Performance Matters?Tuesday 7 October 2014

Emma Peacock

Kaajal Nathwani

Introduction and agenda

• Why managing underperformance matters?• Fundamental legal principles• Principles & processes• Performance management tools• “Red flags” & case study• Without Prejudice discussions / protected

conversations• Psychometric testing• Questions

Why managing underperformance matters?

• Xpert HR survey published in July 2013:

• 9 out of 10 organisations considered underperformance to be an issue

• Only 20% of organisations had made the development of managers’ performance conversation skills mandatory

• 45% of employers considered that the majority of managers were not competent to deal with underperformance

Why managing underperformance matters?

• ACAS – Performance management should “continuously improve the performance of individuals and that of the business”.

• The purpose of performance management is to retain and improve staff – it is not a shortcut to dismissal.

• Allows for transparent communication providing an effective way for employees to voice views and concerns and managers who facilitate and empower their staff.

• Engaged employees lead to increased profit; morale; and retention.

• Evidence of performance management is also vital in defending claims, e.g. unfair dismissal claims for redundancy, or discrimination.

Why Managing Underperformance Matters

• Case studies:

• BBC – wasting £80m per year through poor staff management

• Microsoft – forced ranking system pitched staff against each other

Fundamental principles of performance management

• Employees should be clear as to the requirements of their role and the standards expected of them.

• An individual should have a clear understanding of where they fit into the business.

• Appraisals should be used to motivate staff and highlight areas for improvement making a more productive and structured workplace.

• Managers should be fully trained to manage performance effectively: support and coaching; difficult conversations and disciplinary action.

7

Feedback to Win!

HAT were the actions and behaviours?

What was done & said – and how?

MPACT on the business, client, individual, relationship?

EXT

What needs to happen to WIN bigger next time?

Keep/ Stop/ Start? Learn? Do?

8

Observations and facts versus inference

Things that you seeOBSERVATIONS

FACTS

INFERENCES

Things you know

based on data

Conclusions, usually

about someone’s personality, intent, etc.

Identifying and assessing underperformance

CONDUCT

“CAN’T” “WON’T”

UNDERPERFORMANCE

CAPABILITY(RELATIVE OR ABSOLUTE)

Need to assess

HEALTH MISCONDUCTGROSS

MISCONDUCT

Need to identify

What is the issue?

Performance management tools

• “An employer should be very slow to dismiss upon the grounds that the

employee is incapable of performing the work which he is employed to do

without first telling the employee of the respects in which he is failing to do his

job adequately, warning him of the possibility or likelihood of dismissal on this

ground, and giving him an opportunity to improve his performance.” - James v

Waltham Holy Cross UDC [1973] IRLR 202

• Set clear standards from the outset and keep them under review

Performance management tools• Making use of probationary periods:

New recruits• assess the employees' suitability for the role• limited exposure to claims• terminable on short notice

• probationary period and right to extend probationary period clearly communicated

• reasonable appraisal process

Existing employees• those promoted to a new role

• probationary period clearly communicated and consideration re what if employee does not pass probationary period

• reasonable appraisal process

Performance management tools• Appraisals:

• Invaluable in motivating staff

• Appraisals should be conducted honestly, reflect true performance and identify training needs and performance targets

• Important evidence – it is extremely difficult for an employer to claim he acted fairly if he fails to carry out a proper appraisal of the employee’s performance

• The need to appraise and give guidance to probationary employees has been recognised as a specific contractual obligation - White v London Transport Executive [1981] IRLR 261.

Performance management tools4 key steps:

1. Careful appraisal of performance and discuss criticisms

2. Warn employee of consequences of not improving

3. Give employee a reasonable chance to improve

4. Have you fulfilled responsibility to create conditions which enable employee to carry out duties satisfactorily (e.g. adequate support and training)

Performance management tools• Training and support.

• Financial incentives/penalties – and risks e.g. performance bonus to reward high performers / curtailing pay rises or bonuses for underperformers.

• Non-financial rewards for good performance – e.g. recognition, status.

Case study

The Story.......

• Norma is an IT support analyst with Banking Word Plc, an investment bank.

• Norma is in her mid 60s, she is one of the company's longest-serving employees and has a clean disciplinary record.

The Story.......

• David, is Norma’s team leader and has recently joined the company. He arranges a meeting with the HR Manager as he has some issues with Norma’s performance following complaints from colleagues that she does not pull her weight.

• David is of the view that Norma’s poor performance has been a problem for some time but the previous team leader did nothing about it. There is no documentation in support of this.

Questions

1. Can David initiate disciplinary action for poor performance against Norma?

2. What is the first step?

3. What is a reasonable investigation?

4. What happens after the investigation?

5. What mitigating factors should David consider?

Questions

• 6. If Norma’s poor performance is due to capability what should David do?

• 7. What can the employer do if Norma’s performance does not improve?

• 8. Based on the facts what else might be relevant?

Case study

Red flags• A single act of incompetence:

• In most situations employers are expected to investigate and consider offering support to facilitate improvement before they can reasonably contemplate dismissal

• An employer is entitled to protect the interests of his business: “Cases can arise in which the inadequacy of the performance is so extreme that there must be an irredeemable incapability. The opportunity of improvement may be of no benefit to the employee and may constitute an unfair burden on the business.

• Some failures can warrant dismissal. A failure by a senior employee to comply with financial reporting requirements warranted instant dismissal in an established case.

Red flags

• “Can’t do vs. won’t do”

If you continue to offer training and support when in fact the employee has received reasonable training and support and their continued failure to perform can constitute misconduct.

•Incapable of changing – A warning may be unnecessary for someone who is ‘constitutionally unable to alter their ways’

•Unwilling to change –In some cases it may be reasonable to dismiss at once, especially if someone refuses to follow prescribed processes.

Red flags

• Dealing with an employee whose behaviour improves until after warnings have expired

• Where a pattern emerges or there is evidence of abuse this should be borne in mind when deciding the warning period

• Longer warning periods of 6 or 12 months may be appropriate

• Employee should be told that there needs to be sustained improvement even after the warning expires

Red flags

• What is a reasonable opportunity to improve will depend on the particular circumstances:

• Consider length of service, status, past performance

• Senior employees – each case depends on its own circumstances but the ET is more likely to find that a senior employee would have been aware from the circumstances that his role was a risk and a specific warning was not required.

Red flags• Discrimination issues:

• Avoid disparity of treatment

• Maintain a fair and consistent approach in line with internal policy and ACAS guidance

• Avoid dealing with underperformance in an aggressive or heavy handed way as this can lead to discrimination or constructive dismissal claims

• Hilton Hotels International (UK) Ltd v Protopapa [1990] IRLR 316 – claimant found to be humiliated, intimidated and degraded to such an extent that she had been constructively dismissed by reason of the employer’s conduct

Red flags• Difficult conversations

• Prepare• Get advice or support• Do not avoid the conversation by using email when face to face or

telephone communication is more appropriate • Hold meetings in private• Maintain eye contact• Be tactful and not accusatory• Offer help – don’t just criticise• Keep on track • Listen carefully• End on a positive• Follow up appropriately

Without Prejudice/pre termination discussions

• The Enterprise and Regulatory Reform Act 2013

• The principle: ‘without prejudice’ conversations prevent written or oral statements made in a genuine attempt to settle the dispute from being used as evidence in court.

• When does it apply: if there is a formal dispute –will often not apply before employment has ended.

• The risk: that the employee could use the approach to trigger or support an unfair or constructive unfair dismissal claim.

• Caution!

• Only in ordinary unfair dismissal claims

• Must be no improper behaviour or undue pressure

ANY QUESTIONS?

Managing

Performance

Performance Management

“When a team outgrows individual performance and learns team confidence,

excellence becomes a reality.”

Joe Paterno

How can we measure performance?

360 Degree Feedback

What is performance development?

It’s about alignment

Objectives for performance development

• Identify areas of competence

• Assess individual performance against competencies as well as objectives

• Provide an opening for discussion about performance and development

• Provide a basis for personal and career development

• Agree long and short term objectives

Formal and positive process with no surprises

Have we reached our objectives?

PERCEIVED SITUATION

Hostile, unfriendly, antagonistic

Friendly, favourable

ACTIVE BEHAVIOURS

PASSIVE BEHAVIOURS

Dominance(POWER)

Compliance(POLICY)

Steadiness(PACE)

Influence(PEOPLE)

Marston’s Theory

- - - - - - - - - - - - - - - - - - - - - - - - -

Who are you?

FOCUS ON POWER AND AUTHORITY SEEKS DIRECTION

Who are you?

• Assertive

• Competitive

• Driving

• Forceful

• Inquisitive

• Self-starter

• Accommodating

• Hesitant

• Low decision need

• Mild mannered

• Non demanding

Who are you?

FOCUS ON PEOPLE AND RELATIONSHIPS SEEKS REALITY

Who are you?

• Communicative

• Friendly

• Influential

• Networker

• Persuasive

• Positive

• Verbal

• Probing

• Reflective

• Reserved

• Self conscious

• Serious

• Suspicious

Who are you?

FOCUS ON SERVICE/ SPECIALIST SEEKS VARIETY

Who are you?

• Amiable

• Deliberate

• Dependable

• Good listener

• Kind

• Methodical

• Persistent

• Thorough

• Active

• Alert

• Demonstrative

• Mobile

• Restless

Who are you?

FOCUS ON QUALITY/ TECHNICAL/POLICY SEEKS AUTONOMY

Who are you?

• Accurate

• Careful

• Compliant

• Logical

• Perfectionist

• Precise

• Systematic

• Firm

• Independent

• Persistent

• Strong willed

• Stubborn

So now we have a better idea of our own profile – how can we have

difficult conversations with different profiles?

Identifying Dominance:

• Drive

• Competitive nature

• Single-mindedness

• Self-esteem

• Assertive

• Direct

• Self-starting

• Blunt

• Forcefulness

PPA

Identifying Dominance:

• Drive

• Competitive nature

• Single-mindedness

• Self-esteem

• Assertive

• Direct

• Self-starting

• Blunt

• Forcefulness

• Pioneering

PPA

Communicating with Dominance:

DO:

• Argue facts not feelings

• Be clear and specific

• Provide alternatives

DON’T:

• Use too much detail

• Leave loopholes

• Take too long

PPA

Identifying Influence:

• Empathy

• Confidence

• Charm

• Optimism

• Persuasiveness

• Friendliness

• Verbalisation

• Positivity

• Emotion

• Rapport

Communicating with Influence:

DO:

• Ask opinions and ideas

• Be fun and fast paced

• Summarise in writing

DON’T:

• Talk facts and not feelings

• Be cold or argumentative

• Lose conversation control!

PPA

Identifying Steadiness:

• Dependability

• Self-control

• Predictability

• Patience

• Deliberation

• Amiability

• Persistence

• Calmness

• Listening

• Consistency

Communicating with Steadiness:

DO:

• Present logically & thoroughly

• Listen and ask questions

• Show sincere interest

DON’T:

• Threaten with repercussions

• Be too abrupt or pushy

• Force a quick decision

PPA

Identifying Compliance:

• Self-discipline

• Sensitivity

• Shrewdness

• Precision

• Caution

• Adaptability

• Perfectionism

• Conformity

• Strict

• Rule-orientation

Communicating with Compliance:

DO:

• Be systematic and organised

• Give information in writing

• Present specifics

DON’T:

• Be informal or too personal

• Be disorganised or vague

• Be confrontational

PPA

We provide people assessmentswhich empower businessesto transform and improve theperformance of their employees

Any Questions?

April Rose WatersConsultant

aprilw@thomas.co.ukwww.linkedin.com/in/aprilrosewaters

Any Questions?

April Rose WatersConsultant

aprilw@thomas.co.ukwww.linkedin.com/in/aprilrosewaters

Thank You

Bolt Burdon Solicitors Emma Peacock

E: emmapeacock@boltburdon.co.uk

T: 020 7288 4742

Kaajal Nathwani

E: kaajalnathwani@boltburdon.co.uk

T: 020 7288 4743