Performance Management


Whilst employees have a duty to perform their duties with reasonable skill and care, inadequate performance does not justify instant or summary dismissal unless an employee is guilty of gross negligence. However, serious or ongoing poor performance may result in disciplinary proceedings and ultimately, termination of employment.

A performance review process or performance improvement plan should be separate and distinct from a disciplinary procedure. A performance review procedure should be seen by employees as a positive system to help them develop and work to the best of their potential.

Poor performance may be a fair reason to terminate employment, but the dismissal will only be fair if a fair and proper procedure is followed. Using a formal performance review process, coupled with disciplinary sanctions as and when appropriate will assist achieving a fair dismissal.  Failure to follow fair and proper procedures will make any dismissal unfair.

Performance Review Programmes

An individual performance review programme will be separate and distinct from an employer’s annual appraisal system. Performance reviews and performance improvement plans are designed to be used where employees are performing below an acceptable standard, with a view to helping them improve, or ultimately terminating their role if they are unable to do so.

Performance Reviews and Discrimination

In addition to assessing employee performance, performance reviews should be used to assess employees’ developmental needs and training requirements. Employees who believe they have been refused access to training or denied promotion on discriminatory grounds have the right to pursue claims in relation to such treatment through the Employment Tribunal.

Employers should ensure that performance review procedures are regularly reviewed and that assessment criteria do not discriminate against employees, either directly or indirectly.

Managing Poor Performance

Appropriate use of appraisals and performance improvement plans (PIPs) should minimise the risk of claims being brought for unfair dismissal if poor performance leads to dismissal.

The following factors should be considered when managing poor performance:

  • Investigation – poor performance should be reasonably investigated before raising the matter with the employee. The level of investigation required will vary from case to case, and consideration should be given to any mitigating factors.
  • Setting the required standard – employees should be given the opportunity to explain their performance.  Goals should be set for the employee and training used where appropriate in order to improve performance.
  • Consider whether any other action is required – depending on the seriousness of the poor performance, the employer must consider whether formal or informal disciplinary action is required.