April 25

How to handle an under performing employee….

Employees who are not performing to the standard that may be reasonably expected need to be managed. Ignore them at your peril! A manager may be impatient to move them out of the organisation, however, there is a balance between supporting the needs of the business, managing potential legal and reputational risks and running a proper process that gives the employee every chance of performing in the role – or at least giving them the opportunity for them to see for themselves that they are not performing.

Making life difficult

Many employers consider that the normal HR processes for performance management are too long and too employee friendly. The employer is convinced that the employee will never work out and does not perceive the need to put them through a process (in which they may have to invest time) to tell them what they already know.

Some employers avoid the use of process and instead just make life difficult for an employee, in the hope that they will get the message and leave. This is a risky approach given the potential for a constructive dismissal claim and an employer should be dissuaded from such actions.

Increasingly, however, HR professionals are often left trying to defend their performance management processes, even though they have significant sympathy with the views of the business.

Fix it sooner rather than later

What is key is the need to address underperformance as soon as it becomes apparent. The vast majority of underperforming employees have never performed particularly well, they may be given the benefit of the doubt for an extended period after joining and by the time HR become involved, the business has already lost patience.

Where HR takes an increasingly proactive approach, catching up with line managers on a monthly basis until it is clear that their new hires have landed well, underperformance is able to be tackled almost immediately and well before the business has become frustrated.

Fit for purpose

Is the performance management process that you use fit for purpose? While any performance management process cannot be a sham one, most processes can be rebalanced to help employers move far more quickly towards an exit. Having appropriate performance targets in place, coupled with timely feedback, usually speeds up any exit discussions whether formal or informal.

The other key point to remember is that employees in their first two years can be exited, in most instances, more easily. It is unlikely to be necessary to place an underperforming employee with less than two years’ service in the same performance management process as those longer serving employees. Given the cost, both financial and in management time, of recruiting, it is always wise to have some process to address underperformance, but for those employees with less than two years’ service it can be less rigorous.

All that employers need to be aware of, in exiting employees without a process (or a lighter process) where they have less than two years’ service, is whether there are any protected characteristics that the employee may have to avoid risk of a discrimination claim.

Protected conversations

For those employees with more than two years’ service, the choices are a performance management process or, perhaps, the use of protected conversations which allow the employer to raise the possibility of a termination without the risk of a claim.

This can work well in many cases, but where the employee says “no”, it can often make any subsequent performance management process more difficult, given that the employee knows there is an intent to exit them from the company.


In summary, these points are important to bear in mind:

* Do not allow concerns about legal risk to prevent effective management of poor performance.
* Provide clear, prompt and constructive feedback where an employee is underperforming.
* Address any barriers to effective performance.
* Set a standard for the employee to meet and allow a reasonable opportunity for improvement.
* Invoke a formal procedure where the employee fails to improve.
* Issue a formal warning if appropriate and monitor the employee’s progress.
* Hold a performance dismissal hearing where the employee fails to improve.
* Consider redeployment as an alternative to dismissal.
* Consider whether or not dismissal is appropriate.
* Keep in mind the option of a settlement agreement.
* Put extra effort into helping an employee reach the required standard if there has been a failure to address underperformance in the past.
* Revert promptly to the formal procedure where an improvement in performance is only temporary.