Frequently, these are employees who are doing their incompetent best but cannot reach the standards required by their employers.  Sometimes it is due to a poor attitude.  If it comes down to a question of poor attitude, an employer might like to consider treating the matter as one of misconduct and taking the employee through the disciplinary process.  Where employees are seemingly doing their best but not reaching the standard required, the process which needs to be followed is slightly different.

The first point to note is that issues with employees should generally be addressed as soon as they emerge.  Generally, the longer an employer leaves it, the harder it is to go back and address the issue.  An employer might start by taking informal management action, such as simply having a conversation with the employee about where the employee is going wrong and what is required of him.  It would be a good idea to make a note of the conversation for future reference but no formal documentation is required.

If the standard of performance required is being made clear to the employee but he is still not performing, an employer should consider invoking formal performance management process.

At the first stage the employer should ensure he investigates the situation and the reasons for the poor performance as much as possible.  The employee should be formally invited to a performance management hearing at which the employee’s underperformance and the reasons for it should be discussed.  At this stage the employer may choose to issue the employee with a written warning.  The employee should then be given a period of time to improve (the length of which will depend upon the nature of the job and the nature of the underperformance) and he should be given appropriate support and training to help him meet the standard.

If after a first formal performance management hearing, the employee improves, then no further action will be needed; however, if the employee fails to improve, he will need to go through a further formal performance management hearing.  This time the result could be a final written warning.  Again, the employee will need to be given time to improve with support and training.  Again, if the employee improves, then formal procedures will end at that stage.  However, if the employee fails to improve a further formal hearing will consider whether or not the employee should be dismissed.

The key to conducting a fair formal performance management procedure is to ensure that the employee is clear about the standards required and he is given adequate time to improve as well as appropriate support to do so.  Employers should also ensure that they follow the appropriate procedural safeguards by giving proper formal notice of meetings, adequate time for the employee to prepare, an opportunity for him to be represented by an employee or a Trades Union representative and a right of appeal following a warning or a dismissal.

Performance management procedures can be time-consuming so, from a practical and commercial point of view, it might be simplest to reach a financial agreement with an employee to leave the business.  It is advisable to take legal advice before entering into any kind of negotiation.  If an agreement can be reached, the employee should be asked to sign a Settlement Agreement.  This protects the business and it prevents the employee bring any claims in an Employment Tribunal.  Getting an employee to sign a Settlement Agreement tends to be a quicker and easier way of resolving the issue when compared to going through performance management procedures; however, the disadvantage is that the employee would need to be incentivised, usually with a sum of money, in order to agree to the Settlement Agreement.