Managing poor employee performance can be a sensitive and stress inducing challenge for employers, especially in light of developing employment law legislation and critical risk hot spots.

Whether poor performance arises from capability concerns, unmet expectations, or underlying issues such as health or training gaps, addressing performance issues promptly and fairly is essential to protect your business and support your people.

Policy and Compliance

Start by reviewing your internal performance management policy to ensure it’s current and compliant with ACAS guidance. If the policy is outdated or unclear, follow ACAS guidance as a minimum standard and seek professional legal advice to ensure all risks have been considered.

Preliminary Action

Before applying the policy, managers must ensure employees understand the required performance standards. Managers should provide support and encouragement to help employees meet expectations. Any early signs of declining performance should be addressed promptly through regular management conversations.

Investigation: Laying the Groundwork

If preliminary informal action is not appropriate or has been exhausted without resolution, before initiating formal action, conduct a fair and impartial investigation. Collect relevant performance data, witness statements, and compile an investigation report. Share the report with the employee and invite them to respond at an investigation meeting.

Top Tip: Consider whether poor performance may be linked to underlying factors such as health conditions or lack of training. Reasonable adjustments and support should be explored before formal action.

Next Steps: Deciding the Route

Once the investigation is complete, decide whether to take no further action or move to a formal process. If negligence or misconduct is found, a disciplinary route may be appropriate. Otherwise, a capability process with a Performance Improvement Plan (PIP) is likely the appropriate the next step to set clear expectations and maintain a structured response.

Performance Improvement Plans

A PIP should set clear, measurable objectives and timelines for improvement. Invite the employee to a formal capability meeting in writing, outlining concerns and the process that they can expect to be followed. After the meeting, confirm outcomes and appeal rights in writing. Typically, ACAS recommends a two-stage warning process before dismissal, but this should align with your internal policy.

Financial and Legal Risks

Failing to follow a fair and transparent process can expose your business to significant legal and financial risk, including claims for unfair dismissal or discrimination. To mitigate these risks, ensure every stage of the process is properly documented, decisions are evidence-based, and actions align with both your internal policies and statutory requirements. Consistency and compliance are critical to defending any potential challenge.

Final Thoughts

Performance management is challenging, but a fair and legally compliant approach protects your business and supports employees.

If you’re considering implementing a policy and process, or are facing dealing with an issue  and want to reduce risk, speak to a member of our team today: EmploymentManchester@h-f.co.uk

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