Do your managers and supervisors fail to address performance issues until the situation is beyond salvation? Do you know how to prepare and implement a robust performance management strategy that mitigates attrition, drives employee engagement, and complies with governing legislative frameworks, principles and international best practices? Practically speaking, these questions underscore one of the most challenging and delicate aspects of managing teams and their performance.
Organisational performance management (OPM) is grounded in the undeniable fact that the overall success of any organisation is largely dependent on its most prized asset – its people.
However, as the new world of work continues to evolve with the gradual acceptance of remote/ hybrid work systems, disruptive technologies and the unprecedented growth of the “gig economy”, the importance of rethinking OPM has become more relevant to creating positive impacts for the employee, employer and the broader business.
Against this background, this article has been succinctly tailored explore the differences between OPM and performance appraisals, highlight the legal risk of unfair dismissal claims and advance practical strategies to effectively manage and evaluate OPM while drawing perspective for the new world of work.
Understanding the differences
It is imperative to begin this discourse by defining and highlighting key differences between organisational performance management and performance appraisals.
Organisational performance management is a systemic and ongoing process centred around fair, transparent, and accurate processes used by employers. It is not simply focused on assessing previous performance in an annual performance review or appraisal.
It considers developing team members in their respective roles, personal and professional goals to ensure they meet established standards of performance. This is achieved by providing guidance and mentorship at regular touchpoints in the employee’s tenure at the organisation. Regular (weekly or quarterly) one-on-one meetings with managers about goals, progress, self-reflections, continuous feedback from peers are all considered components of effective OPM.
Performance appraisals (commonly referred to as performance reviews) differ from OPM in the sense that these tools and their related applications form only one part of the OPM process. As a subset of OPM, appraisals involve formal meetings between management and employees every six to 12 months. During these meetings, an employee’s performance is evaluated, and subsequent feedback is provided.
International best practices dictate that it is good practice to conduct performance appraisals to enable employers to monitor and give feedback on all employees’ performance (not just those who are underperforming). They can also be used to evaluate pay increases and bonuses.
Legal risks in OPM
Flowing from the differences in the foregoing, it is important to discuss a notable legal risk which may arise at any stage of the OPM process: Unfair dismissal claims: One of the most common claims arising from OPM is an unfair dismissal claim as stipulated in the Employment Rights Act 2012-9 Laws of Barbados (ERA) and elucidated in the case law. This was clearly demonstrated
in Joel Leacock v. PMM Services Limited (also known as KPMG) Case:ERT/2014/056 (Joel Leacock decision). In short, the Employment Rights Tribunal (ERT) made it crystal clear that employers should carefully document records of the conduct of its employees to ensure they fulfil statutory duties under the ERA. More importantly, employers should institute an effective system which provides adequate and periodic feedback on an employee’s performance and work record.
Such a system should be beneficial for both the employer and the employee in relation to the contract of employment. To give context, the decision involved Mr Leacock alleging unfair dismissal where he averred that he was never given a written or oral warning about his performance. In fact, he gave evidence that he was given a previous rating of “strong performance”, a promotion and an increased salary.
In rebuttal, the employer contended Mr Leacock was justly terminated, citing the principal reason related to his conduct where he persistently refused to accept feedback from the employer to remediate shortcomings in his work performance. Under cross examination, one of the witnesses tendered, even described Mr Leacock as “unmanageable”. Despite this, the ERT still found that the legal process was not followed in accordance with the statutory duties set out in the ERA.
Further to the Joel Leacock decision, the country’s apex court reaffirmed and gave guidance on the award of costs and unfair dismissal process in the oft-cited decision ofChefette Restaurants Limited v. Orlando Harris [2020] CCJ 6.
Dismissing the appeal and partly allowing the appeal against compensation, the justices reasoned that Chefette failed to follow the required legal process which was designed to ensure due process by not informing Mr Harris of the accusation against him and giving him an opportunity to respond.
Practical strategies
On the heels of examining unfair dismissal through the lens of OPM, it is noteworthy to mention that due process is of critical importance, save for legal exceptions such as summary dismissals. In this vein, we will now advance a few invaluable strategies to consider in improving OPM within organisations:
• Draft and continuously review all employment documentation – Before starting the performance management process, ensure that all employment contracts are clear, comprehensive, and up to date. Regularly review and update employment contracts to reflect current roles, expectations, and organisational policies. Ensure that all employees are provided with a copy and that they understand their terms, alongside the associated procedures to be followed in the case of a breach or grievance. Ideally, this information should be clearly articulated from the onboarding stage and during the tenure of the employee’s time with the organisation;
• Investment in human resource/talent acquisition training and support – Ensuring that your human resource/talent acquisition team, managers and any other team member involved in the dismissal process receive continuous professional training through both formal and informal channels is paramount. Staying up to date with issues such as employment legislation, diversity, equity, inclusion, anti-harassment and bullying, grievance management, disciplinary procedures (documentation management of appraisals) and dismissals is essential to remaining compliant in following a just and fair process in accordance with statutory obligations and mitigating financial loss;
• Capitalising on technology: Having established the move from traditional “in-person” work to the operations inherent in the gig economy and related remote/hybrid structures of work, it would be prudent to critically rethink how performance management strategies can be adapted to suit the realities of the modern workplace.
Review solutions
It therefore follows that since the workplace has gone digital, to a large extent, it is exigent for organisations to carefully review the digital and information technology-based solutions for their performance management functions which provide real-time information about employee recognition, engagement, and values alignment, and offer an impact score that assures transparency to performance measurement and evaluation.
• Commit to clarity and documentation in the OPM process: Managers and other business leaders should aim to provide clarity to all team members, including remote workers, in relation to assessments and feedback on their performance (especially in particular instances of underperformance) and offer clear routes for improvement. Annual performance appraisals should not be a substitute for regular feedback sessions.
Regular feedback allows employees to understand their performance and make necessary adjustments in real-time. Instead of annual reviews, consider quarterly or even monthly check-ins This provides opportunities for course correction and avoids surprises during formal appraisals.
A well-documented performance review process can provide evidence of fair evaluation, essential if any disputes arise. Maintain thorough records of all performance discussions, feedback provided, and any subsequent actions agreed upon.
Ensure both the manager and the employee sign off on these records. Finally, sweeping generalisations based on a general impression of the employee are unhelpful for all parties involved and can also put the business at risk of claims for unfair dismissal.
