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Performance management | How to address historic underperformance
Written by Alex Holmes on 24 October 2024
Every manager knows how easily performance conversations can get postponed or pushed aside – sometimes due to timing and other priorities, and sometimes because of the discomfort they bring. But what happens when this leads to months, or even years, of unaddressed underperformance? The commercial impact can be considerable.
Neglecting proper performance management
Firstly, it’s important to consider the penalties if performance management isn’t completed correctly.
At present, when an employee has over two years’ service, they have unfair dismissal rights which must be considered. In practice, this means that if you want to exit them due to poor performance, you can’t complete this with just one meeting, unlike with a short service employee where this may be possible.
It’s important to follow the Acas guidance on performance management, which will enable you to mitigate an unfair dismissal claim as much as possible, should the worst happen. A failure to do so can be a costly error for an employer, as the employee’s length of service is linked to the Tribunal award. In other words, the longer the service, the higher a Tribunal award could be.
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We’ve let things slide – what do we do now?
The first consideration is your performance management process; what process does it state you must undertake? If you do have a policy in place, it’s highly recommended that you follow it. That way, if you are unlucky enough to encounter a claim following a dismissal in this manner, you will be, as a minimum, able to show that a full process has been utilised, in line with your internal procedures and processes. A robust policy that’s in keeping with the Acas guidance is a strong starting point.
Once you have sourced your policy, consider the employee in question. If you were to start a formal performance management process now, would they have any knowledge of the underperformance, or is this likely to be a shock to them? Have they, for example, had regular performance reviews, and/or received regular and meaningful feedback on the concerns in a constructive manner that can be evidenced? If the answer is no to those two questions, then it’s recommended that you complete an investigatory meeting with the employee in the first instance, addressing the performance concerns and giving them an opportunity to improve without a formal sanction being applied.
Once you have completed this process, which includes giving the employee a reasonable amount of time to make improvements, if the poor performance continues, you can look at a formal process as an alternative.
Navigating the formal process
The Acas guidance states that a three-stage sanction process must be followed – even if the performance has been poor for some years. In practice, this means that performance management sanctions (First Written Warning, Final Written Warning, Dismissal with Notice Pay) cannot all be completed all at once – you would need to hold a performance management hearing with the employee. Make sure they are formally invited and detail their statutory rights.
At this meeting:
- Discuss and address the concerns to see if there are any mitigating factors to take into account; and
- Work together on a formal Performance Improvement Plan (PIP), setting out agreed targets for the employee, linked to their specific role. We recommend using an HR model such as ‘SMART’ targets to ensure all of the necessary details are included in the PIP and give the employee the best chance of being successful.
After this meeting, not only would the employee be issued with a finalised copy of the PIP, but they would ordinarily also be issued with the first formal sanction – a first written warning.
Potential pitfalls
As with any employment law process, there are some common considerations to keep in mind during the performance management process to ensure you are managing employees fairly and reducing risk as much as possible:
- Medical conditions: Is the poor performance linked to an underlying medical condition, or another protected characteristic? If so, you may need to take extra steps before formally managing the employee, as you could leave yourself open to a discrimination claim if you don’t.
- Are the targets reasonable? When creating a target, and considering if management is justifiable, employers need to consider whether it is fair to the employee. For example, if two employees completing the same role for the same hours each week are given different targets, or an employee is given a bigger target because ‘they are more experienced’, this is likely to be seen as unfair. Notably, targets shouldn’t be based on length of service (excluding trainees), as this in itself could be potentially age discriminatory.
Can't we just make them redundant?
In short – no. A redundancy scenario will only arise where there’s a diminished need for the kind of work that the employee is undertaking or a site closure. If they are simply poorly performing, but the role is still required in some capacity, this won’t be a genuine redundancy situation. Proceeding with an ‘engineered redundancy’ runs the risk of an unfair dismissal claim being brought by the employee.
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Managing Performance Issues | Following a Fair Process, Unexpected Grievances and Dismissals
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