UK: Performance Management – Getting It Right

Last Updated: 28 December 2018
Article by Virginia K. Allen, Sarah Beeby, Ryan Carthew, Mark Hamilton and Jessica Pattinson

Acas recently published a report entitled "Improvement Required?" which contained the results of research into employers' use of performance management systems. Performance management systems are processes which aim to maintain and improve employee performance in line with the goals and objectives of a business. Acas found that most of the businesses it consulted did not use any kind of performance management system (this was particularly the case for smaller businesses) and did not feel that they needed one. Only a quarter of respondents were able to confirm that their performance management systems were customised for staff with special needs, disabilities and neurological conditions. In response to its findings, Acas has called for organisations to increase the fairness and inclusivity of their systems and has published new guidance on performance management which can be found here.

Implementing an effective process

The report highlights the importance of performance management for employers of all sizes. It does not require a large amount of resources to put in place a way of effectively managing employees – often the simplest systems are the most effective. Here are a few practical tips for employers wishing to improve their performance management systems:

  • The process should begin early in an employment relationship. Employees should be given a clear and accurate job description and should understand what is expected of them when starting a new role. Fair and reasonable performance measurements should be set early on and communicated to the employee. They should inform the basis of their performance assessment moving forward.
  • Employers should work hard to maintain an open dialogue with their employees about their development throughout their employment. Regular informal meetings should form part of any performance management process to keep employees up to date on progress towards meeting targets and to identify areas of improvement.
  • Formal meetings between line managers and employees should be scheduled throughout the year, where agreed objectives are reviewed and any issues which have arisen through informal channels discussed. An annual appraisal should also take place where a formal rating of the employee's performance is provided. It is important to keep records of any formal process and provide the employee with a copy to ensure both the business and the employee benefit from these meetings.

Modernising the approach to performance management

Acas reported that one in 10 employers felt that their performance management system was demotivating for staff and only one in 10 employers said that their systems were used for planning and monitoring training and development.

Although a performance management process can be followed in relation to an employee who is struggling to perform as expected, these systems should not be used exclusively in this situation. The management of an employee's performance should be a continuous process which spans the length of their employment and should involve motivating staff and identifying areas for growth and development. Performance management should not be viewed only as a tool to identify poor performance or as a hurdle to clear before dismissing an employee with a capability issue.

There are a number of practical steps that an employer can take to ensure that the right approach is adopted: performance management processes should be kept separate from misconduct procedures; managers should engage with employees about their career progression and alert them to opportunities when they arise; and performance management processes should be used to celebrate the good work of employees. It is important that employers review and modernise their systems to get the most out of their employees – a well-structured performance review process can increase productivity and motivate staff.

Customising systems for those with disabilities

Performance management processes must be flexible and adaptable, particularly where employees have a disability. Acas reported that half of organisations adjusted the way they monitor employee performance for those with flexible working arrangements, but only a quarter did the same for those with disabilities. Many smaller businesses felt that adjusting processes for specific groups was unfair to other employees.

An employer will be indirectly discriminating against a disabled employee if they apply their performance management procedure to all employees equally, but it disadvantages those who are disabled. An employer will also fail to comply with the Equality Act if it does not make reasonable adjustments to its practices (including performance management processes) to ensure these practices do not disadvantage disabled employees.

When assessing the performance of an employee, managers should consider whether the employee has any conditions or impairments which may impact on their ability to carry out their role. If such a condition is identified, it is important to consider whether that condition could be responsible for any poor performance or whether additional support or training should be offered to assist in their career progression.

All managers involved in the performance management process should be briefed on the importance of modifying the procedure where necessary to ensure disabled employees are not discriminated against. If a manager has concerns, they should engage with the employee and discuss adjustments which could be made to the performance management procedure to alleviate the effect of a condition or disability. For example, an employee's dyslexia may impact on their ability to perform part of their role during a busy period as their difficulties may become more pronounced when they are stressed. Dealing with such an employee in the same manner as other employees may not be appropriate and following the employer's performance management process rigidly would result in discrimination. In such circumstances, the manager should focus on treating the employee fairly, consulting them where necessary and implementing appropriate support before appraising their performance.

The effective use of performance management processes by employers can motivate employees, increase productivity and help businesses to achieve their goals and objectives. The recent Acas findings highlight the need to ensure that those systems are used properly throughout the employment relationship and can be adjusted where necessary to accommodate disabled employees.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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