Managing poor performance can be awkward at the best of times but the increase in working from home can make it harder to have difficult conversations and hold people to account. However, now that remote working for many is set to continue through the winter, it is important that any concerns are tackled to avoid storing up problems for the long run.
Irrespective of how or where someone is working, the basic principles for managing poor performance remain the same. Given that performance management can be an emotive issue, it is important that employers apply these principles fairly, especially if conversations are taking place over a computer. Getting it wrong risks various claims - most obviously unfair dismissal (for those with two years’ employment) but also potentially discrimination and breach of contract claims.
I set out below points to bear in mind when dealing with employees whose performance does not meet the expected standard. For top tips on managing performance effectively before performance issues have arisen, see my colleague Amy’s article here.
1. Deal with poor performance at an early stage
You’d be forgiven for preferring to postpone addressing an employee’s poor performance until we all return to “normality”, or at least to the office on a more consistent basis. However, letting matters drift is risky, particularly in circumstances where many of us won’t be returning to the office (at least full time) for quite a while. When managing the performance of remote workers, it will be particularly important to maintain regular and potentially more frequent conversations with employees. Use these to give feedback, try to understand any issues and be clear about goals and expectations. Communication is key in any performance process, but will be even more so when employees are working in isolation, away from the office.
2. Fair reason and fair procedure
Where poor performance can’t be resolved informally, you will need to address it formally. By way of reminder, to avoid a claim for unfair dismissal, you’ll need both:
- a fair reason to dismiss; and
- to follow a fair procedure.
Capability is a potentially fair reason for dismissal, but even if you show that capability is the fair reason for dismissal, you still need to show that your decision to dismiss was reasonable ie that you genuinely and reasonably believed that the employee was incapable of doing their job to the required standard. To show this, you will need to follow a fair procedure to reach your decision. You should follow the basic principles of the Acas Code of Practice on Disciplinary and Grievance Procedures, in addition to any capability procedure your organisation might have.
I discuss various elements of a fair capability procedure in more detail below.
3. Ensure the employee understands the standard expected of them
Make sure you draw this to their attention from the outset of employment, during any performance management process and (if necessary) for the purposes of a capability procedure. Appraisals will be key here.
For a fair capability dismissal, you’ll need to show that you “honestly believe on reasonable grounds that [the employee] is incapable or incompetent”. This will be shown via a reasonable investigation, top tips for which are:
- Make sure capability is the reason for the issues in question – is anything else at play that needs to be addressed instead of, or in addition to, capability? eg ill-health, poor management, excessive workload or anything which might be exacerbated by the coronavirus pandemic, eg caring responsibilities, anxiety or struggling to adapt to working from home etc.
- If disability is the reason for / an exacerbating feature of poor performance, remember that you will need to comply with the Equality Act to avoid a claim for disability discrimination. You may, for example, need to consider reasonable adjustments to remove/minimise any disadvantage suffered when assessing performance.
- Capability or misconduct? There is the potential for overlap so make sure you follow the right procedure. Generally speaking, capability covers cases where there is no intent on the part of the employee eg despite trying their best, they still don’t meet the required standard. Where cases involve negligence or carelessness, or employees deliberately not carrying out their job properly (eg because they are always on social media), these may be more properly dealt with as misconduct.
- What evidence will you gather? Most obviously appraisal data, but potentially also evidence from line managers / direct reports / the employee themselves.
If as a result of the investigation you decide to initiate a formal capability meeting, you will need to invite the employee to and then hold a capability meeting, to which they will have a right to be accompanied. Before and during the meeting, it’s important that you make them aware of the performance issues, evidence and potential consequences if the issues are upheld. You should also give them a reasonable opportunity to improve.
You’ll need to tell the employee your decision and provide them a right of appeal. Only rarely will poor performance (in the absence of any wilful element) be serious enough to justify instant dismissal for a single act of incompetence (although inherently hazardous roles may be an exception). More likely your performance procedure will be staged, allowing employees time to improve. The Acas Code recommends at least two warning stages before a performance-related dismissal (unless there is gross negligence or dismissal arises during a probationary period). If the employee appeals the decision, the same principles for the capability meeting will apply to handling any appeal, reaching the decision and informing the employee of the outcome.
7. Improvement period
Employees should be given a chance to improve, so any warnings should be accompanied by clear improvement measures which they should meet within a reasonable period to avoid any further formal action (eg targets or objectives with set review periods). You want to avoid the reviews being overlooked, so set diary dates! It is important to ensure that any targets set are achievable, to avoid allegations that you are setting the employee up to fail. It’s also important to offer any appropriate support and/or training with a view to helping the employee improve their performance - failure to do this could render the process unfair.
8. Time limits for warnings
Generally performance warnings should only remain “live” for a certain period of satisfactory performance and should be disregarded thereafter so that performance decisions are not based on expired warnings. But what if an employee has satisfactory performance throughout the warning period, only to lapse very soon after it expires? Acas recommends examining whether a pattern of similar behaviour is evident and/or if there is evidence of abuse, and taking that into account when deciding how long any subsequent warning should last. In those circumstances it may reasonable to impose a longer than normal period for a warning to ensure that any improvement is sustained.
If a final warning is not sufficient to improve performance within the timescales set, it may warrant dismissal (following an investigation and hearing, as detailed above). But before making the decision to dismiss, you should consider if other penalties might be appropriate / possible under the employee’s contract (eg demotion, loss of seniority, or some other alternative employment (if available)). If none are appropriate, a dismissal for poor performance will usually be with notice and the employee must be given the right to appeal any dismissal.
10. Managing a poor performance procedure remotely
Even in the midst of a global pandemic, where we are all being forced to operate in a manner different to the norm, the basic legal principles and procedural requirements for managing poor performance continue to apply. So employers should seek to adapt their internal procedures to apply remotely as much as they can. For practical advice on how this might be managed, see our blog post on virtual workplace investigations.
If you require further information about anything covered in this blog, please contact Tabitha Juster, or your usual contact at the firm on +44 (0)20 3375 7000.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, October 2020