Shape up or move on: A new performance management trend?

Lloyds Banking Group has announced a new policy placing its lowest 5% of performers on formal performance plans, with dismissal as a possible outcome, reflecting a new performance management trend.

In an article for Employee Benefits, Employment Partner Jonathan Mansfield, explored what this means for employers.

He noted that while the policy reflects growing pressure on organisations to address underperformance, it risks creating legal and cultural problems if applied without fairness or clarity.

Jonathan explains that performance improvement plans must set out clear and measurable expectations. Employees should be told precisely what needs to change, given reasonable time to improve, and offered a right to appeal. Managers should also ensure the process respects the implied duty of trust and confidence.

He warns that a heavy-handed approach could lead to claims for constructive or unfair dismissal. Settlement agreements may provide a practical exit route, provided they are handled correctly.

With day one unfair dismissal rights expected next year, Jonathan says employers should review their procedures to reduce risk and ensure performance management remains fair and legally sound.

Read the full article on Employee Benefits: Jonathan Mansfield: Shape up or move on: A new performance management trend?