Employee Life Cycle: Step 6 Capability and Performance Management

  1. Why is managing performance important?

Managing your employee’s performance is important as:

  • It is central to the relationship between managers and employees;
  • It can be a key element of good communication;
  • It fosters the growth of trust and personal development; and
  • It is central to how well your employees will be engaged in their work, and how well they will perform.

If your employees are engaged in their work, they are more likely to be doing their best for your organisation.

An engaged employee is someone who takes pride in their job and shows loyalty towards their Line Manager, team, and/or organisation and goes the extra mile, particularly in areas like customer service, or where employees need to be creative, responsive, or adaptable.

  1. Identifying performance issues

 If you have concerns about an employee’s performance you should:

  • Undertake an assessment to decide if there are grounds for taking formal action;
  • Review their personnel file, including any appraisal records;
  • Gather relevant documents;
  • Monitor their work;
  • Interview them; and
  • Interview others confidentially.

It is essential that you investigate the reasons for underperformance. You should try and find out if there are any external or internal reasons for an individual’s poor performance. Have there been changes in the Company? Do they have a new Line Manager? Are they unsure of the work that is expected of them now? Have they lost confidence in their abilities? Or are there personal factors which are impacting on their work? For example, an employee may have had a recent bereavement you were not aware of or their child may be ill or their health may have deteriorated. Knowing the cause of the poor performance is key as this will help you decide how best to tackle it.

  1. Informal and formal approaches

 First instance and minor instances of capability should be dealt with informally through counselling or training. They should be addressed with their Line Manager as part of their day-to-day management. You should keep a note of any such informal discussions on the employee’s personnel file. These should be ignored for the purposes of any future capability hearings.

Informal discussions may help:

  • Clarify the required standards;
  • Clarify the level of performance expected;
  • Identify areas of concern;
  • Establish the likely causes of poor performance;
  • Identify any disabilities that may be affecting the employee’s performance;
  • Identify any training, or supervision needs; and/or
  • Set targets for improvement and a time-scale for review.

The formal procedure should be used for more serious cases, or in any case where an employee has failed to improve an informal warning. An employee would not normally be dismissed for performance reasons without previous warnings. Dismissal without previous warnings may be appropriate for serious cases of gross negligence. At all stages of the procedure an investigation should be carried out.

  1. Considerations during the process

When carrying out a capability or performance management procedure there are certain considerations which need to be thought about during the process. These are:

  • Disabilities – You must consider whether the unsatisfactory performance is related to a disability. If is then consider whether there are any reasonable adjustments that could be made, or making other working arrangements such as changing duties or providing additional equipment or training. You may even need to make amendments to your capability procedure. You should enquire whether they have any medical conditions which require adjustments.
  • Confidentiality – Aim to deal with performance matters; sensitively, with due respect for the privacy of the individual, and to treat any information confidentially. You must notify all involved in the process that they must treat any information communicated to them as confidential during this process. You should also normally tell the employee of the names of the witnesses whose evidence is relevant to their capability hearing.
  1. The purpose of the performance review meeting

 The purpose of the performance review meeting is to:

  • Set out the required standards that you consider the employee has not met, and go through any relevant evidence that you have gathered;
  • Allow them to ask questions, present evidence, call witnesses, respond to evidence and make representations;
  • Establish the likely causes of poor performance (including any reasons why any measures taken so far have not led to the required improvement);
  • Identify whether there are further measures, such as additional training or supervision, which may improve performance; and
  • Where appropriate, discuss targets for improvement and a time-scale for review.

If dismissal is a possibility, you should establish whether there are any further steps that could reasonably be taken to rectify their poor performance, and to establish whether there is any reasonable likelihood of the required standards of performance being met within a reasonable time, and to discuss whether there is any practical alternative to dismissal, such as redeployment to any suitable available job at the same or lower grade.

  1. Preparing for a performance review meeting

Before a formal performance review meeting you should ensure that your properly prepare for it. One of these preparations should be writing to the employee to invite them to attend the meeting. Your letter should;

  • Inform them of the date, time, and place of the capability hearing, as well as who will be present;
  • Give the employee the right to be accompanied;
  • Give them copies of any relevant documents and provide sufficient information to enable the employee to prepare their response, you should also ensure that sufficient time is given to do this;
  • Provide a copy of any relevant witness statements, except where a witness’ identity is to be kept confidential, in which case you should give the employee as much information as possible while maintaining confidentiality;
  • Provide a copy of the capability/performance management procedure or information on where it can be accessed;
  • Give the employee warning that a possible outcome might be a formal sanction under the relevant stage of the company’s performance review procedure (including, where appropriate, dismissal); and
  • Ask the employee to let you know if any reasonable adjustments need to be made in order for themselves or their companion to attend.
  1. During the meeting

During the meeting the employee should be given an opportunity to answer any allegations of poor performance or capability issues against them. They should be given the opportunity to provide any evidence and call any witnesses that can help them put their point of view across. The meeting should usually be carried out by the employee’s line manger but remember that you will need to have someone who is kept out of the process so there is someone to conduct the appeal should there be a need to. It is also best to have a note taker to take down minutes of the meeting which should be written up and then agreed by both parties. Where you have witnesses that are provided evidence against the employee, the employee should be given the opportunity to respond to any information given by the witness.

If any new evidence is presented, then the meeting should be adjourned so that this can   be investigated further by yourself or to allow the employee time to review the new evidence. You should give the Employee a reasonable opportunity to consider any new information obtained before the hearing is reconvened.

At the end of the meeting, you should adjourn the meeting and inform the employee of you next actions and when and how you are going to give the employee the outcome of the hearing.

  1. Set realistic targets and objective criteria

It is vital that employees know what is expected of them in relation to both specific and general targets. So set realistic targets and help employees achieve them within a sensible time frame by providing appropriate training and other support.

Objective criteria such as sales targets will help you assess performance, however, beware of comparing individuals with each other. Comparisons with performance in previous years can also be risky as the business climate may have changed or other circumstances may have changed. Sometimes performance is hard to assess which is why it is essential that you use a proper, fair and consistent process.

You will need evidence that the employee is, in fact, incompetent and underperforming.

  1. Give warnings

 If, after investigating and receiving support, an employee is still not reaching expected standards, it may be necessary to resort to issuing warnings. This should begin with a warning indicating how they are failing to achieve and what is required of them. They should then be given time to improve. The length of this period will depend on such factors as the employee’s length of service and the extent to which they are underperforming. Instant dismissal for poor performance can be justified however only for something extreme.

Generally speaking there are three stages to capability or performance management. These are:

  1. Stage 1 – first written warning or improvement note;
  2. Stage 2 – final written warning;
  3. Stage 3 – dismissal or redeployment.

It is also important to note that at each of the above stages the employee will have the right to appeal the decision.

  1. Common mistakes when dealing with capability and performance management issues

Listed below are the common mistakes that employers make during the capability and performance management procedure.

  • Ignoring poor performance or capability issues. The longer you leave performance or capability issues the more difficult they are to manage. If you tackle them as soon as they occur, you are more likely to resolve them satisfactorily.
  • Not making employees aware of what is expected of them. If you don’t know what is expected of you in terms of performance, then you will never know if you are performing well or underachieving. Suddenly being told that you are not performing when you are not aware of expectations can be very demoralising.
  • Thinking that a yearly appraisal constitutes performance management. Yes, appraisals are part of the process but managing an employee’s performance means much more than just yearly appraisals, especially for employee’s who aren’t meeting expectations.
  • Being critical without being constructive. If you are constantly berating an employee without offering any ways in which they can improve can be very demoralising and could potentially lead to a claim being brought against your company.
  • Treating everyone the same. Whilst you do need to ensure that you are making objective decisions there are some instances in which you need to consider whether there are any extenuating circumstances which may be the root cause.

Do you think Health & Safety is just common sense and anyone can do it?

Looking after a company’s Health & Safety is no easy-going job and this is where we can help. It is a vital part of your business that needs to be considered to protect not only your company but more importantly your employees and your visitors.

The Health & Safety Executive (HSE) have quoted the following figures for work related injuries in 2014/15:

  • 142 workers were killed at work
  • 611,000 workers sustained non-fatal injuries at work
  • Of these 611,000 workers, 152,000 workers spent over 7 days absent from work
  • An estimated 4.1million working days were lost due to workplace injuries

These figures are difficult to ignore and clear to see it takes more than just common sense to avoid an accident.

Health & Safety is the most important aspect for all companies to get right in a bid to help mitigate risk and improve compliance. It doesn’t need to be complicated but areas cannot be overlooked such as:

Did you know that any business must get help from a competent person to enable you to meet the requirements of Health and Safety law?

Your appointed competent person can either be an employee supported by an external Health & Safety resource or purely an external Health & Safety company.

By appointing Agility Risk & Compliance you will have peace of mind that your company’s needs are met with a good balance of training, skills, experience and knowledge, a complete package tailored to your business.

We also provide a 24/7 Advice Line where our dedicated consults can advise and support you 24hours a day, seven days a week, 365 days a year.

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Employee Life Cycle: Step 5 Development

  1. How can learning and development help your organisation

Developing your employees is a long-term process consisting of learning and training that can help your members of staff to acquire skills and knowledge through a variety of different methods. Developing your employees’ abilities and skills can have numerous different benefits to your organisation. Some of the benefits that can be afforded by investing time and money into your employees are:

  • Achieve business objectives – you may be lacking the skills necessary in order to achieve your business or departmental objectives. Developing your employees can help your organisation gain these skills and therefore achieve your objectives;
  • Win contracts – some potential clients may require you to have specific qualifications or skill sets. Developing your employees can help to gain these skills and may put you in a better position to win the work;
  • Motivate employees – Investing time and money into your employees can motivate them and make them more loyal to you. If you are investing in them, they are more likely to invest in you;
  • Improve employee retention – motivated, happy employees that feel valued are more likely to stay with you than ones who aren’t happy in their roles;
  • Reduce risks within your organisation – in order to reduce H&S risks, or tackle unwanted behaviour in the workplace, a level of training may be needed; and
  • Increase your employer brand – by presenting your company as one that invests in its people can help portray you as a desirable company to work for. This can help you become an employer of choice and is likely to increase the level of candidate that you get applying for vacancies.
  1. Methods of development

There are many different approaches that you can take when developing your employees, there are also different situations in which learning can take place. The main categories that need to be considered are:

  • Internal or external. The development action can either be implemented by someone internally, i.e. another employee or manager, or externally by an outside organisation. The aims of the development action and the skills that already exist within your organisation will determine which is the most appropriate.
  • Group or individual. The development action can either take place as a group or on a one-to-one basis. This will obviously depend upon how many people require to take part in the learning.
  • At the place of work or away from the place of work. The development action can either take place at the place of work or away from the place of work. Classroom learning can be useful for theoretical learning, whereas learning in the work place offers a much more hands on and practical approach.
  • Formal or informal. Whenever you decide that there is learning that needs to take place and implement a plan to action this learning, this will always be formal learning. Whilst you cannot have ultimate control over informal learning you need to be aware that it does take place. You need to also take actions to ensure that the informal learning does not contradict your policies and procedures. Informal learning will happen between colleagues and whilst can be useful, sometimes bad habits can be passed from one employee to another, which can be problematic.
  1. Internal methods of development

As was mentioned [yesterday?] there are both internal and external methods that can help to develop your employees. The different types of internal methods are:

  • On-the-job training. This is usually done one-to-one or in small groups in the work environment so that the learner can get a hands-on experience. The trainer will often show the learner how to do the task, then the learner will be observed and directed whilst carrying out the task. It is important that the person who is passing across their skills is following the correct procedures for the tasks and isn’t cutting corners. This is especially important when it comes to health & safety issues.
  • Coaching and mentoring. Coaching and mentoring is a great way for employees to learn from each other. A mentor can pass across knowledge about the company and the role and can offer support and guidance when it is needed. It can be a great way to develop employees so long as the mentor has the time and is invested in helping develop their mentee. It can also be a positive and rewarding experience for the mentor.
  • Job rotation, secondment, and shadowing. All these methods of learning can be incredibly beneficial to the learner and the organisation. The process can help to create discussions and for new ways of thinking to be developed. However, if an employee is in another department for a long period of time then you need to ensure that that employees workload is being taken on by someone else. This may mean that it is shared amongst the rest of the department if they have the capacity to do so, just remember not to overload anyone with additional work.
  1. External methods of development

As was mentioned previously there are both internal and external methods that can help to develop your employees. The different types of external methods are:

  • External courses can help develop or introduce skills that are not already in your organisation or are too complex for people within your organisation to deliver. They also can create a protected time for learning where the learner doesn’t have to worry about ensuring that they are doing their usual role whilst also trying to concentrate on the learning or have to do it in their own time.
  • Formal education and qualifications. Formal education and qualifications can help the learner gain vast amounts of knowledge around a specific subject area. They will also usually provide the learner with some sort of accreditation which may either be a legal requirement or can help when taking on new work. These causes may not suit every learner.
  • Outdoor learning. Outdoor learning, such as orienteering courses and other outdoor type activities, can be very useful for team building and leadership development. These types of learning help to develop softer skills, such as, team work, leadership and other skills that aren’t necessarily connected to a particular role within your organisation. In it is important that you do not use an outdoor learning activities that will exclude anyone from participating.
  • Distance learning and e-learning. Access to distance learning and e-learning is flexible and can be done at the learner’s convenience. Whilst this can be a major advantage to this type of learning it can also be its biggest downfall. Some learners may find it difficult to put aside the time in order to complete the learning. It is also more difficult to ask questions and check understanding than face-to-face learning.
  1. Which method is best

Over the last couple of days, we have talked about the different methods for developing your employees. But which method is best? There isn’t a one size fits all answer to this. There are both organisational and learner considerations which need to be thought about when deciding which method is best.

The organisational considerations which you need to think about are:

  • The nature of the learning need;
  • The priority of the learning need;
  • Organisational culture;
  • Previous learning and development interventions; and
  • Budget available.

The learner considerations which you need to think about are:

  • Occupation and seniority of the learner;
  • Demands of the leaner’s job role and home life
  • Qualifications and educational background of the learner; and
  • Learner preference.
  1. How to justify

Spending on employee development is often not a major priority for organisations and is often the first thing to be cut during times of economic difficulties. Therefore, if you are wanting to spend time, money, and other resources on developing employees it is likely that you will need to justify this spending.

In some instances, the justification may be that it is a legal requirement. In cases like these it is likely to be easier to get the spend to be signed off. However, non-mandatory training may be a little bit more difficult to convince the powers that be that the development is needed and worthwhile. Therefore, you will need to be able to justify this spending. In order to do this, you should take the following steps.

  • Identify an issue;
  • Identify learning activities that could fix it; and
  • Create a business a case.
  1. Identify an issue and a solution

All organisations, no matter how well they are run, will have issues or problems which they need to overcome. In some situations, development actions can help to overcome these issues. Before you can determine this however, you need to understand the underlying cause for the issue. For example, you may have noticed a drop in productivity which may have been identified through a variety of KPI’s. The figures can show you that something is wrong but it cannot always explain the cause. A common cause for a drop in productivity is demotivated employees that feel undervalued.

Once you have established the underlying cause you can then look for a solution. Sometimes this may be something quite simple where processes and procedures need to be tweaked, in other instances development activities may help to rectify the problem. If a realistic solution is development of employees, you should then decide on the most appropriate method of learning for this. The things that need to be thought about here are the organisational and learner considerations and whether any development actions have previously taken place and if they were successful or not. This information can then help you to build a business case which we will be going into in more detail [tomorrow?].

  1. Create a business case

Once you have identified an issue and what development action could resolve it, you should then cost out how much the development action is likely to cost. You should take into account the cost of the activity, the time taken away from the workplace, and any additional factors, such as, travel and management time. Once you have done this you should create a business case that answers the following questions:

  • Why is the learning necessary?
  • How much will the learning cost?
  • When can you expect a return on the investment?
  • Do you really need to act?
  • Is there anything else that can be done?

You should also try and pre-empt other questions that may be asked of you when presenting your business case so that you have the information to hand to answer it. If you can prove that the development action is worthwhile to the organisation, then you are more likely to have it signed off. It is also important that you monitor the success of the action so that these can help to create your business case in the future.

  1. Training agreements

When you are putting employees on expensive and time consuming courses you may wish to ensure that you are reaping the rewards from your investment. There is a way in which you can do this, but you need to make sure that you have the necessary paperwork in place prior to the commencement of the development activity. If you want to recoup the costs of training courses in the event of an employee leaving then you need to put in place a training agreement, sometimes referred to as a training fee agreement. This ensures that you have the express written permission of the employee. Remember if you make deductions from an employee’s wages without their prior written consent this would be an unlawful deduction of wages.

However, there are certain instances in which you cannot use a training fee agreement. If an employee completes any mandatory training that they need in order to complete their role, then you will not be able to reclaim these costs. You also will be unable to reclaim costs for any health and safety training that the employee completes.

The training agreement should clearly lay out the terms in which the training is provided and in what circumstances training costs will be expected to be paid back by the employee. The repayment terms need to be reasonable and are usually on a sliding scale so that the employee pays back fees the longer they are with the organisation.

  1. Succession planning

Employees will come and go, this is the way that business is. However, there are times when someone leaving the organisation can cause turmoil and disruption. This is likely to be the case when someone senior, or with a specific skill set, leaves and there is no-one to take over their role. Obviously these roles can be filled via recruitment, however, forward planning can also help in these situations with the use of succession planning. Succession planning is the process by which you can identify and develop your current employees to fill roles where you know the current employee is likely to leave, whether this is because they have been promoted or they have expressed an interest to retire. It is vital that you remember that there is no longer a mandatory retirement age and therefore you should not assume that an employee is going to retire at 60, 65, or any age.

The employee currently in the role can help to mentor anyone who could potentially fill their role. This can help employees progress within the company and feel valued. It also means that if you recruit from within then the employee already knows the organisation’s norms, values, and processes. It can also help you to maintain skills and talent within your business as if an ambitious employee isn’t given the opportunity to progress within your organisation then they may look to move to an organisation where they can.

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Health & Safety Myths

Since the Health & Safety Executive (HSE) started the Myth Buster Challenge Panel they have been inundated with cases to review and we want to share some with you.

  1. Daffodils are a danger to the public
  2. Prams banned from children centre for H&S reasons
  3. Ban on conkers, yoyo’s and skipping ropes
  4. Hanging baskets banned incase people bump their heads
  5. Replacing park benches because they are 3inches too low
  6. Office workers banned from putting up Christmas decorations
  7. Office ban on paperclips
  8. School production cancelled as lighting operator hadn’t attended ladder training course
  9. Pork crackling taken off the menu as it may splash the chef
  10. School children ordered to wear clip on ties in case they choked

If you have heard of any other Health & Safety myths leave us a comment below we would love to hear about them.Blog divider RAC

Invest and conduct an investigation properly or face liability

Investigations are the backbone of your disciplinary and grievance procedure and your defence in an unfair or constructive unfair dismissal claim. An unfair dismissal or constructive unfair dismissal claim can be lost purely on the basis that you have failed to follow a fair process by not conducting a fair investigation. An investigation must take place prior to any disciplinary action to ensure that you do not fall foul of the ACAS code or the principles of fairness established by case law.

Investigations are an integral part of your disciplinary and grievance procedure. They are an essential part of the process and required to make a determination as to whether to proceed to a disciplinary hearing and/or whether to uphold a grievance. They should be conducted:

  • When managing conflict between individuals;
  • When an employee has raised a grievance; or
  • During disciplinary proceedings, for example, for misconduct.

Investigations are undertaken to:

  • Gather;
  • Establish; and
  • Assess the facts surrounding a grievance or disciplinary issue.

Whilst they are not part of the formal disciplinary hearing, they are an essential part of the process and are required to determine whether to proceed to a disciplinary hearing and/or whether to uphold a grievance. An investigation could establish that there is a perfectly plausible explanation for the conduct and determine that disciplinary action is not required. This is why it is imperative that, even in cases of obvious guilt that you should always investigate rather than launch straight into a disciplinary hearing or go straight to dismissal.

Procedural deficiencies in an investigation can lead to an unfair dismissal claim and therefore it is essential that investigations are carried out fairly and objectively.

The nature and extent of your investigation will depend on the circumstances and the seriousness of the matter. The Employment Tribunal will expect you to show that you have conducted a careful, fair and objective investigation where complaints are made by or about employees.

Please note that there is a distinction between an investigation and any subsequent disciplinary proceedings. For example, if an employee admits guilt during an investigative interview this will not remove the need for a further disciplinary meeting. A disciplinary meeting should be held so that the employee can have an opportunity to state his/her case and possibly bring evidence to explain any mitigating factors. Furthermore, whilst an employee has admitted guilt this does not mean that the investigation should stop. You may still need to investigate further particularly if they admit to the act but state that they were provoked.

The key principles to keep in mind

  • Be thorough and follow all leads;
  • Be open-minded and act without pre-judging – or appearing to have pre-judged – the issues;
  • Look for evidence for as well as against the employee’s case;
  • Keep the fact of the investigation as confidential as you can; and
  • Carry out the investigation promptly.Blog divider RAC

Employee Life Cycle: Step 4 Appraisal

1. Put a time in your diary, book a room, and notify the employee

Whilst I appreciate this may be common sense and sounds simple but as you all know meetings and priorities change. Meetings move around and the times change. Most employees are likely to be nervous about their review, or they may be waiting for the meeting to discuss things with you. Chopping and changing the time of the meeting hinders not helps as it can give the employee the impression that they are not important or a priority, that the appraisal is a waste of time, and it can cause a breakdown in the relationship before the meeting even starts. Managers and employees commonly dislike appraisals and try to avoid them. The appraisal is daunting and time consuming and such action only prolongs these feelings. The process is seen as a difficult administrative chore and emotionally challenging, so set the date and time and stick to it. The annual appraisal may be the only time you have had to sit down with your employee to have a meaningful one to one discussion.

Add an extra half hour both before and after the expected meeting slot to give you time to prepare and reflect on the meeting. It also gives you some grace if something crops up.

Pick a time that is convenient for everyone. Try to avoid deadlines for targets or projects that you or the employee may have. If not, it may lead to both of you being overly negative.

Ensure that you have a quiet free space to conduct the meeting where no one else can over hear you.

Send or give the employee the appraisal form and/or any self-appraisal form when booking the appraisal with them.

Make sure your employee understands the process particularly if they are new and they have never had an appraisal before.

 2. Manage the appraisal discussion so that both parties can effectively contribute

Give the employee a self-appraisal form and get the employee to summarise their thoughts on their performance ahead of the appraisal meeting:

  • This enables the employee to prepare for the meeting and it can aid your discussion as the employee will have reflected on the last 12 months as well as ahead to what they want to achieve and/or what they need to enable them to progress in the next 12 months;
  • The employee may think of positives and negatives about their performance which you may not have considered;
  • It gives them a chance to reflect and consider whether there are any issues or misunderstandings regarding their role;
  • For them to reflect on their accomplishments; and
  • Makes them consider any areas of their role they are experiencing difficulties with or that they would like support with to enable them to carry out their work more effectively or any training and development they would like to undertake.

You should gather the following information in preparation of the appraisal meeting:

  • Review goals set in the current period;
  • Review and familiarise yourself with the Company’s appraisal system;
  • Gather any feedback from the employee’s work colleagues/customers;
  • Have a copy of the employee’s job description and performance objectives;
  • Note any current disciplinary issues;
  • Ensure you have your notes of the employee’s performance since the last appraisal; and
  • Review the previous performance review.

This enables you to prepare for the meeting and it can aid your discussion as you have reflected on the last 12 months as well as ahead to what you need the employee to achieve.

3. Do not skirt over or fail to deal with any conduct or capability issues – address these

For example:

“Jon has an appraisal with Jess. Jon is reluctant to bring up Jess’ timekeeping. Jess is frequently late for work, however other than this she is a very good employee and a hard worker. Jon does not want to rock the boat with Jess so decides against raising the issue with her. Furthermore, Jon does not see the problem with her timekeeping given that she is a hard worker. So Jess has a good appraisal and is none the wiser that there are any issues with her time keeping. Jess continues to be late for work.

Another employee Ian on another team is also a hard worker but is also frequently late for work, however, his supervisor, Will, brings this up in his appraisal and Ian is given a warning and time limit within which to improve. Jess continues to be late and Ian finds out that Jess has not be reprimanded and Ian is aggrieved by this. He raises grievances and he states he is being treated unfairly due to his sex! Ian also becomes disruptive in work and his work starts to decline. It also causes problems between the teams.”

This example shows the affect your actions have in terms of employee relationships and how failing to deal with any misconduct, poor performance or capability issues can lead to grievances, it can cause difficulties in disciplining and even result in claims! This situation could have easily been avoided if Jon had addressed the issues with Jess at her appraisal.

Whilst it is not easy, and we appreciate that it is difficult, your actions or failures have consequences. Your actions can have consequences for the individual as well as for the Company.

Failure to address workplace issues when they arise can cause:

  • A reduction in work;
  • Grievances;
  • Disputes;
  • Disruption;
  • Unhealthy even toxic environment;
  • A break down in relationships; and
  • It can make it difficult to discipline the individual later on down the line.

4. Remember an appraisal is not just for you it is for your employees too

  • It is a time when employees can highlight any issues they are experiencing. For example:

“Jon undertakes Staci’s appraisal. During Staci’s appraisal Staci makes Jon aware of issues between her and Ali. Staci lists 20 incidents of Ali’s nasty behaviour towards her.”

  • It is a time for them to inform you of any accomplishments you may not be aware of or thought of.
  • It is a time for them to reflect on their strengths and weaknesses.
  • It is a time for them to inform you of any help or assistance they require.
  • It is a time for them to reflect on their Line Managers as well as the Companies strengths and weaknesses.
  • It is a time for them to express their visions for themselves as well as for the Company.
  • A time for them to indicate what opportunities they may be interested in or how they would like to progress and develop.
  • Ask for feedback – this is a valuable opportunity for feedback on your management style.
  • Ensure the employee can see that you are taking on board their feedback and lead by example by not becoming defensive when receiving feedback.

5. Remember it is a time for employees to understand how they are performing

Employees can get disheartened and lose motivation when they do not get feedback. They can become demotivated and disgruntled when they do not feel appreciated or know how they are doing. For example:

“You are in a bowling competition, with a £1,000 prize to the one with the highest score. There is a curtain halfway down the alley so that you can’t see the pins or the scoreboard. Tony bowls for about three frames but then becomes frustrated and losses motivation not knowing how he is doing. His bowling gets worse.”

Why do employees need to understand how they are performing?

  • To learn;
  • Perception;
  • To keep motivated;
  • To feel appreciated;
  • Clarity;
  • Refining our potential; and
  • Maximising returns.

6. Be balanced! Ensure that there are positives as well as any negatives. Do not view appraisals in isolation

  • Keep a record of positive and negative behaviour throughout the year. Keep a diary or notebook on the employee setting out accomplishments and issues.
  • Following the appraisal monitor the employee’s performance on an ongoing basis.
  • If you are happy with something an employee has done – tell them.
  • Positive reinforcement is a great tool to ensure an employee does what they have done well repeatedly.
  • Use what they have done well as an example when explaining how something else might be done better.
  • Be constructive – you should have had regular feedback conversations throughout the year, so nothing within the review conversation should come as a surprise. Revisit conversations you have had.
  • Do not just leave it to just before the appraisal.
  • Do not be completely negative it will leave the employee deflated, disheartened and it is likely to affect their motivation.
  • Do not let your personal feelings cloud your judgment.
  • Do not let a recent incident or event affect the appraisal.
  • Try not to be biased.
  • Do not rush the appraisal. Take the time to listen to your employee.
  • Do not just go through the motions to tick a box.
  • In order to be effective, appraisals should be conducted honestly, managers who provide unduly positive or flattering feedback, which does not reflect the employee’s true performance can cause problems for you later down the line and undermine your argument that there is a performance problem or issue with their conduct. It can lead to claims of unfair dismissal if the employee is dismissed for that action.
  • When you fail to tackle performance issues through an appraisal system this can hamper future business decisions in other respects, for example, redundancy situations where you want to give an individual a lower scope for performance or attendance but this is not corroborated by past appraisals.
  • Appraisals should not be seen in isolation but should be closely linked with policies and practices.

7. Set SMART objectives

Smart stands for:


  • Clearly state what is to be achieved e.g. increased time recording, sales, or production.
  • Consider what you want the employee to accomplish and why you want them to complete this task e.g. to improve profits.
  • This criterion stresses the need for a specific goal rather than a more general one;
  • This means the goal is clear and unambiguous.
  • To make goals specific you need to let the employee know exactly what is required.


  • The desired outcome is a number value that can be measured, e.g. increase time recording by 10%, increase sales by 15%.
  • Consider how this will be achieved and accomplished.
  • This criterion stresses the need for concrete criteria for measuring progress toward the attainment of the goal.
  • If the goal is not measureable it is not possible to know whether the employee is making progress toward successful completion.
  • Measuring progress is supposed to keep the employee on track, reach their target dates and enable them to show that they have accomplished what was required.


  • The employee is involved in discussing and agreeing the aim.
  • Consider how the goal can be accomplished and how realistic the goal is likely to be met with other commitments.
  • This criterion stresses the importance of goals that are realistic and also attainable.
  • Whilst an attainable goal may stretch a team in order to achieve it, the goal is not extreme.


  • The target is possible given the market conditions and the staff and financial resources available.
  • Consider whether the goal seems worthwhile, whether it is the right time, whether it matches your needs and whether they are the right person.
  • This criterion stresses the importance of choosing goals that matter to that employee and to their role e.g. sales is important to a salesman but not to a receptionist.
  • Relevant goals drive the employee, department and the company forward.
  • A goal that supports or is in alignment with other goals would be considered a relevant goal.


  • The target will be met within a given period of time e.g. 12 months.
  • Consider when the employee needs to complete the task.
  • This criterion stresses the importance of setting goals within a time frame i.e. giving them a target date.
  • A commitment to a deadline helps a team focus their efforts on completion of the goal on or before the due date.
  • This criterion is intended to prevent goals from being overtaken by the day to day issues that arise.

For example, a SMART objective would be ‘to increase time recording by 10% within the next 6 months.’ SMART objectives allow the performance of the employee to be assessed.

Jointly agreed and realistic targets are more likely to be met.

8. Follow-up

  • Following the appraisal complete the form ensuring both parties’ comments are on the form and give it to the employee for confirmation of the content and to add any comments. If any further comments have been made return the document to the employee for any final comments. Once they have reviewed and hopefully agreed both parties should sign the document. The employee should be provided with a copy of the appraisal and one should go on the employees file.
  • Following the appraisal monitor the employee’s performance on an ongoing basis.
  • Carry out agreed actions.
  • Follow up on anything you may have promised to do and encourage your employee to do the same.
  • Over promising and under delivering leads to a loss in credibility and demotivation when promises are not met.
  • If you determine that the employee is under performing arrange a separate meeting to discuss their performance and commence a performance improvement plan with them.
  • If you determine that the employee has undertaken an action that warrants disciplinary action arrange a separate investigation meeting.
  • If the employee has made comments that amount to a grievance invite the employee to a separate meeting to discuss their complaints/grievance.
  • Follow up and investigate any comments or feedback that you receive.
  • Help and ensure the employee is meeting their objectives.
  • Ensure any training promised is arranged and implemented.

9. Review the appraisal process

  • The appraisal process should be reviewed annually.
  • Get feedback from managers and employees regarding what is working and what is not.
  • The appraisal form should be amended and adapted to a form that works for all.
  • Make sure the appraisal form is giving you value and not causing you further problems.
  • Give managers training and ensure they are confident with the process.
  • Ensure staff understand the appraisal process.
  • Ensure you manage staff’s expectations in particularly if any bonus or salary increase is attached to your appraisal process.

10. Keep money out of it! 

We strongly recommend keeping money out of it. The majority of issues surrounding appraisals is as a result of attaching pay increases to appraisals or bonuses. It can lead to grievances, resignations, and discrimination claims.

Employees do not see the point in the appraisal process when they are not getting anything out of it, where they have not received pay rises for years despite their appraisal stating that they are performing above and beyond.

It can lead to grievances where one employee considers that they are doing exactly the same, or going above and beyond another employee but that employee scores higher than them and gets a 3% pay rise compared to their 1.5% pay rise. You then have to justify the difference and if you cannot do so it can lead to the employee resigning and you can lose a good employee.

We strongly recommend keeping it simple. Keep the appraisal process about performance and undertake a separate pay review. This avoids the appraisal process becoming a difficult time consuming process.

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Employee Life Cycle: Step 3 Contract & Handbook

1.Why do you have to provide a contract?

  • Section 1 of the Employment Rights Act 1996 states:
  • “Where an employee begins employment with an employer, the employer shall give to the employee a written statement of particulars of employment.” and
  • “The statement must be given no later than 2 months after the beginning of the employee’s employment.”;
  • It is a useful tool for managing staff effectively;
  • It prevents misunderstandings;
  • Employees will know what is expected of them; and
  • Failing to issue a written contract prevents you from specifying rules or conditions to which your employees must adhere.

A contract of employment is the beginning of a relationship between the employer and employee, so it is integral that the employment contract accurately sets the scene and expectation of both parties for the duration of the term. It is important to have well drafted employment contracts as an employer as this forms the foundation of the employment relationship you have with your employees.

Having well drafted employment contracts at the start can prevent time consuming disputes later on. It can also reduce the risk of grievances as each party is aware of their rights and duties. Should any issues arise then having well drafted policies can assist to effectively manage the issue to achieve resolution.

2.What should a contract contain?

  • Name of employer and employee;
  • The date the employee’s employment commenced;
  • The date on which the employee’s continuous employment began;
  • Pay and the intervals at which remuneration is paid (weekly/monthly);
  • Hours of work;
  • Holiday entitlement;
  • Holiday pay;
  • Job title or a brief description of the work the employee is employed to do;
  • Sick leave and pay entitlements;
  • Pensions and pension schemes;
  • Notice periods;
  • Where the employment is not intended to be permanent the period for which it is expected to continue or if it is for a fixed term, the date when it is to end;
  • Job location;
  • Whether any collective agreements affect the terms and conditions of employment;
  • If required to work outside the UK for a period of more than 1 month:
  • The period for which they are required to work outside the UK;
  • The currency in which remuneration will be paid;
  • Any additional remuneration payable to them and benefits they will receive; and
  • Any terms and conditions relating to their return to the UK.

3.Recommended contractual terms

To make your life easier as an employer there are a number of clauses which we recommend to include in your contracts to protect your position and make your life easier, for example, deductions from wages, payment in lieu of notice, and garden leave. We can provide you with a checklist of recommended clauses or we can review and update your contracts to make your job easier.

4.Failure to provide a written contract

If you fail to provide a written contract of employment an employee can make a claim to the Employment Tribunal. A failure to provide a contract can lead to an award of 2-4 weeks’ pay compensation in the Employment Tribunal. An employee cannot bring a standalone claim for a failure to provide a written contract of employment however they can tack it on to a substantive claim, for example, an unfair dismissal claim.

5.Common problems for failing to provide a contract of employment

Common problems for failing to provide a contract of employment are:

  • Misunderstandings;
  • Disgruntled/unhappy employees;
  • Stress;
  • Anxiety;
  • Anger;
  • Frustration;
  • De-motivation;
  • Absence from work;
  • Poor morale;
  • Poor employee relations;
  • Loss productivity;
  • Poor performance;
  • Insecurity;
  • Complaints;
  • Grievances;
  • Resignations;
  • Disputes;
  • Damage to reputation; and
  • Tribunal claims.

6.Changing particulars of employment

 If you make any changes to an employee’s contract of employment:

  • You must give the employee a written statement containing details of the change at the earliest opportunity;
  • No later than one month after the change (section 4 of the Employment Rights Act 1996).

You must inform and consult employees regarding any changes to their contracts.It is important that you inform and consult with your employees when making changes to their contracts of employment otherwise you could face a constructive unfair dismissal claim.

7.Why provide a handbook?

  • It is a matter of good practice;
  • It sets out the standard expected of employees;
  • To assist the running of the business;
  • To reduce legal risk by making sure employees and managers understand the legal rights and responsibilities;
  • A useful tool for managing staff effectively;
  • Prevents misunderstandings;
  • Prevents disputes/conflicts;
  • Can assist in disputes/conflicts;
  • Helps to ensure fairness and consistency;
  • Creates a structured work environment;
  • Helps build company loyalty;
  • Failing to issue a handbook prevents you from specifying rules or conditions which your employees must adhere to whilst they work and makes it difficult to enforce disciplinary action; and
  • An Employment Tribunal will look to your policies and procedures.


A handbook can be your downfall if poorly written as it can:

  • Create a hostile work environment; and
  • Legally bind you to promises you did not even intend to make if not careful.

Do not let the risks scare you off. With the right advice an employee handbook can establish a solid relationship between you and your employees but also one that keeps your best interests in mind.

A comprehensive staff handbook is essential for an employer as you can set out your policies, procedures, and rules in more detail. Prevention is always better than cure and a good employee handbook can do just that; avoid unwanted and unnecessary employment disputes, by clearly communicating an organisations policies and procedures.

Having well drafted handbooks at the start can prevent time consuming disputes later on. It can also reduce the risk of grievances as each party is aware of their rights and duties. Should any issues arise then having well drafted policies can assist to effectively manage the issue to achieve resolution.

Ultimately, employee handbooks need to be clear and user friendly otherwise the handbook will lose its effectiveness.

8.Compulsory policies required by law

  • Disciplinary procedures and rules;
  • Grievances procedures;
  • Information about pensions (if not in your contracts);
  • Health and Safety (if 5 or more employees);
  • Whistleblowing

9.Policies recommend for strong legal reasons

  • Bribery;
  • Equal opportunities;
  • Data Protection; and
  • Whistleblowing

10.Recommended policies

 We recommend that you have the following policies in place (please note that this is not an exhaustive list):

  • Equal opportunities;
  • Anti-harassment and bullying;
  • Dress code;
  • Expenses;
  • Data protection;
  • IT and communication systems;
  • Social media;
  • Homeworking;
  • Adverse weather and travel disruption;
  • Health and safety;
  • Sickness absence;
  • Stress;
  • No-smoking;
  • Substance misuse;
  • Anti-corruption and bribery;
  • Whistleblowing;
  • Disciplinary procedure;
  • Disciplinary rules;
  • Capability procedure;
  • Grievance procedure;
  • Maternity;
  • Paternity;
  • Adoption;
  • Shared parental leave;
  • Parental leave;
  • Time off for antenatal/adoption appointments;
  • Time off for dependants;
  • Compassionate leave;
  • Flexible working;
  • Company car;
  • Time off for public duties;
  • Time off for training;
  • Redundancy; and
  • Retirement

A comprehensive staff handbook is essential for an employer as you can set out your policies, procedures and rules in more detail.

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