Performance management is important in all organisations. Employers may use performance management systems in different ways and for a variety of reasons. This can be an emotive area where staff feel they are being criticised personally and awkward for managers who want to shy away from confrontation. So, is your employer getting it right when it comes to performance management?
In its latest guidance published earlier this month, ACAS highlights the need for transparency, consistency and fairness in the design and operation of performance management procedures. This new advice comes as research revealed only one in four organisations have adapted their performance management processes to accommodate staff with special needs, disabilities and conditions, such as dyslexia and autism.
Clear aims should be identified
The purpose of performance management can vary from organisation to organisation. It may be intended to:
- support and improve staff performance
- identify and remedy problems with performance
- develop your staff
- reward employees
- better meet your organisational goals
Most performance management arrangements are likely to have a mixture of aims. As an example of the importance for employers in being clear about what they are trying to achieve, if the main aim is to develop staff, this requires managers and employees to have honest conversations around performance, possible skills gaps and development opportunities. However, if the system is also used to decide pay and bonuses, employees may worry that admitting to any perceived shortcomings could risk their bonus. This can make performance conversations less open and effective than they should be.
Different things will work for different employers
The arrangements that work best in your workplace will depend upon the needs of the business. An engineering company will probably want to do things a little differently than a hospital, for example. Employers should be thinking about:
What’s more important: what is done or how it’s done? A production line environment may place more emphasis on workers’ outputs, while a customer facing business, such as retail, may consider the way things are done to be equally important.
What kind of arrangements would fit our size and structure? Smaller firms may like the idea of more informal arrangements based upon regular face-to-face contact between the employer and staff. Larger organisations will need to think about the number of teams they have, how hierarchical their management levels are and how they can best measure staff performance consistently across the organisation.
How will the performance arrangements complement other workplace policies? There are often overlaps between managing performance, managing absence, discipline, training and wellbeing. Often minor concerns around performance or attendance can be best resolved through informal catch-ups. However, serious issues might need to be dealt with separately through the formal disciplinary procedure.
The need for transparency
Transparency means being clear about the process, how decisions are made and giving employees the chance to raise concerns about any aspect of the system they are unhappy with. To do this, employers should explain clearly to staff:
- how the system works in theory. For example, the criteria against which assessments will be made, the type of ratings that can be given and how many meetings should take place.
- how the system works in practice. For example, what training will line managers receive, how will marks be reviewed and the system be monitored?
Being transparent includes managers being clear about any final rating or marking they give to employees, communicating their thinking with other managers, and explaining it to staff.
Transparency also means that the rationale behind how any bonuses are awarded is made clear. Bonuses can be contentious if not properly explained to staff. For example, if the criteria is increased sales, then employees must be aware of this and clearly understand what is required from them to achieve their bonus.
Lack of consistency causes problems
Inconsistent approaches to performance arrangements can lead to resentment and loss of morale and employee engagement. Typical barriers to a consistent system include:
- a lack of clarity as to how performance is measured or how frequently meetings will be held to discuss performance. For example, managers might interpret vague guidelines on how to set performance measurements in different ways, or meet one team member three times a year to discuss performance and another team member six times.
- providing inadequate training on how the arrangements should be approached. For example, without proper training, managers might assess and rate performance differently to one another or may not approach issues around performance in the same way, leading to unfair decisions being made.
Discussing performance can be very emotional. Being seen to be fair is one way of keeping things business-like. Any arrangements should not only be fair on paper but also feel fair to staff too.To ensure fairness, ACAS recommends:
- avoiding surprises. If managers have a good rapport with staff then they should be discussing and addressing problems and giving praise along the way. It is usually unfair to surprise someone out of the blue. For example, concerns should be discussed when they arise and not left until the formal end of year performance meeting.
- avoid favouritism. The system and the manager should not be seen to favour one individual or team over another. For example, use objective criteria to measure people’s performance. Ensure managers communicate and build relationships with the whole team.
- avoid discrimination. The arrangements must not unfairly disadvantage staff because of a protected characteristic. You should actively consider the diversity of your workforce and ensure the arrangements are fair to all. For example, an employer must make reasonable adjustments to remove any disadvantage where an employee with a disability is disadvantaged by performance measurements.
Performance management is an area where indirect discrimination can happen without it being obvious. This is particularly the case if an employee is disabled and they are not meeting targets because of absence. Another common area where discrimination might be ‘hidden’ is in relation to sales or networking opportunities out of hours which women are unable to access because of caring responsibilities. Adjustments should always be made to performance management procedures to ensure disabled employees and other are not treated less favourably than others. Examples of suitable adjustments would be giving employees more time to meet targets or reducing these slightly.