One of the features that distinguish those businesses that can ride stormy economic seas is having effective performance management, but it can often be a difficult area for managers and HR professionals alike.
Why is performance management so important?
- It clarifies roles and personal objectives
- It makes people feel valued
- It aligns personal contribution to the organisation's goals
- It helps communication
- It raises awareness
- It identifies personal learning and development needs
It is when people are consistently underperforming that the difficulties tend to arise. These are the issues that we often don't like facing up to or we deal with ineffectively. Other staff, however, is often fully aware of the situation and it reflects badly on management if the problems are not addressed. In hard times they simply cannot be ignored.
The procedure for dealing with underperformance basically has four sequential stages all of which require face to face discussions with the employee:
- Informal discussion – raise issues, consider support/training
- First formal meeting – agree a performance improvement plan (PIP)
- Second formal meeting – PIP and formal warning
- Final formal meeting – possible outcomes – transfer/demotion/dismissal
N.B. The procedure can end at any of the first 3 stages if performance improves.
At the second and final formal meetings it is imperative that you follow the statutory minimum requirements:
- Send a letter before each meeting detailing the areas of underperformance
- Comply with the employee's right to be accompanied Send a letter after each meeting confirming warning/decision
- Explain to the employee their right of appeal
At each meeting:
- Clarify work duties
- Review performance
- Explain concerns
- Identify the gap and potential causes
- Identify support/training to eliminate or reduce gap
- Complete a PIP
- Set time limit and date of next review
Whatever the ultimate outcome, to manage performance effectively you need the following key skills:
- Questioning and listening
- Ability to recognise the signs at an early stage
- Analytical skills – sensitive to issues that might impact on performance
- Coaching skills
- Ability to set clear objectives and performance measures.
Remember, what can't be measured can't be managed!
Also, beware of the following common obstructions to an effective performance management process:
- The employee raises a grievance
- The employee alleges bullying
- The employee alleges you are bullying them
- The employee goes off ill with stress
- The employee alleges they have medical condition affecting performance
- Don't act on impulse – seek advice
Remember, capability can be a fair reason for dismissal so long as you have:
- Dealt with it fairly
- Tried to remedy problems effectively and in good time
- A procedure for managing poor work performance/capability and it is communicated, publicised and applied consistently.
Updated 28th June 2016
Whatever the economic climate, keeping hold of your key staff members is vital.