Last reviewed 7 March 2018

Dealing with poor performers is not difficult if you have a strategy, the paperwork in place, a clear view of what is going wrong and why, and you know how to deal with a poor performer fairly, says employment lawyer Gillian Howard.

Identifying what is going wrong

It is essential to identify what is going wrong. It could be:

  • lack of up-to-date skills

  • more training required

  • lack of aptitude

  • an unknown ill health problem

  • laziness

  • an attitude problem.

Identifying what is going wrong should be done by the line manager in the first interview of concern or “meeting without coffee”. At this meeting there should be an up-to-date job description, written targets and standards of performance and examples of the work being complained about. Once what is going wrong has been identified then the manager must determine why.

Measuring under-performance

It is very important to be able to measure performance and therefore deal with under-performance. There may be targets and objectives set at the annual or mid-year appraisal. There may be clear issues of incompetence by way of customer or client complaints. It is vital that the line manager has some base measure against which they make complaints of under-performance to one of their members of staff.

Why is it going wrong?

This question should be asked of the individual: “Why are you not achieving your targets, etc?” Then what they say should be tested or investigated.

For example if a sales representative is always late with his or her paperwork and/or expense claims and says that others have admin support and he or she does not, that should be investigated. If true, then admin assistance should be given. If not true, he or she should be told.

PIP

You should have a performance improvement procedure (PIP). This will detail giving performance improvement plans with details of short-term objectives and standards of performance, ie timescales etc.

Regular reviews

Once the PIPs are set, the line manager needs to review the PIP regularly, twice monthly or monthly. If some but not all the objectives are being achieved, the individual must be “warned” and encouraged to meet all the objectives set.

Warnings

If at the end of the first review there is not enough satisfactory improvement, the individual should be given an oral warning. At the next review if there is still no satisfactory improvement, a first written warning should be given, explaining what needs to be improved and the consequences of not improving. At the next review, a final written warning should be given if there is still no satisfactory improvement.

Training

It may be necessary to give the person who is under-performing some further training, eg on IT or new software, making expense claims, etc. It could be that their sales technique needs to be improved and by allowing them to accompany an excellent and successful sales rep, they can see how it is done, ie “sitting next to Nellie”.

The steps

There should be a proper appraisal system both annual and mid-year and warnings with agreed timescales and targets for improvement before appraisals. It may be regarded as unfair to wait until appraisal time to draw to the attention of the individual their shortcomings and failings.

The views of superiors and peers are often taken (360 reviews); other previous complaints, and specific instances as to the employee's failings, should all be taken into account in assessing the reasonableness of the employer’s decision to dismiss. Employers should keep accurate documents, signed and dated, at the time the issues arise.

Sick leave

If the individual is warned that they are going to be invited to a PIP meeting or has had a PIP meeting and that triggers sick leave (often “stress”), the PIP remains frozen in time, until they return. You may also have a special provision for Statutory Sick Pay (SSP) only in such a case — this will be a feature in a future article.

Maternity leave

Clearly where the individual has gone on maternity leave at the start of or in the middle of a PIP, it is frozen until she returns.

Extending the warning

Where some improvement has occurred, then extending the lifetime of the warning say from six to nine months is a reasonable next step.

Alternative job or demotion

Dismissal would not be held to be fair if there was a suitable alternative job available that the employee could do, but that option has not been explored. The employee should be offered the opportunity to apply for and be interviewed for that role in competition with all other internal candidates. Further, it may be fair to offer to demote the incompetent manager rather than to dismiss.

In Gair v Bevan Harris Ltd [1983] IRLR 368, the Court of Session held that dismissing rather than offering to demote an employee will depend upon whether the decision to dismiss falls outside the band of reasonable responses.

Dismissal

Finally if there is insufficient improvement after all the warnings, an employer is entitled to dismiss the employee with notice or pay in lieu of notice for “Capability”, under s.98 (2)(a) of the Employment Rights Act 1996 — the reason “relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do”.

In Polkey v AE Dayton Services Ltd [1987] IRLR 503, Lord Bridge held, “in case of capability an employer will not normally act reasonably unless he gives the employee fair warning and an opportunity to mend his ways and show he can do the job”.

In Cook v Thomas Linnell & Sons Ltd [1977] IRLR 132, the Employment Appeal Tribunal (EAT) held that “it is important that the operation of the legislation in relation to unfair dismissal should not impede employers unreasonably in the efficient management of their business”. The EAT went on to hold that: “the quality of management is an imponderable” which may be difficult to assess precisely, therefore when responsible employers have genuinely come to the conclusion over a reasonable period of time that a manager is incompetent, that is some evidence that he or she is incompetent although it is then necessary to look to see whether there is any other supporting evidence.

One-off serious error or serious incompetence or dereliction of duty

There are rare cases where one serious error or act of incompetence can be so serious that it warrants dismissal. For example in Alidair Ltd v Taylor [1976] IRLR 420, Captain Taylor landed his aircraft so recklessly that it did hundreds of thousands of pounds’ worth of damage and left the passengers with no confidence in that airline.

Here the EAT held that where a professional’s skill must be at the highest and the potential consequences of even the smallest departure from that high standard are so serious, just one failure to perform in accordance with those standards is enough to justify dismissal.

Protected conversations

Employers are always entitled to hold a protected conversation under s.111A of the Employment Rights Act 1996, for alleged incompetence in place of holding performance reviews and giving warnings. The rules for such protected conversations are tight and must be obeyed to the letter lest such conversations lose their protection.

Procedures and paperwork

Employers must:

  • have clear, up-to-date written job descriptions

  • hold Interviews of concern or meetings without coffee

  • hold PIPs

  • set objectives and standards of performance

  • hold regular reviews

  • provide the employee with clear and unambiguous improvement plans with target dates

  • give clear written warnings with targets, dates to achieve those targets and the consequences of not achieving.

Summary

An incompetent employee may be fairly dismissed when the employer has:

  • investigated the reasons for their shortcomings

  • given the employee a reasonable chance to improve

  • considered whether there is potential for improvement

  • assessed whether there is any suitable alternative job or possible demotion.

Except in cases of gross incompetence/gross dereliction of duty, it would be unlikely that an employment tribunal would find a dismissal as fair for one single error of judgment (see above).

Other factors

  • Laziness: for the lazy employee, where improvement may be possible, warnings should be given under the disciplinary procedure, clearly setting out what is expected.

  • Seniority: senior staff will normally be expected to have a better appreciation of expectations and would not need to be warned in as much detail. Dismissal of such employees may not require the same formalities and process as with more junior staff.

  • Length of service: new employees should be given a degree of latitude in relation to early failings and be allowed time to settle in. Conversely, staff with previous good record and long service will require employers to be sympathetic and patient if a long-serving employee starts to find new procedures or methods of doing a job difficult.

  • Gross incompetence: warnings would not normally be necessary for gross incompetence, where a warning would make no difference (eg where there is no realistic hope of improvement) or where serious consequences follow the act of gross incompetence.