Employee performance management

Getting the best out of employees is one of the biggest challenges faced by managers.  What managers can do to manage performance and, if necessary, how to dismiss an employee for poor performance?

Poor performance can include lack of productivity, inflexibility, a breakdown in working relationships with colleagues or customers, a failure to reach targets, customer complaints, and potentially negligence or mistakes. Ignoring these issues risks undermining the manager’s position and demotivating other staff, whereas dealing with them can increase both productivity and staff engagement.

Managing performance on a day-to-day basis

It is far better to deal with problems as they arise, rather than waiting for them to become a major issue. Performance should be kept under review throughout the employment relationship, starting with the probationary period. If the employee struggles to perform during the first few months of their employment, when arguably they are trying to impress in a new role, you should give serious consideration to whether it would be best to part company with them at the end of their probationary period. You should carry out regular informal meetings on a one-to-one basis with all employees to check on their progress, and identify any potential problems, which you can address at an early stage.

Annual appraisals are very important and can provide useful evidence where you decide to take formal action, but they need to be conducted honestly. There is no point in giving someone a glowing appraisal and then trying to dismiss them six months later for poor performance. Formal interim reviews should be carried out between annual appraisals so that you can check on progress made against the objectives that were agreed at the appraisal, and help the employee if these objectives are not being met.

Using all of these tools makes it less likely that you will have to have an uncomfortable conversation with an employee about their performance.

How to deal with an employee who is underperforming

You should consider whether performance is actually the issue before taking any formal action. There could be an underlying cause, such as ill health, lack of training or bullying that you need to address instead.

You should begin by having an informal discussion where you explain the problem and ask for the employee’s comments and suggestions for improvement. You should agree when you will review the situation. If the agreed improvement does not take place, you should move on to a formal procedure. It is important to give the employee support and any additional training they need, in order that they have an opportunity to improve. Throughout this process, a dismissal cannot be a foregone conclusion.

Preparation is key. Before any meeting to discuss performance, you need to establish the facts, check your policies and think about what you are going to say. Meetings should take place face-to-face, in private and with no interruptions. Allow enough time for the meeting, including breaks. You can use a pre-prepared script if you wish. You need to cover the purpose of the meeting, the structure, what the problem is and the impact it is having, any evidence, any points the employee wants to make, their proposals to remedy the situation, and the options available. You then need to make a decision and follow it up in writing.

It can take a long time to follow a performance management procedure and a settlement agreement can be used to short-circuit it. Such an agreement states that the employer will make a payment to the employee, in return for a legally binding assurance not to bring any employment claims. However, there are risks involved in this and it is vital to obtain legal advice before going down this route.

Fair dismissal reason and procedure

In order to have a fair dismissal, you need a potentially fair reason. Where the employee has failed to perform to the required standard, the fair reason will usually be capability. Your decision to dismiss must also be reasonable.

You need to follow the correct procedure, which will involve having a capability hearing, where both sides set out their cases and you decide on remedial action and a reasonable period for improvement. A written warning is issued and the employee is told what will happen next if the required standard is not met. Usually, a second written warning is given and, if there is still no improvement, you can dismiss with notice. Where you are holding formal meetings, the employee needs to be given a written invitation to attend, together with copies of any evidence, and has the right to be accompanied by a trade union representative or a colleague. The outcome should be confirmed in writing and the employee should be given the right to appeal the decision.

Difficult issues

It is not uncommon for an employee to improve during the warning period and then lapse soon afterwards. Where there is a clear pattern, you can take this into account when deciding how long the next warning should last.

Employees often seek to postpone hearings for various reasons. If their chosen companion cannot attend, the employee can ask to delay the meeting for up to five working days. If the employee is ill and does not attend, you need to rearrange the meeting. If they persistently fail to attend, you should take legal advice as to what to do. Another common problem is the employee who goes off sick with stress when invited to a formal meeting. In this situation, you need to obtain medical advice as to whether they are fit to attend the hearing.

Finally, an employee will sometimes raise a grievance during a capability process. You may need to suspend the process while you deal with the grievance although, if it is related to the disciplinary case, you may be able to deal with both together.

Take legal advice immediately if any of these issues arise.

Possible dismissal claims

An employee with two years’ service or more can bring a claim for unfair dismissal if they are dismissed as a result of poor performance. Any employee, including one with less than two years’ service, can claim for automatic unfair dismissal if they believe they have been dismissed because they are a whistle-blower, or for a reason such as their pregnancy or trade union membership. You will have a defence to an unfair dismissal claim if you have a good reason for the dismissal and you have followed the right procedure. You also need to follow the Acas code of practice on disciplinary and grievance procedures; otherwise the employee’s compensation could be increased by up to 25 per cent.

If an employee believes they have been dismissed because they have a protected characteristic such as age, disability, gender reassignment, marriage or civil partnership, pregnancy or paternity, race, religion or belief, or sex or sexual orientation, they can also bring a claim for discrimination.

If you dismiss an employee without notice or do not pay their accrued holiday pay, they can claim for a breach of contract.

If you need advice on what to do if you have an underperforming employee and would like to tackle the issue, or if you would like to adopt a performance management procedure, Warners Solicitors on 01732 770660 or email [email protected]

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances

Send us a message or call 01732 770660

    • This website is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply