What is the true cost of not addressing performance issues properly?

People issues – ask any business owner in any sector who has been operating for any length of time what keeps them up at night, and it’s a safe bet that people and performance issues are within their list.

I’m a firm believer that it’s in the employee’s interest as much as the business’ and in the interest of their colleagues that an unproductive employee or workplace ‘saboteur’ is moved on fairly and efficiently.

Why? Because the domino effect that person creates can ripple out across a company if issues are not nipped in the bud which means the costs to a business can be eye-watering! These include:

• Financially – you are paying the underperformer a salary even while they’re not delivering results.
• Time – your line managers and HR manager will be managing the impact of poor performance including complaints from customers or other staff, taking up a sizeable chunk of their time.
• Productivity – other employees may end up picking up the slack for the underperforming person which can lead to resentment and good employees’ feeling undervalued and leaving.
• Brand damage – particularly relevant if the underperformer is in a customer facing role and their poor work leads to a loss of customers or orders.

Typically, the ability of an employer to either extract that person from the business or to tackle people problems which arise is complicated by three key things:

1. Their contracts and staff policies don’t clearly outline their performance management and disciplinary processes.

2. Previous ‘minor’ misconduct or performance issues have gone unaddressed.

3. The process being used fails to follow the ACAS code of practice.

Real-life examples of employee behaviour which could trigger disciplinary procedures

Example One – A client wanted to dismiss an employee for unacceptable behaviour following a complaint by a member of the public about a rude gesture. The employer could have decided to dismiss, but due to mitigating factors decided to issue a final written warning instead. They also had the additional options of ?demoting or redeploying this person. These options however, require a clause within your employment contract which enables this to be done as a disciplinary sanction. Because this is a change to the employee’s terms and conditions, a clause like this is essential to avoid it being in breach of contract.

Example Two – Problems began to arise for the directors of a services company when a supervisor went on long term sick leave, but didn’t follow the company sick leave notification process on repeat occasions. This resulted in difficulties for the company in servicing and planning the client’s work. As the process was clear, the employer was able to go through its disciplinary process and issue her with a final written warning. This kind of behaviour counts as misconduct, and can be seen as gross misconduct dependent on the particular circumstances.

Why are people issues not tackled when the cost of leaving them is so huge?

Because for many businesses this period is their busiest time of the year, and employers simply don’t have the time or headspace to begin a disciplinary process. Also, employers are people too, and few relish taking someone aside and telling them that their job is at risk right before Christmas.

However, the longer issues linger the greater the cost to your business AND the more complicated it can become to act if behaviours are ignored.

Christmas and New Year can be a great cue to reflect and review, so if you’re an employer who wants to challenge poor performance, I can offer outsourced legal support so you can stay compliant – and start sleeping at night again…

Karen Coleman, Employment Solicitor

#legaladvice #employmentlaw #HRsupport