When an employee is underperforming, managers can often become impatient and want to manage an employee out of the business. In some case, businesses are also taking this approach to avoid the formal redundancy process.
Of course, if an employee isn’t performing and isn’t meeting the performance standards required by the company to do their job, then action should be taken to rectify this. However, managing out refers to the process whereby organisations are effectively counselling employees out of a position, through persuading them it would be in their best interests to leave the business.
Yet, this can often have serious implications from a HR perspective, as in the UK employment law declares that employees have a legal right not to be dismissed unfairly. Therefore, HR professionals are left with a dilemma; support the needs of the business? Or leave themselves vulnerable to an unfair dismissal claim?
Below are some of the ways employees are being managed out and how to ensure that you aren’t putting your organisation at risk of a legal claim.
Implement a Performance Improvement Plan
A Performance Improvement Plan (PIP) is one of the best ways that progress towards improvement can be tracked, yet it’s often being used by employers to disguise the fact that they intend to manage out an employee as employers are setting unrealistic targets for employees to meet. Essentially, PIPs are being used as a tool to prove that the correct procedures were followed if an unfair dismissal claim is made.
As a guide, a PIP should include the following:
- Explain why current work performance isn’t up to standard
- Detail the improvement expected
- Include objectives which can be measured
- Discuss a timescale when the PIP will be reviewed
- Detail the disciplinary action that will be taken
- Include whether support will be provided in the form of training
As an employer, you should ensure that you provide employees with the opportunity to discuss their performance with a manager and that your PIP includes realistic, fair goals which are achievable.
Ultimately, when you introduce a PIP, your goal should be to resolve the issue and improve performance, rather than as a scapegoat tactic to remove an employee.
Making staff unhappy
Where performance is less of an issue or an employer is convinced that an employee’s performance cannot be resolved, employers have been found to make employees unhappy at work in the hope that they will leave.
Employers are ‘freezing’ employees out of the organisation by not inviting them to meetings or social engagement, handing accounts which they would have previously worked on to another staff member or removing employee perks they previously had access to such as a company car.
However, this approach is particularly risky, as an employee can claim unfair dismissal or threaten legal action. Therefore, this approach is thoroughly discouraged, and you should seek to address the problem head on, rather than take action which is not only unfair to an employee but could cause legal action.
In 2013, legislation was introduced which allows employers to conduct ‘protected conversations’ which mean that information is not admissible in an employment tribunal. A ‘protected conversation’ will involve an employer and employee reaching an agreement which often includes a payment and reference if an employee agrees to leave an organisation.
As the issues discussed cannot be used in an employment tribunal, conversations are now being used as a vehicle to discuss an employee’s exit from the business and the terms of their termination in the knowledge that they are protected from claims. Often, an employee agrees to exit the company; as while they have the right to say no, they often feel unable to stay when it’s been made clear they are no longer required.
Employers should exercise caution when using this approach as the definition of what a ‘protected conversation’ covers is small, and discussions could still be used in legal proceedings. Therefore, it’s best practice to ensure that conversations are not brought up out of the blue and that you have issues which are documented and discussed in the meeting, with a view to resolving the issue, not managing out an employee.
We highlighted in our ‘is your business acting illegally?’ quiz that employers were using redundancy to remove employees from the business. Employers often rehire for the same position soon afterwards which means that they are putting themselves at risk of an unfair dismissal claim.
For a redundancy to be considered legitimate, employers must prove that the role is no longer required, and are not permitted to recruit for the same role unless they can demonstrate that the position is needed once again.
Rather than conduct a false redundancy, it’s best practice to address performance issues head on, as you’ll ultimately leave your business short if the role is essential in the running of the organisation.
While in some cases you may feel that it is necessary to manage out an employee, we would advise that you seek HR and legal advice. Otherwise you could find yourself at risk of an unfair dismissal claim.