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Where an employee is underperforming, it’s important to tackle the issue fairly and promptly. If the performance issues are minor, it’s best to deal with these informally by counselling and training the employee. Start by making sure they have an up-to-date job description which sets out their duties and responsibilities. If appropriate, set out the required standards of achievement for each duty. You can also conduct regular staff appraisals as a means of assessing performance.
Where the performance issues are more serious or are persistent, you’ll need to institute a formal performance-management procedure, which needs to comply with the ACAS code of practice on disciplinary and grievance procedures.*
The starting point is to investigate whether there are any underlying reasons for the employee’s poor performance, or whether it could be a misconduct issue rather than a lack of capability. If it is a misconduct issue, follow your disciplinary procedure instead.
Once you’re ready to proceed, write to the employee to arrange a formal performance-review meeting on prior written notice, and enclose full details of the poor performance issues and copies of any supporting evidence. Be aware that the employee has a statutory right to be accompanied at the meeting by a work colleague, trade union official or trade union representative.
At the meeting itself, discuss the problem objectively and give the employee a chance to explain their underperformance. Then discuss and set out the improvement needed and a reasonable timescale for achievement. Three months is a typical improvement period for non-managerial employees. You also need to make sure that any targets you set are reasonable and achievable and that you offer training, supervision and other support to aid improvement – the primary aim of the performance-review process is to improve the employee’s performance, not to dismiss them!
After the meeting has taken place, you should confirm your discussions in writing and you need to formally warn the employee that a failure to reach the required standards could lead to their dismissal in due course – this should constitute a formal performance warning. Give the employee a right of appeal against the warning. Thereafter, hold interim review meetings so you can discuss how the employee is getting on.
If the employee then sufficiently improves, your procedure is at an end. However, if they fail to improve to an adequate level within the agreed timescale, you’ll need to hold a further formal meeting along the same lines as the first. After that meeting, you’ll need to issue a final performance warning, confirming the further timescale for improvement and warning that a failure to improve to the required levels is likely to result in dismissal. Again, give the employee a right of appeal.
The three stages in a performance management procedure are normally a performance warning, a final performance warning and dismissal. So if the employee still fails to improve, you’ll need to follow the meeting procedure again before taking any final dismissal decision. In addition, at that stage, you should consider whether there’s any alternative employment within the business that may be more suited to the employee’s capabilities.
If you do dismiss the employee on capability grounds following a full and fair performance-management procedure, you should confirm that decision in writing, identifying the reason for dismissal and the date of termination of employment – you’ll need to give proper notice or pay in lieu of notice. Again, give a right of appeal.
Finally, if the employee appeals at any stage, you’ll need to hold an appeal meeting, preferably chaired by a more senior manager, and you should confirm the appeal decision in writing.
National Federation of Self Employed & Small Businesses LimitedSir Frank Whittle Way / Blackpool / FY4 2FE. National Federation of Self Employed & Small Businesses Limited (FSB) is registered in England, number 1263540