There is no dispute that performance evaluation in the modern workplace is not merely a periodic administrative procedure—carried out by management—but rather a key tool for assessing human resources based on numerous factors, including, but not limited to: an employee’s competence in performing their job duties — identifying strengths and weaknesses — and demonstrating the extent to which an employee’s performance aligns with the organization’s goals. The importance of this evaluation increases when poor performance leads to consideration of terminating the employment relationship; in such cases, the matter moves from the managerial realm to a legal one that requires adherence to specific regulations and procedures.
In the Sultanate of Oman, the Labor Law issued by Royal Decree No. (53/2023) established an approach based on balancing the employer’s right to maintain the efficiency of its operations with the employee’s right to a genuine opportunity to address deficiencies in their job performance before a decision to terminate their employment is reached.
In quite a few cases, some private institutions commit a legal error by making an immediate decision to terminate an employee’s employment solely because the employee received a “poor” performance evaluation, which contradicts the Omani legal system and the modern administrative framework adopted by most comparable administrative systems in the modern era—namely, that poor performance should serve as a tool to correct the employee’s career trajectory rather than as grounds for terminating the employment relationship. This process begins with the employer clearly and objectively identifying areas of deficiency and notifying the employee of them in writing, so that the employee can address and correct those issues. It is not sufficient to simply state that the employee’s performance is “below the required standard,” but rather the areas of weakness must be identified and linked to the employee’s duties and job responsibilities, as well as the performance standards established for the position they hold.
Based on this, management is required to develop an appropriate performance improvement plan to move the employee from the evaluation stage to the remediation stage. The performance improvement plan helps the organization move beyond merely identifying the causes of poor performance to actually addressing the deficiencies. Naturally, the plan must include specific improvement goals, measurable indicators, and a clear monitoring and follow-up program, in addition to providing support to the employee by involving them in training workshops and rehabilitation programs to address their job performance.
Of particular importance here is Article 43 of the Omani Labor Law, which establishes a legal framework for addressing situations where an employee fails to meet the required level of competence. This includes notifying the employee of the areas of incompetence and granting them a reasonable period of no less than six months to reach the required level.
The intent of this legal provision is to give the employee an opportunity to address the causes of his or her poor professional performance; however, the same provision grants management the discretion to make the appropriate decision should the employee fail to address those causes, in accordance with the Prophetic Hadith and the legal principle of “no harm and no reciprocated harm.”
While this is intended to protect the employee from the administration’s arbitrary use of its authority, the administration may, in turn, have objective justifications related to an employee’s poor performance; Therefore, the employer must document all stages of the employee’s evaluation process, beginning with the evaluation meeting and the notifications issued to the employee, through the improvement plan and the training and rehabilitation programs it has approved for that employee, up to the results of the monitoring, follow-up, and final evaluation stages.
There is no doubt that reaching this stage must be the result of a comprehensive and clear process, beginning with the assessment, followed by notification, the improvement plan, training, monitoring, and documentation, and culminating in the final evaluation. This is without neglecting the legal procedures stipulated by the Labor Law, in addition to the employer’s obligation to hire a replacement Omani employee for the employee whose employment the employer has terminated.
Ministerial Decision No. (317/2025) has clarified that the evaluation of a worker’s professional performance has financial implications, as it permits the employer to withhold the worker’s periodic allowance if his performance evaluation is rated as “poor,” The legislature’s intent in this prohibition is likely to strike a balance between professional performance and the financial entitlements of Omani workers.
Under Article 22 of the Labor Law, the Omani legislature has required institutions—those with more than 25 employees—to comply with certain regulatory procedures, including the establishment of systems for evaluating employee job performance. The purpose of this is to provide these institutions with a legal and administrative framework characterized by institutional organization.
The Omani legislature has acted wisely by establishing a link that balances professional performance with the worker’s financial compensation, on the one hand, and by providing a system for evaluating worker performance, on the other. This has created a parallel relationship between professional competence and productivity and this compensation —based on an objective evaluation—is determined regardless of the time factor associated with the passage of time.
The real challenge facing human resources departments lies in how to address poor performance before it leads to a decision to terminate employment. Thus, a successful organization is one that has a clear system in place, beginning with the early detection of shortcomings,
based on objective performance criteria, and moves from the initial assessment phase to the phase of developing an appropriate plan to address that performance, with that plan requiring the provision of training, support, and opportunities for improvement, without neglecting documentation at all stages of the employee’s career.
In short, an organization’s adherence to these procedures shifts it from a management style based on evaluation and punishment to an institutional system that achieves two complementary goals: enhancing the organization’s efficiency and ensuring the fairness of personnel decisions.