Problems in performance management

Eleanor Rogers


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February 13, 2023

Categories Employment Law Updates

Performance management can be time-consuming and often challenging for all involved, but it is vital for proper performance of the workforce. Statistics show that the vast of employees who receive weekly feedback are more engaged, yet most employers still use annual appraisals. During that time, performance can drastically dip requiring the need to use performance management process.

We look at the performance management process, common problems and highlight some alternative options.

First steps

ACAS guidance stresses that as a starting point, taking steps informally can often help resolve issues and prevent further action. It is important to:

  • try to understand the reasons why performance has dipped; and
  • take steps to support and improve the employee’s performance.

If this does not help, then it may be necessary to investigate more formally on the most appropriate next steps.

Which policy?

Often the first challenge is to determine which policy to use:

  • Capability – generally relating to the employee’s ability to do their job; or
  • Disciplinary – where there is misconduct such as calling in sick when they are not genuinely ill, or not following important rules, for example like a chef not complying with Food Hygiene requirements.

Clearly it is important to get this right, to make sure you follow the right procedure and increase the chances of any subsequent dismissal being fair.

Key steps

The purpose of a performance management policy and procedure is to give the employee the opportunity to improve within a given time frame, with suitable:

  • training – to help them do their job better; and
  • support – such as by making changes to their work pattern, or by providing counselling.

Time periods for improvement and the number of ‘chances’ or warnings under their policy will differ according to company policy, but the principle is usually the same.

Performance is assessed during the time period, typically of a month or two, and at the end of the period the manager meets with the employee to discuss this with them. If there has been sufficient improvement, the process is concluded. If not, a further time period is set with clear objectives, monitoring and support. Warnings can also be given for a longer duration of say 12 months. If the employee’s poor performance reoccurs in this time, the procedure can be started again but the employee will have fewer chances to improve before moving to dismissal.

It is usually only after the employee has exhausted their chances, without sufficient improvement, that it will be fair to consider dismissal. The employee should be invited to a meeting to discuss this. As with most dismissals, employers should consider any alternatives to dismissal, consider the employee’s side of the story and offer the employee the right to appeal against the dismissal.


Capability procedures often shine the light on disability. Employers should look out for any disability issues that may be relevant to the employee’s poor performance or the way the process is applied.

At all stages of the process, the legal obligation to make reasonable adjustments may arise. We can advise you further on the employee’s individual circumstances.

Common pitfalls to avoid

Common problems which can occur along the way include:

Employee goes off sick

We see a lot of cases where an employee goes off sick because they struggle to cope with the scrutiny and pressure of performance management, particularly if the poor performance has gone unchallenged for a long time. If the employee is absent for a significant time, the time periods for monitoring performance may need to be extended to take account of the time off. Again, be alert to any potential disabilities that may be relevant to the sickness absence.

Employee raises a grievance

Even when the process is handled as sensitively as possible, the employee may feel that their treatment is unfair and raise a grievance. Managers may regard this as a tactic to deflect or delay the performance management procedure or as showing that the employee is unable to take responsibility for weaknesses in their performance. Despite these concerns in many cases the grievance still needs to be addressed, particularly if the employee alleges that the manager ‘has it in for them’ or the process is discriminatory. This may mean delaying the procedure or, if possible, bringing in a different manager to carry out the performance monitoring.

Employee improves, but not for long

After the hard work of performance managing an employee, managers can be frustrated to find that the employee did enough to get through the process but once the monitoring stops, slips back into old habits. If the employee still has a live warning, the procedure can be restarted at a later stage, and it will be quicker to progress to dismissal. Otherwise, a lot of managerial time can get used up in keeping the employee on track and getting caught in a performance management cycle. Employers may consider if, on balance, it makes sense to make an exit payment to the employee to end their employment under a Settlement Agreement.

Alternatives to performance management

Prevention is better than cure. Robust recruitment processes may help ensure you have the right person for the job, but some employees give a great interview only to fail to deliver in the job. Make sure your contracts include a probationary period and use that time to properly scrutinise the employee’s performance. Furthermore performance should be reviewed regularly and consistently, celebrating strengths and identifying challenges, in order to nip any issues in the bud. The evidence shows that this increases engagement and retention.

If concerns arise about an individual’s performance and you think the situation is not rectifiable, remember that the employee cannot bring a claim for unfair dismissal unless you have employed them for at least two years. Until then, you can dismiss without the risk of an ‘ordinary’ unfair dismissal claim. However, employees can still bring an unfair dismissal claim if they can show that they were dismissed for a prohibited reason, for example that they ‘blew the whistle’ or they raised concerns about health and safety. Also, employees do not need two years’ service to bring a discrimination claim.

You could look at an alternative role for the employee that would be a better fit for them. Any move would need to be agreed with the employee. We can advise you on how to handle this scenario, as it could risk triggering a resignation and claim for constructive unfair dismissal, particularly if it is perceived to be of lower status.

Finally, if you wish to avoid the challenges of performance management, consideration could be given to signing up to a Settlement Agreement.

How we can help

We can help you navigate the performance management process and deal with the specific challenges each case brings up. For further information, please contact Eleanor Rogers in the Employment Team on 01227 763939 or



Please note: This article is for general information only and does not constitute legal or professional advice.