Wednesday 26 October 2011

Why making it easier for companies to sack under-performing staff may be counterproductive

Following the government’s recent reduction in the qualifying period for employee protection against unfair dismissal from two years to one, a leaked Downing Street report has recommended abolishing the right to claim unfair dismissal altogether.   

The report, commissioned by the Prime Minister and written by  venture capitalist Adrian Beecroft, proposes a system that would allow employers to sack unproductive staff with basic redundancy pay and notice, enabling organisations to dismiss poorly performing staff and replace them with more capable ones.  Beecroft claims that ‘a proportion of employees, secure in the knowledge that their employer will be reluctant to dismiss them, work at a level well below their true capacity; they coast along’. 

The report recognises that employers could potentially abuse the proposed changes and get rid of staff simply because they did not like them.  ‘While this is sad’, Beecroft says, ‘I believe it is a price worth paying for all the benefits that would result from the change’.   

An additional flaw in the proposal is the assumption that organisations will easily be able to find more capable people to replace those they are dismissing.  Presumably at the time of hiring them, the employer considered these people to be capable.  This suggests there might be a flaw in the recruitment process, or something has happened subsequently to turn them into under-performers.  These are both serious management issues that need to be fully explored, otherwise there is a risk that the problem will just repeat itself.   

The law as it stands allows employers to dismiss staff where there are fair grounds for doing so; it also protects individuals from unfair treatment.  Making it easier to dismiss staff may provide a quick fix, but it doesn’t help organisations address the underlying problems.  Managing poor performance can be difficult, unpleasant and time consuming – it is however central to a manager’s role.  

Tim Schuler is a coach, facilitator and business partner. He specialises in bringing out the very best in managers, whether it’s their first management role or something they’ve been doing for a while. More information is available from www.tschuler.co.uk

Monday 17 October 2011

Institutional inertia holding back diversity

Recent reports show that, despite recommendations that companies draw up targets for the number of women on their boards, two-thirds of FTSE 100 companies have failed to do so.  Is however gender diversity at board level a real priority in the current economic climate?   

The arguments in favour of diversity are well-known.  Research clearly shows that consistently recruiting similar people is bad for business, while introducing diverse personality types can increase innovation, enhance the organisation’s brand image and attract a broader range of customers.   And yet the rhetoric of diversity still seems to fail to translate into practice.  Ruth Sealy, co-author of a report by the Cranfield School of Management, highlights the problem of ‘institutional inertia, whereby companies persist in their existing approach - or lack thereof - to gender diversity at board level’. 

For many managers under pressure to deliver more with less, diversity issues (whether based on gender or other factors) rarely feature more than to ensure their practices comply with current legislation.  For most, discussions about boardroom diversity are largely academic as their opportunity to directly influence this is limited. 

Baroness Sheila Noakes, a non-executive director for RBS, suggests that to ensure board room diversity, organisations need to ensure ‘a flow of women coming through the ranks in general’.   Institutional inertia however is not something that just affects the prospects of women at board level.  In the current economic situation, women seem to be experiencing a particularly hard time.  Women’s unemployment is at its highest in 23 years, and the kind of work women traditionally do in both the public and private sector is being severely reduced. 

When under pressure, it’s all too easy to fall back on tried and tested approaches, but perhaps these are the very times when new ways of thinking are most needed.  Encouraging diversity at all levels should be on every manager’s agenda, not just to tick some compliance box, but to give the organisation the injection of fresh ideas that will actually help it thrive during hard times.

Tim Schuler is a coach, facilitator and business partner. He specialises in bringing out the very best in managers, whether it’s their first management role or something they’ve been doing for a while. More information is available from www.tschuler.co.uk

Wednesday 12 October 2011

Is the fear of an unfair dismissal claim holding back your business?

At the beginning of this month, the government increased the qualifying period for employee protection from unfair dismissal from one year to two years.  Among the Chancellor George Osborne’s justifications for this, the one that most caught my attention was his comment that employers can’t afford to take on unemployed people because ‘they fear they are going to be taken to a tribunal’.

This comment reminded me of people who hold back on entering into relationships because of the fear of acrimonious divorce.  Of course there will be some who hold this viewpoint, but despite potential pitfalls most people go through life with a more optimistic attitude and give relationships a try. 

Lasting relationships, whether at work or personal, are serious things and shouldn’t be entered into lightly.  Unless you’re one of those strange individuals who actually enjoy constant fighting, careful consideration needs to be given to choosing someone who’s compatible.  Finding someone who isn’t right and believing you can fundamentally change them is doomed to failure. 

It’s also important to remember that both sides bring hopes and fears to a relationship.  Some of these are based on their own experience, some on the experience of people they know, and some possibly based on urban myths.  As people get to know each other better, the truth of these is tested, and although establishing trust and respect can be left to chance, conscious effort and commitment is usually needed – not just at the start, but throughout the relationship. 

If unfortunately things don’t work out, it helps to keep things as amicable as possible, even if it means making concessions.  Being determined to win usually prolongs the pain of separation – no-one really wins in either divorce courts or tribunals. 

Like any relationship, employing someone requires constant attention to keep it alive.  Blind optimism is perhaps naive, but constant suspicion and lack of trust will inevitably kill it.

Tim Schuler is a coach, facilitator and business partner. He specialises in bringing out the very best in managers, whether it’s their first management role or something they’ve been doing for a while. More information is available from www.tschuler.co.uk

Tuesday 4 October 2011

Is retirement an effective approach to performance management?

The reaction to this month's abolition of the compulsory retirement age has highlighted some interesting issues for organisations of all sizes. Andrew Cave from the Federation of Small Businesses said "if you can't get rid of someone, you then have to go through the process of performance managing someone out of an organisation." He pointed out that, while large organisations may have the experience and HR back-up to manage this, "the average business in this country employs four people; the owner-manager doesn't necessarily have that expertise." 

Waiting for someone to retire doesn’t seem to be a great strategy for dealing with poor performance; what impact is their performance likely to have on the business before they go? If managers lack the skill to deal effectively with the poor performance of those approaching retirement, they’re probably equally ill-equipped to deal with the poor performance of younger staff. 

While it’s quite natural to want a problem to go away, getting rid of someone really should be the last resort. Improving their performance should always be fully explored first, and this is where the resources available to larger organisations can be an advantage. In my experience however, managers in large organisations quite often turn to HR expecting them to sort out the problem, preferably by getting rid of the individual, only to become frustrated when they realise they can’t totally absolve themselves of their responsibility for performance management. 

One of the challenges of being an owner-manager of a small business is that you are responsible for everything. If you lack the expertise to sell or to manage finances, you either have to learn these skills yourself, buy in expertise or face serious risks. The ability to manage poor performance is a similar essential skill.

Tim Schuler is a coach, facilitator and business partner. He specialises in bringing out the very best in managers, whether it’s their first management role or something they’ve been doing for a while. More information is available from www.tschuler.co.uk