How to deal with performance management

Effective performance management has a significant role to play in both individual and organisational success. A well-managed process can help individuals understand what is expected of them as well as support them to achieve the expected level.

What is performance management?

Performance management is a collective process between managers and their direct reports in order to achieve high levels of organisational performance.

As such, line managers play a key role in performance management - they need to:

• ensure that their people or teams know and understand what is expected of them;
• develop their people to have the skills and ability to deliver on these expectations;
• give constructive feedback on performance; and
• give their people the opportunity to discuss and contribute to individual and team aims and objectives.

There are several factors that employers need to consider before embarking on any performance management / performance improvement process, to ensure that such a process is managed fairly. Transparency throughout is key!

Monitor employee performance / investigate concerns

Where performance concerns arise, it is often best to try and deal with these informally at first, before embarking on any formal course of action.

The first step is to discuss any concerns with the employee and give them the opportunity to comment on any evidence which supports the concerns being raised. Performance appraisals or previous informal discussions may assist with this process. Even where performance matters have been initiated informally, written logs of informal discussions should always be kept, to record what attempts have been made to address the concerns.

The informal stage may reveal underlying reasons for the performance issues, which employers will need to consider before deciding on next steps. For example, it may be that there is something in their working environment that is preventing them from working optimally, such as a lack of training. Alternatively, any indications of ill-health or physical impairment should be investigated further in case the employer needs to consider making any adjustments in cases of disability. Once the underlying cause is known, the employer can establish the correct support required / detail of the performance improvement plan.

Don’t delay

It is important that employers don’t delay what could be a difficult conversation around poor performance. While it may be uncomfortable to have these initial conversations, leaving employees who are underperforming unchecked will only make the situation more difficult to address down the line.

Hold a meeting

If, having dealt with the matter informally, there is no improvement in performance, or if the performance concerns are sufficiently serious, then a formal meeting should be arranged. The employee should be notified, in writing, of the concerns regarding their performance and be given a summary of relevant information and documents which support the concerns raised. The employee should also be warned of the possible consequences if performance is found to have fallen short of the required standard.

The employee does not have the right to be accompanied at an investigatory meeting but does have the right to be accompanied at a formal meeting that could result in ‘disciplinary’ action being taken, including any capability / performance warning.

At the meeting, both parties should set out their positions as well as determining what, if any, remedial action can be taken. If the underperformance is established, then a performance improvement plan can be put in place alongside a formal warning being issued. The non-statutory Advisory, Conciliation and Arbitration Service (ACAS) guide refers to first written warnings in poor performance cases as "improvement notes" and the ACAS Code recommends that at least two warnings are given before an individual is dismissed for poor performance.

Set clear objectives

When putting in place a formal performance improvement plan, clear and reasonable objectives should be set for the employee to achieve within a reasonable period of time and the employee should be warned about what will happen if those objectives are not met. The employee should be notified in writing of the outcome of the meeting and of their right of appeal.

Employers need to make sure that any objectives are understood by the employee and that the employee understands the reason why they are on a performance management plan. Any objectives set should reflect what is expected of the employee over the coming months and should focus specifically on the area in which the employee is underperforming.

It is important that objectives are measurable so that there is no dispute over whether they have been met. While performance plans should be challenging, employers should also ensure that they are realistic, and that the employee is actually capable of achieving what is set out. The purpose of a performance management plan is to get the individual to the required standard, not to set them up to fail.

Set clear timescales

Any objectives set as part of a performance management plan should be timebound so that they can be reviewed against a specific timescale with a clear plan of when meetings will take place to discuss progress.

How much time needs to be given to the employee to achieve the set objectives will depend on the circumstances and the role in question. If the employer has a performance management / capability policy which provides for a certain timescale for improvement, this should be adhered to. In the absence of such timescales, the quality and length of the employee's past service may be a relevant, as will the extent of the underperformance.

Provide support

As well as setting performance objectives, the employer should also offer appropriate support or training to help the employee to meet the required standard. This could include regular monitoring of the employee's performance, additional supervision or providing extra resources.

Review progress

It is important that the employer diarises the period given to the employee for improvement and any agreed dates for review or monitoring of the employee's progress to ensure that these are met.

Employers should always keep a full and accurate record of the employee’s performance throughout the process as it can assist with discussions during review meetings as well as providing evidence should further warnings be needed.

Asking for employee feedback

As part of every performance management plan the employee should feel engaged and involved in the process. If the employee shuts off and doesn’t engage it will be counter-productive for all involved. When discussing comments with employees, employers should keep the tone of the meeting non-judgmental so that the employee feels free to express their views on the process and make comments about the objectives set and whether they feel they can be achieved.

What if performance cannot be turned around

Sometimes, having followed a performance management plan, it is clear that the employee’s performance cannot be turned around.

In the event that the employee's performance does not improve despite repeated warning and support, an employer may then consider dismissing the employee on grounds of capability (this being one of the five potentially fair reasons for dismissal). An employer will have to show that it had a reasonable belief in the employee's inability when it took the decision to dismiss for capability reasons so there must be clear evidence of the poor performance and a lack of sufficient improvement despite the support offered to the employee.

It is therefore key that the employer has followed a clear performance management plan, setting reasonable, measurable and clear targets, keeping notes and documentation for each performance meeting to show the support given to the employee and the opportunity to improve prior to their dismissal.

Remember that, whilst there is no absolute obligation on an employer to consider alternative employment or demotion before taking the decision to dismiss, it may be unreasonable not to do so depending on the size and administrative resources of the employer.