What Is a Probationary Period? A Guide for Canadian Employers

Hiring a new employee can be exciting, but it carries some inherent risks. Even with a strong interview, excellent references, and an impressive resume, it is possible to discover that the new hire is not the perfect fit for the position or the company culture after they begin working.

This is where a probationary period becomes valuable. It serves as a "trial phase," allowing employers to assess whether their new hire suits the role and aligns with the company's values before making a permanent commitment.

In this overview, we will explore what a probationary period entails, how it functions, and how it can benefit your business while supporting the new employee's successful integration into the team.

What Is a Probationary Period?

A probationary period is typically a defined timeframe, often the first three months of employment, during which a new employee is closely evaluated. This period allows employers to assess various aspects of the employee's performance, including attendance, attitude, and adaptability to the work environment.

It simultaneously allows the employee to determine if the job and the company culture align with their expectations and career goals. This mutual evaluation is designed to create a fair system where both parties can assess compatibility.

At the conclusion of the probationary period, the employer will decide the employee's future with the organization. Options may include confirming the individual in their role, extending the probation period (if company policy permits), or ending the employment relationship if performance expectations have not been met.

Why Is It So Important for Small Businesses?

Large companies can manage a bad hire when hiring, while small businesses often cannot afford such setbacks. The effects of a wrong hire can ripple through your operations, affecting your time management, team dynamics, customer experience, and overall profitability. Implementing a probationary period can be highly beneficial, providing the opportunity to evaluate a new hire's fit without a lengthy commitment.

Here are some key benefits of a probationary period:

Business Protection - It allows you to make an informed hiring decision before committing to the long term.

Support for New Hires – A structured feedback system assists new employees in adjusting to their roles and enhancing their chances of success.

Clarity of Expectations – Clearly defined roles and expectations from the outset ensure everyone is aligned from day one.

Facilitated Exits – If the fit is not right, it is often easier and legally safer to part ways during the probation period, minimizing disruptions.

Real Talk: When to Use It

Implementing a probationary period is a strategic approach when hiring a new employee or promoting someone to a significantly different role.

Example

For instance, consider the case of hiring Sam to manage your customer service desk. He appears friendly, intelligent, and performs well during the interview process. However, within the first two weeks, it becomes clear that he struggles with conflict resolution and tends to become defensive when interacting with upset customers. Despite coaching and feedback, his performance has not improved.

Having Sam on probation allows you the flexibility to terminate his employment without the legal complexities that come with a confirmed employee. In contrast, firing a confirmed employee could require a more formal process, which may involve severance pay and a longer notice period. Thus, a probationary period is a valuable tool in managing new hires and ensuring they meet the necessary performance standards.

How to Apply a Probationary Period (the Right Way)

Here's how to make it work:

1. Put it in writing. Use DirectiveHr's Probationary Period Policy -->
2. Include the probationary period in your employment contract and employee handbook. Spell out how long it is (e.g., 3 months), what it covers, and what happens at the end.
3. Check in regularly.
4. Do not wait until month three. Have quick check-ins every 2–4 weeks. Discuss wins, challenges, and whether they are on track.
5. Give clear feedback.
6. Vague comments like "you are doing okay" will not help. Be direct: "You are doing great with response times. Let us work on tone when handling complaints."
7. Document everything.
8. Keep simple notes from your check-ins. If you do need to end the probation, you will have a clear record of why.
9. Be ready to act.
10. If things are not working, do not drag it out. Ending things during probation protects your team and business.

Bonus Tip: Use a Policy Template to Stay Compliant

A well-structured probationary period is essential for its effectiveness, and a written Probationary Period Policy plays a crucial role in this process. This policy helps ensure compliance with employment standards, particularly in provinces like Ontario and provides managers with a clear framework to guide their evaluations. Implementing such a policy can minimize the risk of legal issues and promote fairness in your hiring and assessment processes.

To facilitate this, we offer a downloadable Probationary Period Policy Template. This template is editable, compliant with regulations, and specifically designed for use by small businesses in Canada.

Probationary periods are crucial in hiring, focusing on strategic evaluation rather than skepticism. When implemented effectively, these periods not only safeguard the interests of the business but also provide new employees with an essential opportunity to demonstrate their potential. This approach is one of the most straightforward and effective strategies available to small business owners for developing a cohesive and reliable team, ultimately reducing uncertainty in personnel decisions.