Antony:
Without knowing much of your situation (ie: what the rating is about, how it applies, how the importance is communicated to workers during intake, etc), my thoughts would be these:
1) Employee's shortcomings should be communicated immediately to them. Without knowledge of the specific failings it is hard to expect an employee to improve. New employees, in particular need to have that communicated to them regardless of their performance level, so that they can gauge their activity as it pertains to company expectations.
2) It is good to document an employee's failings and that does add to a company's ability to let them go, should you not operate in an "employment-at-will" environment. That said, it is a good idea to have more than one bad review. Create a history of bad performance - and a history of communicating that to the employee- and the parting of ways will neither be a surprise nor hostile. Communication is the key so that NOTHING is a surprise. Reviews at 3 months, 6 months, and a year are typical (and good) intervals for new employees.
3) If you have to let someone go because they just don't cut it - DO IT! Conventional wisdom holds to the 20-70-10 principle: 20% of your workers will do the majority of the work and be eligible to rise in the company, 70% will do what they have to (with the proper guidance) and will help the company meet production, 10% should be "counseled out of the company" at any given time. Again, though, it should NEVER be a surprise. This is classic Jack Welch. And he's right!!!
Hope that helps. Again I don't know the situation but I wish you luck. Just remember that honesty never hurts.
Regards
Jonathan Scott
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Northeast Athletic Concepts
Sports psychology based consulting for the HR environment
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