Organisations are not obliged by law to put performance management processes in place. However, it is usually regarded as best practice to establish a system whereby staff have their performance evaluated.
Croner, APHC’s trusted HR partner, look at the key areas around performance management and why they matter. For further advice on this matter or wider HR queries, APHC members can contact the dedicated support helpline.
The Purpose of Performance Management
The main purpose of a PM system is to align the efforts of individual members of staff with the goals and aims of your organisation and to encourage consistently high levels of performance. This is more likely to be achieved where employees are committed and motivated and find satisfaction in their work. The PM system aims to achieve this through a programme of communication, feedback, training and development and goal setting.
Managing employees’ performance is a continuous process. It involves making sure that the performance of employees contributes to the goals of their teams and the business as a whole. The aim is to continuously improve the performance of individuals and that of the organisation.
While there is no legal requirement to establish a PM system, you should remember that any outcomes of a PM system, whether written or oral, may be used by an employee in any tribunal proceedings, so it is important that assessments made of the individual through PM are consistent with other records or decisions about performance.
The Importance of Performance Management
Performance management is an important process for any business, and can significantly help:
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- To meet business objectives.
- To maintain staff motivation.
- To create an acceptable work environment.
- The achievement of optimum levels of customer service/safety.
- To reduce costs – maximise profit.
- To encourage high productivity and efficiency.
- To retain employees.
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These basic principles apply to firms of all sizes. Even small firms can benefit from having a straightforward system to manage performance. Systems do not need to involve a lot of paperwork – on the contrary the most effective systems are often the simplest.
Without a formal system much will depend on the attitude of individual managers. Some might agree appropriate objectives with people in their teams and give feedback on their performance while others may not.
Reasons for Performance Management
There are a number of reasons why Performance Management is important when taking on new staff. The first few months are critical for both you and the employee as you can both decide if their personality, skills and capabilities are the right fit for your business.
For example, they may be unsure of their responsibilities and need to get used to the certain processes of the job. As part of their performance management, you can outline what level you would like them to be at a certain point in time and offer them assistance in achieving this goal.
Performance Management for New Employees
Many of you will understand the value of settling a new employee into their role through a well-organised induction programme. Induction is a vital part of taking on a new employee. A lot of hard work goes into filling the vacancy or a new role, so you need to make sure that the new employee is fully prepared to undertake the duties and requirements of the position they have been hired to do.
Probationary periods are a good method to help new employees integrate into a business and allow managers to assess whether they are suitable for the role once a certain period of time has passed. It can also specify what level an employee needs to be at by a certain date. There is no direct legislation outlining how long a probationary period should last, but they are usually six months.
Setting Performance Management up for Existing Staff
A common reason for existing staff requiring performance management is their struggle to deal with potential workplace changes. For example, if you decide to introduce new software to your computers, or new technology to the business overall, some members of staff may have difficulty getting used to it than others and may need more support in doing so.
That said, there can also be other issues which affect employee performance and you should always approach this situation carefully. To give another example, an employee who is suddenly struggling to do work they have previously had few issues with could be dealing with personal issues which are affecting their performance and you need to be ready to offer support to them, which can include a performance management plan.
On the flip side, an employee who is deliberately acting in a careless manner may have an agenda of their own; maybe they are planning on leaving the company or have simply grown fed up in their job. You may want to go down a disciplinary route here and a performance management plan can help you to demonstrate that you have identified their performance levels have dropped, have given them the opportunity to improve, and that they have failed to do so.
Expert Advice
As part of our partnership, APHC members can receive free ongoing support on performance management or wider business matters through a dedicated helpline.
All the information you need on your APHC membership benefits can be accessed via the members only area of the website.
If you’re not already a member of APHC, get in touch with the membership sales team on 0121 711 5030 for more information.
