Probationary Period: Definition, Purpose, and Best Practices

What Is a Probationary Period? 

A probationary period is a set time frame dedicated to training and assimilating a new hire. This period typically lasts between 30 days and six months, depending on the complexity of the role.  For more complex positions, a longer probationary period is often requiredDuring this time, both the employer and the employee are likely exempt from contractual obligations. For instance, at any point during the probationary period, the employee can be terminated with little or no notice, and the employee can also choose to leave in the same manner. 

Probationary periods may apply to new hires, employees promoted to new roles, or those transitioning due to performance-related issues.

What Is the Purpose of a Probationary Period? 

A probationary period provides employers the opportunity to evaluate a new hire’s ability to perform their job responsibilities effectively. Employers can assess whether the individual aligns with the company's workplace culture and team dynamics.

Employees also benefit from a probationary period, gaining firsthand experience of the role and the organization. This period allows employees to determine if the position aligns with their career goals and whether they are a good fit within the company’s culture. Through conversations with colleagues, new hires can gain insight into the company’s values, long-term opportunities, and day-to-day dynamics.

This mutual assessment period can lead to better long-term retention rates by ensuring a strong fit for both parties.

How To Structure a Probationary Period

When implementing a probationary period, employers must set clear performance goals that guide the new hire’s progression. These goals should focus on three key components: learning, independence, and assimilation.

Learning. Assess the new employee’s ability to retain the information provided during training. Set a timeline for when they are expected to master specific skills or tasks. 

*Ensure the onboarding process is robust, with a checklist detailing what the employee should accomplish during the probationary period.

Independence. Evaluate the frequency and type of questions asked by the employee. Are they demonstrating problem-solving skills and self-reliance, or relying too heavily on guidance?

Assimilation. Determine if the new hire fits within the company’s culture and team. While not every employee needs to become best friends with their colleagues, positive team dynamics and effective communication are essential.

Transition From Probationary Period to Employment 

Once the probationary period comes to an end, there are two possible outcomes. 

1. Regular Employment.

   If both the employer and the employee are satisfied with how the probationary period went, then the employer would offer the employee a permanent position. Sometimes, an employee may be given more money after the probationary period is over, either as a raise or a bonus. During this transition, there will likely be a contract to sign with additional parameters. 

2. Termination of Employment 

   If the employer or the employee do not feel satisfied with the results of the probationary period, then either can make the decision to part ways. Keep in mind that termination can occur at any time during the probationary period, by either the employee or the employer.

    

FAQs About Probationary Periods

What happens if a probationary period is extended?

Extensions may occur if the employee requires additional time to meet performance goals. Clear communication is essential to set expectations during this extended period.

Are probationary periods legally binding?

While probationary periods are common, employers must ensure they comply with local labor laws to avoid legal risks.

Should small businesses use probationary periods?

For small businesses, probationary periods can help mitigate the risks associated with hiring by ensuring a new hire is the right fit before a long-term commitment is made.

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