Employees performing badly: our top ten tips for effective performance management

I'm sure we all have sorry tales to tell about the difficulties (for all concerned) of managing poor performance. Here's one which the employment tribunal had to consider recently (in the case of Mrs Williams V Meddygfa Rhydbach Surgery):

- Mrs Williams was practice manager at a GP surgery. It was felt she had been "promoted beyond her ability". She made mistakes in her work, such as over-paying the caretaker by £12,000.

- Although concerns about Mrs Williams' work had been raised informally on repeated occasions over the years, no formal action had been taken and she had not had an appraisal in several years.

- Mrs Williams had very "difficult interpersonal relationships" within the practice, in particular with one of the doctors, Dr Smits. He would challenge and shout at her and, in one meeting, banged his hand against a door in frustration.

- Mrs Williams submitted a grievance accusing Dr Smits of bullying and harassment. It was not upheld and Mrs Williams resigned, claiming constructive unfair dismissal on the basis that the rejection of her grievance was the "final straw".

The employment tribunal acknowledged that there had been "genuine and evidence-based concerns" about Mrs Williams' performance. However, it upheld her claim and found she had been unfairly dismissed on the basis that she had been not been properly performance managed, had been bullied, and had not been given the opportunity to improve in an environment "free from oppression".

Some of the facts of this case almost feel like familiar friends, they come up so frequently in performance disputes: over-promotion; the failure to deal with long-standing issues; the resulting pent-up frustration in managers which can lead them to behave in wholly inappropriate ways; having to deal with a grievance in the midst of everything.

Handled badly, performance issues can be time-consuming, have a negative effect on morale and ultimately prove expensive for employers. On the other hand, a performance appraisal system that is diligently pursued by an employer can prove invaluable in motivating staff and provide important evidence of performance problems which can later be used to support a fair dismissal. So how do you get it right?

Here are our top ten tips for managers for effective performance management.

1. Set the standards early. One of the most important points in managing performance is that employees should be aware of the standards expected of them and should be assessed against those standards.

2. Don't duck the difficult issues. If you think it's hard criticising someone's performance now, that will be nothing compared to the pain of having to part company when their position becomes untenable. The ostrich approach will without doubt make your life harder later. Strive instead for openness, honesty and consistency.

3. But don't pre-judge the outcome. Often it's perfectly obvious from an early stage that someone just isn't going to make the grade, but people can and do turn their performance around. From an employment law perspective, the point is that you must address problems, offer any assistance that might be required and don't assume that their eventual departure is a foregone conclusion.

4. Prepare for the meeting. Good appraisals take time – expect that each appraisal may take around 3 to 4 hours including preparation, collating feedback, the meeting itself and writing up. Make sure on a practical level that you have properly reviewed the documentation, thought about the agenda and set aside enough time for the meeting itself. Ideally, block out enough time for immediate follow-up action as well e.g. writing up the notes.

5. Beware of halos and horns. Appraisers sometimes allow the rating they give to one characteristic to excessively influence their rating on other factors. The "halo" effect is thus where you decide the appraisee is very good on one front and then give that person similarly high markings for other criteria; vice versa for the "horns" effect. As much as possible, therefore, try to judge everyone on each criterion before moving to the next criterion. That enables you to consider appraisees relative to a standard or to each other on each criterion. Remember, feedback should be constructive rather than overly negative or positive.

6. Don't just emphasise the recent past. It's easy for both parties to focus too much on recent events, which can in turn distort the overall assessment. Bear in mind the period under review and try to ensure that all of it is adequately covered.

7. Set objective targets. Appraisals should be used to set realistic targets for the employee, against which they can be measured at the next appraisal. Objectives should be SMART: Specific, Measurable, Achievable, Relevant and Time Limited.

8. Follow up on action points. Particularly after a difficult appraisal, the temptation is to think "thank goodness that's over" and do little else. Make sure however the paperwork is properly written up (remember this is your first line of defence) and that any action points are in fact actioned. In particular, if you have offered particular support or training, or scheduled in additional review periods, ensure this happens!

9. Watch out for the paper trail. This cuts both ways; on the one hand you need some paperwork to show that you have flagged up problems and clearly explained the improvement required. On the other hand, beware the careless email in which, for example, you make the observation that this person has a cat's chance in hell of surviving in their role. One email is all it takes to blow apart a case completely.

10. Follow procedures! Ensure you are aware of the relevant procedures for managing capability issues should they arise and follow them.