When poor performance is handled badly, it can lead to frustration, grievances and potentially Employment Tribunal claims. A clear and consistent approach can help employers address problems early while treating employees fairly.
Performance management should not simply be about dealing with problems. Regular feedback, clear objectives and appropriate training can help prevent underperformance from becoming a formal issue.
Identify the performance problem
Before taking action, employers should establish exactly what the concern is.
Examples of poor performance might include:
- Consistently missing agreed targets
- Producing work below the required standard
- Repeated errors
- Failing to complete work on time
- Difficulty carrying out key responsibilities
- Failing to meet reasonable expectations for the role.
The expected standard should be clear and achievable. If an employee has never been told what good performance looks like, it may be difficult to fairly criticise them for falling short.
Is it capability or conduct?
Employers should distinguish between capability and conduct.
Capability concerns whether an employee is able to perform their job to the required standard. Conduct relates to their behaviour or unwillingness to meet appropriate standards.
For example, an employee struggling with a new system despite trying to use it correctly may have a capability issue. An employee who is capable of completing work but deliberately refuses to follow reasonable instructions may raise a conduct issue.
The distinction matters because the appropriate management process may be different. Acas advises employers to understand the reason for poor performance before deciding how to respond.
Start with an informal conversation
In many cases, performance concerns should initially be addressed informally.
A manager should explain the problem clearly, give the employee an opportunity to respond and discuss what needs to improve.
There may be an underlying reason for the change in performance. For example, the employee may need additional training, clearer instructions or support with workload.
The discussion should normally identify:
- What needs to improve
- The standard expected
- What support will be provided
- When progress will be reviewed.
Employers should also keep an appropriate written record of performance discussions.
Consider training and support
Performance management should give an employee a genuine opportunity to improve.
Depending on the problem, appropriate support could include:
- Additional training
- Coaching or mentoring
- Clearer objectives
- More regular supervision
- Access to appropriate equipment or resources
- Changes to how work is allocated.
Acas guidance emphasises that employers should support employees to improve and provide adequate resources to enable them to perform their role.
When should you use a Performance Improvement Plan?
If informal discussions do not lead to sufficient improvement, a Performance Improvement Plan (PIP) may be appropriate.
A PIP provides a structured way to explain what needs to change and monitor progress.
It should usually include:
- Specific areas requiring improvement
- Clear and measurable objectives
- A reasonable timescale
- Support or training available
- Review dates
- The possible consequences if performance does not improve.
Objectives should be realistic and relevant to the employee’s role. Acas recommends discussing the plan with the employee and providing them with a written record.
Consider health and disability
Employers should be alert to situations where poor performance may be connected to an employee’s health or disability.
If an employee is disabled, the employer has a legal duty to make reasonable adjustments to remove or reduce disadvantages they experience at work.
This could potentially include changes to working arrangements, equipment, hours, duties or the way performance objectives are assessed.
Employers should therefore understand whether there is an underlying health issue before moving towards formal action. Taking disciplinary or dismissal action without properly considering disability and reasonable adjustments can create discrimination risks.
Moving to a formal capability process
If reasonable informal measures and support have not resulted in sufficient improvement, the employer may need to move to a formal capability procedure.
The employee should understand the concerns, have an opportunity to respond and know what improvement is required.
Employers should follow their own procedures and ensure any formal process is consistent with the Acas Code of Practice where applicable.
The process may involve formal warnings and further opportunities to improve before dismissal is considered.
Can an employee be dismissed for poor performance?
Potentially, but dismissal should normally be a last resort.
Before dismissing an employee on capability grounds, an employer should have evidence of the performance concerns and the steps taken to help the employee improve. Acas also recommends considering whether changes to the employee’s duties or a suitable alternative role may resolve the issue where appropriate.
A fair procedure remains essential.
Employers should avoid deciding that dismissal is inevitable before the performance process has been completed.
Keep performance management consistent
Consistency can help reduce the risk of disputes.
Managers should apply performance standards fairly across employees in comparable circumstances and avoid allowing unrelated factors to influence their decisions.
Good records are also important. Employers should retain appropriate evidence of objectives, reviews, support offered, performance concerns and meetings with the employee.
Regular performance reviews can help identify issues before they become serious and create an opportunity to discuss development, support and expectations.
Managing performance effectively
Good performance management combines clear expectations with appropriate support and fair procedures.
Addressing concerns early can help employees improve and may prevent problems from developing into formal capability procedures or employment disputes.
DTM Legal’s Employment & HR team advises employers on performance management, capability procedures, Performance Improvement Plans and dismissals, as well as providing practical support to managers dealing with underperformance.
If you are managing an employee’s performance or considering formal capability action, contact DTM Legal’s Employment & HR team to discuss the appropriate approach.