Addressing Under-Performance
Introductions
• Mark O’Donnell, Director of Human Capital, Deloitte Management
Consulting
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© 2011 Deloitte Touche Tohmatsu
Session Objectives
By the end of this session you will have an understanding of:
• What under-performance is and how it is caused
• The impact under-performance can have across the organisation
• Best practice performance management principles and how it can be used to
manage underperformance
• What steps you should take to address underperformance
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© 2011 Deloitte Touche Tohmatsu
What is
Underperformance?
Defining the Value of HR
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What is Under-Performance?
Definition
Under-performance may be defined as a level of performance that is below the standard
expected of an employee
Indicators
Under-performance or poor performance can be exhibited through:
•Unsatisfactory work performance
•Non-compliance with workplace policies, rules or procedures
•Unacceptable behaviour in the workplace
•Disruptive or negative behaviour that impacts on co-workers
Note: Under-performance is not the same as misconduct. Misconduct is
very serious behaviour such as theft, sexual harassment or assault and
should be dealt with accordingly.
© 2011 Deloitte Touche Tohmatsu
Under-Performance
Recent research found that the top 5 poor performance issues are:
• Higher sickness absence (73%)
• Individual capability (57.7%)
• Poor attitude/behaviour to colleagues (47.4%)
• Poor general standard of work (46.7%)
• Failure to meet work objectives (46%)
Source: XpertHR Group, 2011
© 2011 Deloitte Touche Tohmatsu
Reasons for UnderPerformance
Defining the Value of HR
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Causes of Under-Performance
In order to effectively prevent and/or manage under-performance, it is
critical that managers are aware of the underlying causes of it. Such
causes include:
• Un-established expectations
• Conflict: Interpersonal differences, personality clash, bullying etc.
• Misalignment of an employee’s competencies and the job role
• Culture misalignment
• No support or feedback on performance
• Personal issues, e.g. stress, familial, physical and/or mental health
problems
• Lack of personal motivation, low morale in the workplace and/or poor
work environment
Research by
Harvard
Business
Review (2007)
suggests that
most managers
are not in tune
with the inner
work life of
employees and
how this may
affect
performance.
• Breach of psychological contract
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© 2011 Deloitte Touche Tohmatsu
Hot Topic: The Psychological Contract
A Psychological Contract represents the mutual beliefs, perceptions, and informal
obligations between an employer and an employee
It consists of both relational and transactional elements
• Relational: Open ended less specific agreement on the relationship between the
organisation and the employee
• Transactional: “A fair days work for a fair day’s pay”
It is distinguishable from the formal written contract of employment which, for the most part,
only identifies mutual duties and responsibilities in a generalised form.
Breach of the Psychological Contract occurs when an employee perceives that the
organisation has failed to fulfil one or more of its obligations set out in the psychological
contract.
Breach of the contract has both individual and organisational consequences
e.g. underperformance
,
© 2011 Deloitte Touche Tohmatsu
How do Employees React When the Psychological
Contract is Broken?
Each employee may demonstrate different responses to breaches of the psychological
contract:
ACTIVE
Exit –
Quit, force
employer to
fire, sabotage,
violence
Voice –
Complain, try
to fix contract,
proactive
DESTRUCTIVE
CONSTRUCTIVE
Neglect –
Become
irresponsible,
neglect work,
don’t care
Loyalty –
Remain silent
and wait for
improvement
PASSIVE
Reference: Turnley & Feldman Model, (1999)
© 2011 Deloitte Touche Tohmatsu
Why it is Important to Address Under-Performance
When issues concerning under-performance are not addressed and managed both
appropriately and sensitively, it can lead to unhealthy and unproductive outcomes that
may affect the entire workplace from an individual to team to organisational level.
Text
Organisation
The U.S. devotes $105 billion a year to
correcting problems associated with poor hiring
and people management practices which
contribute to underperformance (SHL, 2004)
Team
SHL (2004) found that nearly a quarter (23%) of
U.S. workers believe that their colleagues are
incompetent. This leads to demoralisation
Employee
One out of eight U.S. employees leaves his or
her job before becoming competent (SHL, 2004)
© 2011 Deloitte Touche Tohmatsu
How to Manage
Underperformance
Defining the Value of HR
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© 2011 Deloitte Touche Tohmatsu
FSI Under-performance Survey
•
68% of organisations surveyed use their performance management system for underperformance, with a further 17% using Performance Improvement Plans
•
However, 53% don’t provide formal training for their managers in dealing with
underperformance
These results highlight two key issues in the management of under-performance:
1) Training for managers should be provided more consistently
1) Although a large number of organisations have a performance management
system in place they should check whether they are meeting the best practice
and/or working in relation to under-performance
© 2011 Deloitte Touche Tohmatsu
Importance of Performance Management Systems
Performance Management Systems are an important aspect in the management of
underperformance:
•
Most employees who are not performing well would like to improve
•
Employees that perform well can lose motivation if they have to carry the burden of poor
performing colleagues
•
A consistent approach to performance management provides opportunities to address
problems and generate effective solutions
•
A successful performance management process is one that supports the workplace
culture and is accepted and valued by employees
•
Performance Management Systems provide career visioning and mapping which helps
employees to direct careers and stay motivated
© 2011 Deloitte Touche Tohmatsu
Guiding Principles for Performance Management
• The PM system needs to be aligned with the organisation’s strategy and culture
• Leadership needs to be intimately involved in the process of creating and reinforcing the performance
management process and outcomes in order to create buy-in throughout the organisation
• There must be a clear link between organisational strategy and individual behaviors
• Emphasis is placed on both competencies (“the how”) and result/outcomes (“the what”)
• Goal Setting and evaluation against goals is a critical component
• Performance Management is an ongoing process not an event
• The process is developmental in nature (enhancing employee skills, competencies, knowledge and
experience)
• Employees have data input into the performance management process
• The process itself is evaluated and enhanced on an ongoing basis
• The process needs high level sponsorship and organisational ownership
• The process and link to valued outcomes needs to be clearly articulated to employees
• Commitment to training is critical success
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© 2011 Deloitte Touche Tohmatsu
Key Steps in Managing
Under-Performance
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© 2011 Deloitte Touche Tohmatsu
Managing Underperformance: Key Steps
1) Identify
the Issue
2) Assess
and
Analyse the
Issue
3) Discuss
with
Employee
4) Jointly
Create a
Solution
5) Monitor
Performance
© 2011 Deloitte Touche Tohmatsu
Step 1: Identify the Issue
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Aim to try to understand the factor driving the under-performance
Identify and define the issue at hand - it is important that the correct issue is identified. There
are many underlying causes to underperformance therefore assumptions shouldn’t be
made
© 2011 Deloitte Touche Tohmatsu
Step 2: Assess and Analyse the Issue
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Once the correct issue has been identified determine:
• How serious the issue is
• How long the issue has existed
• How wide the gap is between what is expected and what is being delivered
Following this process a meeting should be arranged with the employee
The employee should be
• informed of the purpose of the meeting and
• allowed to bring a support person to the meeting
© 2011 Deloitte Touche Tohmatsu
Step 3: Discuss With Employee
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The meeting should take place in a private environment that is comfortable, non-threatening
and away from distractions and interruptions.
Start off the meeting by explaining the issue to the employee detailing:
• What the issue is
• Why it is an issue
• How it is impacting on the workplace
• Why there is concern
• What you wish to achieve from the meeting
The meeting should be an open discussion whereby the employee can give their point of
view and be heard
As this may be a difficult meeting for the employee, it may be beneficial to also recognise
their strengths and positive contributions
© 2011 Deloitte Touche Tohmatsu
Step 3: Discuss With Employee – Note
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• Speak clearly and plainly
• Talk about the issue not the person
• Explore the reasons why there is an issue
• Clarify the details
• Stay relaxed and encouraging
• Summarise to check your understanding of the situation
• Keep a written record of the meeting
It is important to check that the employee:
• Is aware that it is a task that is required of them
• Has been shown what is required
• Understands the gap between what is happening now and what is required
© 2011 Deloitte Touche Tohmatsu
Step 4: Jointly Create a Solution
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Important that the employee takes ownership of the solution
When working out a solution be mindful to:
• Explore ideas with open questions
• Emphasise common ground
• Focus on the positives
• Offer assistance to the employee
Develop a clear plan with the employee taking the form of a performance agreement
or action plan:
• Indicate performance improvement milestones
• Clarify job role and responsibility, reinforce value of the role
• Establish timelines, and strategies for career and training development
• Set up another meeting to review
© 2011 Deloitte Touche Tohmatsu
Step 5: Monitor Performance
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Monitor the employees performance and continually provide feedback and encouragement
• Hold a review meeting regardless
• Provide positive and negative feedback
• Provide support for the employee
If the employees performance does not improve, more serious action may be required
© 2011 Deloitte Touche Tohmatsu
Practical Examples of
Managing UnderPerformance
Defining the Value of HR
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© 2011 Deloitte Touche Tohmatsu
Practical Examples
Issue
Possible Causes
Actions
•Job content & design
•Identify cause behind absenteeism
Higher
Sickness
Absence
•Inappropriate job fit
•Management style
•Explore possible strategies for job redesign, job fit, changes to working
arrangements, management of health issues
•Personal or workplace
issues
•Re-establish expectations of attendance
•Look at possible options for training and development if a skill deficit is
identified
•Inappropriate job fit
Capability of
the Individual
•Lacks the required skills
and capabilities
•If employee fails to develop required skills, progress through
performance management process to possible options such as
reassignment of duties, or transfer to another area to achieve a better
job fit (if possible)
•Review recruitment practices to ensure appropriate selection decisions
are being made
Poor Attitude/
Behaviour to
Colleagues
•Has become disillusioned
with work environment
•Establish team culture based on respect and support
•Conflict between
colleagues-personality
clash
•If conflict exists identify the cause and engage in conflict management
ensuring a solution focussed approach
© 2011 Deloitte Touche Tohmatsu
Checklist for Managing Under-Performance
Ensure employees clearly understand what is expected of them from the outset
Clearly identify and assess the issue - organise a meeting with them to discuss
Give the employee a genuine opportunity to respond before considering your
actions
Where an employee’s performance is suffering due to the employee’s personal
circumstances, refer the employee to professional help or counselling
Clearly outline the improvement required and the consequences of continued
under-performance
Develop an action plan with the employee which includes performance
improvement milestones and time frames for further review
Monitor the employee's performance and continue to provide feedback
Follow any steps set out in the employer’s policies and procedures and the
employment contract concerning performance management
Comply with the Unfair Dismissals Act 1977 in cases where under-performance
is escalated to more severe measures
© 2011 Deloitte Touche Tohmatsu