Managing the performance of employees is becoming increasingly important for organisations struggling in a challenging financial climate. Stuart Lawrenson offers some tips to make dealing with this perennial problem a little easier.
Traditionally, employers have been reluctant to deal with capability issues head on. There are various reasons for this:
- managers’ reluctance to have difficult conversations with under-performing individuals
- a misguided belief that it is ‘kinder’ to encourage someone to retire or to make them redundant than to dismiss them on performance grounds
- an unwillingness to dedicate the time and resources needed to undertake an effective performance management process.
However, in the current financial climate, not only is under performance more visible, organisations can not afford to allow it to go unchecked.
In addition, from October 2011 when the default retirement age of 65 is abolished, it will no longer be the easy option to allow someone to ‘glide’ to retirement: employers may be forced to consider performance-managing older employees out of the organisation.
For these very good reasons, organisations need to have a clear process for dealing with underperforming employees that reduces the legal risk as far as possible and which managers feel confident in implementing.
The basic principles of performance management are not difficult and involve:
- identifying the problem
- explaining the improvements required
- setting a timescale for the improvement
- offering support and training
- reviewing progress regularly
- warning of the consequences of a failure to improve
- keeping a record of the management process.
Generally, the procedure for applying these principles is to try and approach matters informally at first; then, if necessary, to take action under a formal procedure. Remember that an employee will have the right to be accompanied by a work colleague or trade union representative at any meetings held under a formal procedure.
It would not usually be reasonable for an employer to dismiss on capability grounds unless the employee had already been given at least one – ideally two – written warnings.
Top tips for managers
- Raise performance issues early – don’t leave them to pile-up until the yearly appraisal
- However, raising issues in an annual appraisal is better than not raising them at all – an employee will never improve if they have not been told what is expected of them
- Deal with matters informally at first by having a quiet word with the employee. Try to find out if there are any underlying issues (for example, a recent change in personal circumstances) which could be relevant
- Keep notes of all meetings and conversations with employees about their performance so that you have an evidential paper trail should this be necessary further down the line
- Ensure that comments made in file notes are accurate, appropriate and professional, as such documents are likely to be disclosed in any subsequent litigation or if an employee makes a data subject access request under the Data Protection Act 1998
- In formal meetings ask a third party to take a note – having these conversations is difficult enough without having to speak and write at the same time
- Accept that an employee’s performance may sometimes dip for a short period, but make sure you continue to give feedback to help them return to what is required
- Remember that average performance does not equal poor performance. If you want employees to improve their skills, then training and mentoring should be provided
- Do not spend too long dealing with matters informally if it is appears that an improvement is not forthcoming: move to invoking a formal procedure
- The bedrock of a fair procedure, as required by the ACAS Code, is to tell the employee what the problem is, hold a meeting to discuss it (allowing them to be accompanied), decide on appropriate action and give an opportunity to appeal
- You may not have a dedicated capability procedure within your organisation and may be using the framework set out in your disciplinary policy, but remember that you are dealing with capability not conduct. This requires a subtle difference of approach from the employer who should be prepared, initially at least, to be as supportive and constructive as possible to assist the employee to improve
- Keep the momentum of the process going: just because an employee goes off sick this doesn’t necessarily mean you have to stop
- Set reasonable targets and time periods for improvement and get the employee to agree to these
- The million dollar question is: How long do we need to give an employee to improve? This will vary from case-to-case depending upon the circumstances, but where an employee already has over a year’s service, adequate performance management is likely to take a significant amount of time – as a very rough rule of thumb, at least three months
- Be consistent in appraisals, and when operating any capability procedure, to help avoid charges of discrimination or bullying
- Try a carrot rather than a stick – can you link benefits to performance?
- Consider whether managers themselves need training and support to implement performance management procedures effectively
- Performance management should be an ongoing process and takes time. Employers should not just issue a warning and then forget about it. Regular reviews, both formal and informal, should ensure that management efforts bear fruit.
Finally, perhaps most important of all, do not be scared of performance management – it is never usually as bad as you fear!
Stuart Lawrenson is an associate at Shoosmiths. He can be contacted on 03700 86 6733 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it..
