Performance Management Pack

Performance Management procedures are essential for ensuring your employees understand exactly what is required of them regarding their level of performance to maximise efficiency for the business. Effective performance management provides greater opportunities to develop and enhance all employee’s skills and capabilities, deliver the company objectives more efficiently & with a focussed strategy, drive innovation & engagement through positive behaviours, increase profitability and employee retention, and minimise risks or losses that can be caused by incompetence and poor productivity

Performance management should be about creating a culture in which employees feel safe and encouraged to continuously improve and develop their skills, behaviours and contributions to the company. It is a key element of the working relationship and should be carried out to the benefit of employees and the company

This pack will provide you with all of the essential tools that you need to ensure that every employee in your business is treated equally and that issues are addressed fairly and reasonably to ensure that your actions comply with current employment law

Why is this important?

In 2021 an SEC survey found that in businesses where performance management is highly utilised vs those where it is low:

Employee engagement was 14% higher, workforce performance was 24% higher, and the proportion of employees reporting that performance management is fair and accurate was 50% higher

Poor performance causes a significant cost to a business in terms of lost productivity, lost time spent rectifying mistakes, and the financial cost or damage to the company’s reputation. Addressing underperforming employees is usually the least favourite responsibility of a manager and therefore often avoided. Not only can it be seen as an unpleasant experience, but if not managed properly can create significant risk to the company from costly tribunal claims for discrimination, unfair dismissal, or constructive dismissal

Unfortunately, avoiding dealing with poor performance can lead to various toxic situations for the company:

Damaging the company reputation and customer confidence in dealing with the company or referring friends/business acquaintances in the futureLost efficiency, productivity and profitabilityIncreased time and resources spent on customer complaints due to continuous poor service or quality of goods suppliedDramatically reduced team morale & employee engagement, leading to increased disciplinary issues, grievances, and employee turnoverNegatively impacting the mental health & wellbeing of the poor performing employee and their team

There is also a severe penalty for not dealing with poor performance relating to a disability (and other ‘protected characteristics’ as defined in the Equality Act 2010 such as pregnancy, age or sex) in a fair manner. For example, an employee being given a First Written Warning because their performance level is not at the required standard when the poor performance is affected by autism, but the company has not discussed and implemented reasonable adjustments to the performance goals (or timescales to achieve these) could result in a successful claim at an Employment Tribunal for direct disability discrimination. The compensatory award for such claims is uncapped and the company may also incur detrimental damage to its reputation

Find out why it's important in our Performance Management HR case study