In an ever changing and competitive marketplace, performance standards are increasingly coming under scrutiny and performance is being more effectively managed in the workplace, particularly within the retail sector. 

Employers recognise the importance of ensuring that employees deliver the required standards of performance, which results in good customer service and contributes to the success of any business. It is important that an employee knows the standards of performance that are expected of him from the outset.  The standard may well change over time, for instance in a role change, on promotion or to meet the needs of the business.  Any changes should be communicated and well documented. 

It is beneficial to have in place an appraisal system to monitor performance.  It is a good way to engage and motivate employees and to identify any performance issues.  Many employers conduct appraisals on an annual basis and performance can be reviewed more frequently on an individual basis if it falls below expectation.  Performance reviews and appraisals are an ideal opportunity for an employer to praise and reward an employee who is meeting or exceeding expectations.  It is also an opportunity to discuss ways of challenging and motivating the employee to maximise his potential in the workplace and for an employee to raise his career aspirations. 

Performance issues need to be addressed as soon as they arise and can often be resolved quickly and effectively during an informal conversation, reminding the employee of the performance standards required in his role, highlighting the areas of concern and identifying if any support or training can be provided to help him meet the required standards.  The employer will need to establish if there are any underlying reasons for poor performance, such as ill health, disability, personal problems or issues in the workplace between colleagues, and address such issues or make allowances for the employee, for example where a disability is identified or an employee requires some reasonable adjustments to assist him in carrying out his role.  An employer will also need to consider whether insufficient training or poor management may be a contributory factor.

If this is unsuccessful, the employer should follow a formal performance management or capability process, which can be time consuming and costly.  Such processes can also have a negative effect on employee morale and a knock on effect on the business.  Performance management or formal capability procedures should not be treated as or perceived to be some sort of exit strategy from the outset.  They should be fairly and consistently applied.  Employers invest a lot of time and resources in recruiting and training employees so it makes sense to nurture and support them and to develop and retain their talent. 

A clear and concise capability policy is a good way of providing structured guidance on how performance will be reviewed and managed.  In the absence of a capability procedure, the Acas Code of Practice on Disciplinary and Grievance Procedures and the Acas guidance on performance management can be invaluable sources of guidance for best practice in dealing with performance management.  Unless an employee is dismissed during his probationary period or it is a matter of gross negligence, it is recommended that an employee is given at least two warnings before he is dismissed on notice for poor performance.  Failing to address performance issues fairly and consistently in a timely manner can have an adverse effect on an employer's prospects of successfully defending an unfair dismissal claim if continued poor performance results in dismissal.

One of our retail clients, Signet, has recently introduced a new performance management approach. Lisa Templeton, HR Director, comments that in the jewellery business, more than many other retail sectors, we need team members who can deliver great service and expertise in order to delight our customers and play a positive part in many of the important events and celebrations in their lives. In 2014 we have had a real focus on ensuring that our performance management tools – job descriptions, appraisals, objective and target setting, reviews and  coaching sessions  – are clear, relevant and focused on the “right things”, as these had become outdated over time. With Bond Dickinson’s help we also revamped our performance improvement policy, renaming it  a “supporting performance and capability” policy, which clearly outlines the support every store team member can expect, but also the (newly streamlined) action we will take to address performance concerns.  We have also run practical training sessions on how to consistently, fairly and legally apply the policy. Our district and store managers have really appreciated the “joined” up approach, the balance of speed and fairness in the policy and the training given in what can often be a difficult aspect of managing people.