Published by: Alec Colson

Handling Performance Issues With Confidence

Employers, particularly small businesses without access to HR support often find dealing with poorly performing employees difficult and time consuming and in many cases will hope the problem will be resolved without the need to take formal action.

Assessing poor performance can be difficult and although employees cannot normally claim unfair dismissal until they have at least two years’ continuous employment they are still in a position to bring discrimination claims from the commencement of their employment. In any event, employee performance varies over time and can be affected by other factors for example by personal issues outside the workplace, poor management or excessive workload.

Performance needs to be continually assessed and managed in order to try to prevent problems arising. An Employment Tribunal is unlikely to be sympathetic to an employer who dismisses an employee with 10 years’ service on the grounds of poor performance if the employee has only been warned about their performance within the last 3 months of their employment.

It is important that the employer sets out the requirements of the role at the recruitment stage to ensure that the person has the necessary skills to undertake the role and so that the employee knows what is expected of them.  If the employee is required to meet targets, it is important that the employee knows what the targets are and made aware the consequences of not meeting certain targets.

Probation Periods

It is common practice for a new employee to be subject to a probationary period (usually 3 or 6 months) with the provision to extend the period if necessary.  The probation period allows the employer to assess the employee’s ability to undertake their role prior to them acquiring sufficient service to claim unfair dismissal. However, it is still important that the employee is made aware of their poor performance otherwise in the event that they are dismissed they may consider that there were other reasons for their dismissal, for example, on the grounds of their sex or race.

The Importance of Evidence

In order to assess poor performance of an employee, the employer requires evidence and that this needs to be communicated to the employee. Employers often find this difficult to do as poor performance is sometimes difficult to quantify. An effective performance appraisal system will assist with this process as it should provide a written record of concerns about an employee’s performance where it is not at the required level. In order to be effective, managers need to be honest with their employee’s performance. It is not credible for the employer to start raising performance issues with the employee if the employee has had a recent positive appraisal.

Whilst it is important not to avoid the performance issues, it is also important employers should not “jump in with both feet” and take a heavy handed approach leaving the employee feeling humiliated and devalued. The employer needs to act with a sense of proportion.

The ACAS Code

The purpose of managing performance is to assist the employee to improve their performance and if their performance does not improve, it will be necessary to follow a fair disciplinary procedure in accordance with the ACAS Code of Practice on Disciplinary and Grievance Procedures (the ACAS Code).

Although there is no legal requirement for the ACAS Code to be followed, employers should follow the Code as an Employment Tribunal is obliged to consider the ACAS Code when deciding whether a dismissal is fair. Moreover, an unreasonable failure to follow the Code by the employer may also result in compensation being increased by up to 25%.

The ACAS Code recommends at least two written warnings (a first written warning and a final written warning) prior to dismissal for poor performance unless there is gross negligence. Employees should be given a reasonable timescale between each warning to improve their performance. The length of time will depend on the circumstances of the case but it is usually between 3-6 months. In addition to the warnings, the employer should normally provide additional support and training to help the employee to improve their performance. The employee’s performance should be reviewed on a regular basis following the warning.

If after receiving a final written warning and additional support, the employee’s performance has failed to reach the required standard the employer may be in a position to dismiss the employee fairly.