on August 31, 2016 Human Capital Management

How Do Introductory Periods Work?

Common customer question #12 What is an introductory period and how does it work? An introductory period is a period of time put in place for an employer and a new employee to evaluate each other and determine if the employment relationship is a good fit. Adequate human capital management in the first few weeks of a new hire is critical to employee success.

A dog and owner shake hands Courtesy of Crystal Moon on Flickr under CC
For employers who have an introductory period, we recommend using the time to provide thorough onboarding, enhanced training, and extra coaching. It’s also a good idea to have a review at the end of the period to discuss how the first few months went and what your mutual goals are for the employee’s continuing employment. However, if there are any performance issues, we recommend addressing them as they occur rather than waiting until the end of the introductory period.

Employers typically set their introductory periods at 60 or 90 days and often make their employees eligible for benefits following its completion. Note that employees who will be eligible for health insurance with your organization would need to have access to that insurance by their 90th day of employment, regardless of the length of the introductory period. 

An employee who is performing poorly may be let go during the introductory period or at the end of the introductory period. Or, if the employee’s performance is "on the line," they could be given a performance improvement plan at the end of the introductory period with strict expectations about what improvements are needed to remain employed. However, it’s best not to extend the introductory period. Doing so could appear discriminatory. 

It is important to know that the introductory period generally has no additional legal protections for either the employer or the employee. It doesn’t change the at-will relationship or allow employers to terminate employees for discriminatory or other illegal reasons. Regardless of how long someone has been employed, it’s always a best practice to ensure that any performance or disciplinary issues are well documented prior to letting them go.

As a final note, we strongly recommend against calling this time a “probationary period.” Courts have ruled this term jeopardizes the at-will employment relationship because it implies a change in the employment relationship once the probationary period has come to an end and may infer that these employees have additional employment rights.

Paul Hardin

Paul Hardin is President of Moulton & Hardin, Inc. As an expert in both Employee Benefits and Workforce Management, Paul studies the relationship between all aspects of Human Capital Management, with an emphasis on Benefits Management, ACA, and how an HCM platform is invaluable for employers.

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