The Irish Times ran a really interesting article recently on annual performance reviews and how bad they are. I must agree with the points raised in the article from an employment law perspective also. We routinely advise employers on performance management issues and it is clear that managers find it difficult to give constructive feedback to employees throughout the year. Very often we see situations where employees are not aware there is a performance issue until such time as their manager has decided they have had enough and need to dismiss them. Managers then gear themselves up for a 'difficult conversation' at performance review time. This does not bode well for any severance negotiations or indeed any unfair dismissal case that may arise.
The need for proper and regular performance management can be clearly seen from the Google performance management case two years ago. In Rachel Berthold v Google Ireland Limited the EAT rejected the employer's defence that it had dismissed her on competency grounds, saying it was "not satisfied that fair procedures were used" and that there was no evidence that the employer "considered any other option than termination". It was also critical of the lack of time afforded to the employee to try to improve her performance finding it difficult to believe that she had gone from an employee with no disciplinary record to a less than competent employee within a short space of time. In this case the employee gave evidence that a 'bell curve' performance management system had been introduced by Google when it took over the business she had been employed in. This system meant that Google looked at the performance of its staff worldwide and line managers had to rank staff and then fit their performance into a “bell curve” used to assess the performance of all staff. In this system someone had to be ranked the lowest and so the rankings of staff members would therefore be adjusted by senior managers so as to ensure conformity with the bell curve. The employee was the person adjusted down in this instance. The employee won her case and was awarded €110,000.
Our advice? Try and avoid a build up of negative feedback - give consistent constructive feedback throughout the year. This means that if a negative discussion has to happen at performance management time it will not be completely out of the blue for the employee. It also gives employees an opportunity to adjust performance as they go. If they are doing something badly it does not make sense to let them keep doing it and wait until the performance review (when they are at their most defensive) to address it. I would also agree with the Irish Times' tips for managers and employers:
- Fast and effective performance reviews are necessary.
– Write a short note about what each employee is doing well or poorly.
– Explain that you will comment on both.
– Ask employees how they like their feedback, direct or softly. Start with the positives or negatives depending on their answer.
– Agree key areas to be worked on and ask if they would like help or training in order to achieve them.
– Ask for feedback about yourself. Are you a support or part of the problem?
– Give employees their say at the end.
– Keep your language neutral and your tone calm.
These tips will also serve an employer well in defending their approach in the event that employment litigation or bullying claims arise following on from performance reviews.
We have also prepared a guidance checklist for managers when dealing with performance reviews. To access the checklist on our website please click here.
If you need advice on performance management or any issues arising from the process please contact a member of our Employment Law & Data Protection Team, please click here.
Disclaimer:This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Leman Solicitors for any action taken or not taken in reliance on the information set out in this publication. Professional or legal advice should be obtained before taking or refraining from any action as a result of the contents of this publication. Any and all information is subject to change.
Heffernan believes performance management has the potential to be highly divisive especially if it is over zealous or if employees are graded into tiers. “This approach wrongly assumes that making people fight for a top spot will make them more productive. It doesn’t. When people are forced to compete, they stop helping and trusting each other and, in collaborative working environments in particular, this is a disaster.”