Performance Management 

The Risks and Liabilities Involved

Beard, Brainstorming, Business 

Performance Management is often considered part of a corrective event however, unfortunately the reality is that, despite all the efforts we go to, some staff will not make it and we may well end up having to provide them with written warnings for ongoing substandard performance or, in a worst case scenario, consider the potential termination of their employment.

Case Law from the Employment Relations Authority confirms that poorly executed performance management processes are one of the primary reasons for Employees to be successful in lodging an Unjustified Dismissal Performance Grievance claim.

Where do the typical risks lie?

The most common error committed by Employers is a lack of process being implemented in seeking to correct the Employee’s poor performance. Goals and objectives are often not well defined, are not directly aligned to on job tasks and activities and adequate support and/or training is not provided.

The next common error is that insufficient time is provided to the Employee to demonstrate their ability to perform at the required standards prior to formal warnings being provided.

Next, we find that Employers are often not good at following their own processes with expected meeting dates slipping by, feedback failing to be provided between formal meetings or new concerns being raised within previous issues that have been resolved or actions being elevated prior to agreed review dates.

Unsurprisingly a frequent error can also be incurred by an Employer being frustrated with the slow pace of the performance management process with them ‘taking it into their own hands’ and seeking to rush what they deem to be an imminent conclusion.

What are the potential liabilities?

Where an Employer makes an error within their process (procedural) they may be required to return to the start of the processes and commence the entire process again resulting in the process becoming exceptionally drawn out.

Where a warning is provided based on a lack of good process or on incorrect data (substance) this may be challenged through an Unjustified Disadvantage claim resulting in the warning having to be retracted, potential compensation provided, and the creation of a situation where the process becomes drawn out or is abandoned.

Where a dismissal occurs as a result of a lack of process or substance the Employee is entitled to raise a personal grievance for Unjustified Dismissal, resulting in the potential payment of a significant compensation and even the potential for reinstatement being awarded.

Performance management however, should not be avoided with a robust process either leading to significant improvement in the Employees performance or a well-managed exit from the business of the underperforming Employee – without the risk and liability of a successful personal grievance claim being raised.

Given the risks and liabilities associated with formal performance management, we are finding that many Employers are seeking to outsource the management of this process to avoid claims of predetermination and bias and to ensure that a procedurally fair process is developed and implemented specific to the performance concerns held against the Employee.

If you would like to know more about how we can support you within your performance management processes, please feel free to give us a call.

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