It's well understood that poor performance can be a valid reason for dismissal. However, any dismissal is only fair if the employer reaches the decision following due process, which many employers find difficult to navigate in practice.
The "formal stage" of cumulative warnings is fairly well understood. However, it's rare to jump straight to a formal stage, and the importance of the informal stage of performance management is often overlooked, even though it's a crucial part of the overall process.
When considering performance management within your organization, you should consider using a Performance Improvement Plan (PIP). Unfortunately, being placed on a PIP is often seen negatively, with many describing it as a step away from the exit lounge and the inevitable P45.
In this blog, we'll challenge that perception and promote the idea that a PIP can be a positive experience while acknowledging that in some cases, performance management may not succeed and could lead to exit.
What is a PIP?
Performance management is not just a potential reason for dismissal—it should be seen as an integral part of the everyday work experience. If regular and constructive feedback is being provided, there should be no surprises, but sometimes things don’t work out, and a higher level of intervention is required. This is where the PIP comes in.
A quick internet search will reveal numerous examples of a PIP. The key element is clarity in terms of content and timelines. A PIP should focus on key areas of concern, provide clear examples and suggestions for improvement, and establish a prescribed timeline by which those improvements should be made. Employees have the right to respond—after all, it's their performance under the microscope—but employers need to ensure the PIP doesn't become derailed or stalled.
PIP: Challenges
Some tricky issues often arise. For example, how long should a PIP take? This largely depends on the employer's needs and the role type.
There's no point in having a three-month PIP if the employee's sole role is to negotiate single public sector-style service contracts where considerations run into millions; the contract duration is five years or more, and negotiations take years, not months. Similarly, a one-month PIP is almost impossible to implement effectively due to normal staff absences and work pressures. A realistic average duration is probably three to six months.
A particularly challenging situation is the rare individual who repeatedly improves only to regress again. In the absence of sustained improvement, an employer doesn't generally need to start the process over but can utilize whatever warning level is appropriate. However, successive PIPs can be a big red flag, and a PIP may not be appropriate in such scenarios.
Similarly, an individual’s use of the grievance process does not automatically halt the PIP process. Consideration must be given to the nature of the grievance and its link, if any, to the subject matter of the PIP. A common allegation might be that the manager is bullying the employee or simply doesn’t like them. In such cases, it may be appropriate to involve an independent manager to oversee the PIP process, allowing it to continue while the grievance is being reviewed.
So, what happens if the PIP doesn’t work?
Assuming the PIP has been given adequate time to work, the only safe option is to initiate the formal performance procedure. This formal process centres on cumulative warnings over a prescribed period, during which the employee is given the support and time to improve.
Performance management is not a quick fix. As an example, ACAS recommends at least two warnings over a significant period of time. In the absence of sufficient and sustained improvement, the employer should be able to fairly dismiss the employee, albeit following the payment of notice. Only in very rare situations, where underperformance amounts to gross negligence, can instant dismissal without notice be appropriate.