People: How do you appraise your staff and deal with poor performance?

Tips on appraising staff and getting the best from those that are underperforming, for busy managers and founders of growing technology companies – from the 2017 series of Threads discussions.

Discussion host: Peter Cain, growth and change Consulatant at Anamosys.


Everything begins and ends with the culture of openness that you create; a culture in which it’s safe to make mistakes. We all make mistakes. Mistakes are learning points. It’s repeating the same mistakes that lets us down. 

Be supportive during a staff review. Ask “how might we do it differently, next time?”, and “what can I do better, to support you?”. Get them to own the situation and feel empowered to do so.

Good management requires great emotional intelligence. What you give out, you’ll get back. If you feel frustrated, express this as your passion for ‘doing things better’ rather than apportioning fault.

Think about how your staff see the world and how they like to be managed. Aim to catch up with everyone, individually, once each week, and there’s nothing like sitting down for lunch with the team for making yourself easily available.

Staff review, rather than appraisal

The word ‘appraisal’ can seem judgemental. To build rapport and understanding, ‘review’ is better.

Some staff are private or detail-oriented and may prefer working to a scheduled review plan, while others may be more informal and respond better to ad-hoc discussions at the right time; use your emotional IQ and adjust accordingly.

A mix of informal regular catch-ups with more structured periodic reviews works well for staying in touch. Let your staff set the agenda so that they are actively involved in the process.

360° feedback can be enlightening but time-consuming if it all takes place  around year end. But do triangulate feedback from others to confirm or deny any suspicion of a underperforming team member. Corroborate your own views with other in the team to augment your perspective.

If you think the root of an issue lies within someone’s personal life then help them to open up by taking an interest and providing a listening ear. Offer some understanding from your own personal life to encourage them to speak about themselves. Getting to know your staff at a personal level will help you to support and manage them better. Offer a little flexibility and you should see good results.

There should be no surprises at a formal review. You should have already touched on everything you need to discuss at more regular informal catch ups.

Managing someone who doesn’t fit in

It’s most important that staff fit in with – or add to – the culture, often this is more important than the technical skills they bring along. Technical skills can be learned and existing skills applied elsewhere, but disruptive staff can destroy the culture and the team.

If someone really doesn’t have the necessary skills give them training and time to learn. If they continue to fail to grasp those skills, shift their role within the team to help gain the skills; or, re-focus on their core strengths until they’re ready for more.

Hone your conversation steering skills, set off with the point you need to reach at the front of your mind. Be tenacious about reaching this point and hearing those words from the employee. Practice this skill often, as it will aid you enormously.

Visible notetaking can halt the flow of conversation during a review. If needed, make very short notes and flesh them out later. If you hit a performance issue, document it, even if you don’t take notes during the meeting. This will be useful if things reach disciplinary.

Recognition for your best staff

Some employees like to be recognised publicly, while others prefer their achievements to be noted more discreetly. 

Staff on performance based bonuses will want to understand how they’re being measured and whether they’re on track. If you can’t offer cash-based bonuses, offer recognition and personal development opportunities.

Company away-days are good for team building but don’t replace a good review process. If the business places value on them it should hold the away-day on company time – or offer pay / time in lieu.

Getting rid of people who don’t fit with the company culture, or who consistently underperform, is usually positive for the rest of the team. But you will need to carefully justify any dismissal.

It’s okay to ask about ‘reasonable adjustments’. If any employee is disabled or you think that they might be, it is good to seek medical evidence and good practice to discuss with them what adjustments could assist them if so.

Be shrewd; diarise 18 months from when each employee was hired, as it’s then six months before legal obligations around unfair dismissal begin. Prior to this it’s easy to dismiss without comeback unless the dismiss relates to a ‘protected characteristic’ (these are age, disability, gender reassignment, marriage and civil partnership status, pregnancy and maternity, race, religion and belief or sex) or the employee is being dismissed for raising health and safety concerns or for whistleblowing.

The value of a protected conversation

A ‘protected conversation’ is a fairly recent development and enables you to have an off the record conversation with an employee prior to any dispute having yet arisen with a view to agreeing the exit of the employee i.e. before you take disciplinary action or start capability proceedings. It is for the purpose of negotiating an exit, an employee cannot be coerced into have a protected conversation and cannot be told to resign or be dismissed. Neither can they be told to enter into a settlement agreement or be dismissed. You need to ask them if they are prepared to have a protected conversation before this takes place. For some further information on this see annex four in the following link:

Terminating employment

Termination fees; notice pay must be taxed in all cases from April 2018 even where there is no clause allowing a payment in lieu of notice (traditionally in this case it has been able to be paid gross) as well as any payments in respect of holiday pay. Up to the first £30K of any settlement payment for termination of employment can be paid tax free.

Check whether the contract of employment stipulates a contractual disciplinary process. If it does then you must go through this process before you dismiss even when an employee has less than two years’ service otherwise you will be in breach of contract. If it is not contractual and you are confident that the employee does not have any potential protected characteristics and has not raised health and safety concerns or whistleblowing or that you have sufficient evidence that these are not the reason for dismissal or related to it (NB be careful that performance problems are not as a result of a disability) then you don’t have to follow a process. 

To protect your IP, your contract of employment can stipulate that employees go on ‘gardening leave’ during the notice period, precluding them from working for another employer during this period. They will then still be your employee during this time and you will still be paying their wages so they are not free to go work for another company during this time.

If a settlement is reached then this needs to be finalised by way of a settlement agreement and is only legally binding if signed by an appropriate advisor. It is normal for the employer to cover legal fees for the employee to take advice on the effects of the terms of the settlement to make it binding (not on whether it is a good deal or not). £500 + VAT is the standard amount for this.

If things aren’t working out, build a runway for that person to leave. Help them understand why they don’t fit and where they might, to think about alternative options, and maybe even to get another job.

An honest, negative, reference may be challenged, as it may be hard to evidence. Employers have no obligation to give a reference, so if it’s bad, simply decline, as this will send its own message. A personal reference from one of your line managers is permissible, provided it’s abundantly clear that it’s not made on behalf of the firm.

Published by Andrew Gifford

Co-organiser of Threads South West. Founder/MD and people person at techfolk. Interested in the people aspects of running a progressive business.

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