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Employers' Guide to HR
Managing Poor Performance
Having the skill-set and competence to manage poor employee performance is an essential capability of any line manager who wants to maximise individual and team performance.
Last Modified on: 2005/03/17 11:39
By managing poor performance effectively, the performance levels of weaker team members are increased and their skills developed, while the risk of performance-related unfair dismissal claims is minimised.
An employee's poor performance may constitute a disciplinary matter and, depending on the circumstances, can be an acceptable reason for dismissal under the Employment Rights Act (ERA) 1996. This is because poor performance can fall within the definition of capability under the ERA, on the basis that the employee's skill or aptitude fails to meet the standard required by the employer for the proper fulfilment of the employee's role. (In exceptional circumstances, an employee's poor performance may fall so far short of the standard required by the employer that it constitutes gross incompetence and the employer may feel it has no alternative but to terminate summarily). Poor performance can also overlap from reasons of capability to misconduct, where idleness, carelessness and negligence are the reasons behind unacceptable performance. If there is an overlap, the employer should identify the main reason, and manage the case primarily on that reason.
A central principle when managing poor performance, however, is that all employers are expected to comply with a fair and reasonable procedure, and that if an employer fails to comply with such a procedure any dismissal is likely to be unfair. (The ACAS Code of Practice No.1 on disciplinary rules and
' By managing poor performance effectively, the performance levels of weaker team members are increased and their skills developed, while the risk of performance-related unfair dismissal claims is minimised. An employee's poor performance may constitute a disciplinary matter and, depending on the circumstances, can be an acceptable reason for dismissal under the Employment Rights Act (ERA) 1996. This is because poor performance can fall within the definition of capability under the ERA, on the basis that the employee's skill or aptitude fails to meet the standard required by the employer for the proper fulfilment of the employee's role. (In exceptional circumstances, an employee's poor performance may fall so far short of the standard required by the employer that it constitutes gross incompetence and the employer may feel it has no alternative but to terminate summarily). Poor performance can also overlap from reasons of capability to misconduct, where idleness, carelessness and negligence are the reasons behind unacceptable performance. If there is an overlap, the employer should identify the main reason, and manage the case primarily on that reason. A central principle when managing poor performance, however, is that all employers are expected to comply with a fair and reasonable procedure, and that if an employer fails to comply with such a procedure any dismissal is likely to be unfair. (The ACAS Code of Practice No.1 on disciplinary rules and procedures is the standard benchmark and can be submitted to an Employment Tribunal as an example of good practice; this will help any organisation defend a claim.) Poor performance cases should be managed at the outset, in line with the organisation's procedure. The first step, however, is to diagnose and establish the reasons for the poor performance. Employee capability and poor performance An individual's capability to do the role, which should have been identified in the selection process, first needs to be established. Capable employee Where an employee has the capability to perform the role to the required standard but does not, the reasons for the under performance should be established. For example, does the employee need re-training or is she/he suffering from an illness or disability? The employee should be encouraged to find ways to overcome the poor performance and should be given support and guidance where necessary. Clear objectives and measures should be set and the employee's progress should be monitored regularly. Informal discussions should be held to tackle poor work performance by a capable employee, before any formal disciplinary action is initiated. Incapable employee It is important to understand why the employee is incapable and therefore to establish the reasons for the incapability. For example, has the job grown or changed, or was the employee inappropriately selected? The emphasis should be on helping the employee become capable of performing his or her role effectively. This can be done by guiding through examples, providing the relevant training, coaching, setting goals for achievement and monitoring progress. Again, informal discussions should be the first step in tackling poor performance through incapability, before any formal disciplinary action is taken. Where further training and coaching is unsuccessful in solving the problem, other options should be discussed with the employee. This can include making changes to the role or identifying an alternative role within the organisation. Informal employee counselling Informal counselling is appropriate in the early stages of poor performance cases. There are five stages to an informal counselling meeting: Highlight the poor performance to the employee Establish the reasons for the under performance; the employee must be given an opportunity to state his or her case, explaining his or her reasons for the under performance Explicitly state the required level or standards of performance and set SMART (i.e. Specific, Measurable, Agreed, Realistic and Time-bound) objectives Identify and agree ways of solving the under performance eg line manager coaching Set a review date and follow-up meeting Confirm the agreed outcomes of the meeting in writing. Follow-up to the informal meeting The objective of the follow-up meeting is to: Monitor and review an employee's progress Provide feedback and further support if required If performance is still unacceptable, set further objectives and a review date. Again, the agreed outcomes of the meeting should be documented and the employee notified in writing If performance continues to be unacceptable after a further review, move to formal disciplinary proceedings. Investigation and disciplinary hearing Where there has been no significant improvement in poor performance and the employee is not meeting the requirements of the role, formal disciplinary action may need to be taken. However, before a disciplinary hearing can be arranged or prepared for, a thorough investigation of the employee's performance must be undertaken and problems identified. The reasons for poor performance need to be examined and this can be achieved by consulting the employee's line manager, supervisor, colleagues, customers or suppliers, or anyone who can supply objective feedback on the individual's performance. The investigation may reveal that the performance has been caused by poor induction and training, inefficient systems or processes, rather than the employee's incompetence. The result of the investigation will determine the next steps to be taken. Failure by the employer to investigate properly may render a dismissal unfair on two counts: because no acceptable reason for dismissal can be demonstrated and because the dismissal procedure was unreasonable. If, following the investigation, the employer believes that the responsibility for poor performance lies with the employee, and that disciplinary action is required, the employer should arrange a disciplinary hearing. The employee should be: Informed of all the relevant allegations Be given an opportunity to make representations at the hearing and rebut the allegations Notified that he or she maybe accompanied at the hearing by a fellow employee or trade union representative. Click here for further details. At the disciplinary hearing the employer should ensure: The employee knows the hearing is a disciplinary meeting, and is aware of the purpose of the meeting The nature of the complaint has been communicated to the employee sufficiently in advance of the hearing to enable him or her to prepare properly All the relevant facts have been gathered (after the employee has had an opportunity to put forward his or her case and explanations) The standards of performance are communicated again at the hearing. After the disciplinary hearing, or during an adjournment towards the end of the hearing, if the employer retains the view that the responsibility for the poor performance still lies with the employee, the employer should issue a warning to the employee. (In the majority of poor performance cases, the employer should start at the beginning of the formal warning system). The recommended warning system, achieves the following: It notifies the employee that the employer believes his or her performance is not up to the required standard It gives the individual a reasonable opportunity to improve It identifies the consequences of a failure to improve (eg shift to the next stage of the procedure, no salary review, demotion or dismissal). Where a warning defines the terms of the consequences of a failure to improve, the employer should adhere to these terms. At the close of the hearing, or in a follow-up meeting, SMART objectives should be set based on the required level of performance and then monitored on a regular basis (weekly or monthly depending on the role and seniority of the employee). A formal review date should also be set and stated in the written warning, to evaluate the individual's performance against objectives. If a particular level of performance by an employee is essential to the employer, the best course of action maybe to specify the performance requirement expressly within the employee's contract of employment and to state that failure to reach that level of performance will or is likely to result in dismissal. Employee assistance and opportunity to improve Employers are required to give an employee a reasonable opportunity to improve his or her performance, except in extreme cases where the employee's performance is so inadequate that incapability is irredeemable. There is no legal definition of a 'reasonable opportunity to improve'; this depends on the circumstances of each case. Case law suggests the employer should consider the following: How long the employee had been aware of the employer's dissatisfaction before the employer issued a warning How far below standard the employee's performance has fallen Previous performance levels, and recent performance during any informal or formal review periods Length of service and any mitigating circumstances. The more steps a line manager takes to assist the employee in attempting to improve his or her performance the more likely the employer is to be able to defend an unfair dismissal claim. The employer should consider additional specific training, closer supervision, and frequent monitoring of progress. If alternative work is available, this should also be considered and the employee consulted. The information contained in this article is for general guidance only and represents our understanding of employment and associated law and employee relations issues at the date of modification. VizualHR cannot be held responsible for any action or inaction taken in reliance upon the contents. Specific advice should be sought on any individual matter.
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