Employment Law Update - When to Use Performance Management and When to Review Performance

From characters as diverse as Danii Minogue to Chris Grayling to Jedward, the performance of those in the public eye is always under scrutiny and being judged, though the public are usually powerless to carry out any sanction beyond the expression of approval or disapproval. It’s different at work.

It is the right and duty of employers to scrutinise employee performance and to ensure that each employee is working at his absolute best. But do ensure that you keep the management of poor work performance and the carrying out of performance reviews entirely separate. Both performance management and performance review (also known as performance appraisal) are essential management tools.

They operate in the same area, but are quite different things. Performance management is the name given to the process of managing under-performing employees (people who can’t do some aspect of their work as opposed to those who won’t). A performance management discussion will usually start as an informal but noted conversation, identifying the issues and agreeing a performance improvement plan over several months.

If the employee has not met the targets set out in the performance improvement plan, the employer will escalate matters and start a formal exploration through the disciplinary process. In cases of poor work performance, the formal discipline process used is often referred to as the capability procedure. It is nevertheless a formal process following the discipline procedure set out or referred to in the ACAS Code and which gives the employee certain statutory rights when the formal phase has started.

These include the right to be accompanied and a right of appeal against a formal disciplinary sanction, including warnings, demotion and dismissal. Poor work performance is considerably more common that misconduct and a business can lose thousands of pounds if poor performance is not identified and addressed. The employer’s responsibility to manage poor performance issues should start as soon as the manager becomes aware that there is an issue. It should not wait to be raised at a performance review.

The purpose of a performance review is to carry out an objective and thorough review of the employee’s conduct and performance over the past few months against agreed targets, but also against the employee’s broader job duties. Many managers get stuck on the targets written down on the organization’s appraisal form and don’t consider anything beyond that, which is a missed opportunity. The targets only tell part of the story so look at the whole picture.

The performance review also looks to the future and considers new targets against the organization’s corporate goals as they have been interpreted to that particular section of the business. The golden rule with performance reviews is that there should never be anything new in them. They are the ultimate example of management recycling.

This means that while it is perfectly acceptable to review examples of poor performance (or misconduct) in the performance review, irrespective of whether the process has been addressed thus far informally or it has reached the formal process; to comment on how things are going; even to revert to the targets set there and to make it a target in the performance review for the next review period. The trick is to keep a light touch. Don’t avoid difficult conversations (after all they’re not new); but don’t over-labour then either.

If you raise a problem for the first time at a performance review (it happens frequently),the risk is that the entire conversation degenerates into a sort of quasi-disciplinary conversation, which is irretrievably flawed because the procedural requirements have not been met. Once procedure is flawed any ultimate dismissal may be found to be unfair. One of the major problems for managers is that they do not carry out data collection for the performance review on an ongoing basis.

If it’s not, it means that the reviewer is trying to assess what’s in his memory in the last week or two. And memories can be very flaky. To help yourself, jot down things in the week they happen, including any corrective coaching (i.e. performance management) that you give to an employee. Many organizations carry out monthly one-to-one meetings with their staff. These meetings are very useful for nipping things in the bud and recognizing good quality work.

The notes from the one-to-ones can also be used as part of the evidence in the performance review. Hope this clarifies the difference between the two and why it’s important to ensure that performance reviews are not used as performance management sessions. We specialise in ensuring that your employees are performing at their optimum. If you want to get more from your staff, get in touch.

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