   
   

3. Evidence Trail: Objective Assessment vs Breach of Policies

   
   

   Another way to differentiate between performance issues and misconduct is by examining the type of evidence available. Performance concerns are usually identified through patterns over time- such as poor appraisal ratings, missed KPI’s, negative superior feedback or recurring customer complaints. In contrast, misconduct typically involves a clear breach of company policy or contractual terms and is often supported by tangible evidence like CCTV footage, email correspondence or witness accounts.
   

At first glance, it’s easy to lump all employee issues into the same bucket but taking the time to understand whether you’re dealing with a performance gap or a case of misconduct makes all the difference. When HR and IR professionals approach situations with the right lens, it leads to fairer outcomes, stronger working relationships and fewer headaches down the line. 

Remember, the processes for managing a performance issue or misconduct are fundamentally different. Performance issues typically require coaching, guidance or structured support through a Performance Improvement Plan (PIP), while misconduct requires a disciplinary process which will begin with an investigation and is followed by a show cause letter.

So the next time a complaint lands on your desk, pause and ask: Is this about expectations or rules? Because at the end of the day, performance is assessed against expectations, while misconduct is judged against rules and recognising the difference is key to handling issues the right way, every time.