By Simon Fenton, Partner, Tomas Eggar.
At the UK Manufacturing Summit 2011 the shared view was that it was people issues, which would be the cornerstone of the rebuilding of UK manufacturing. The need to recruit and retain good people is the key. Each of the words in that previous sentence is relevant. It is not just about 'recruiting and retaining', but it is about 'good' people.
As much emphasis needs to be given to weeding out 'bad' people as to getting and keeping the good ones. It must be remembered that you cannot recruit 'good' employees if 'bad' ones are blocking their way.
It used to be that if you waited long enough at least a 'so-so' employee would eventually be obliged to retire. But even that is no longer the case. Of course, an employee can opt to retire, but an employer cannot insist that an employee leaves on their 65th birthday. The government's view on this is that 'if you're good enough, you're old enough' and the natural corollary of this is that 'if you're good enough, you're not too old'. The attitude is 'keep the 'good-uns' working for as long as they are doing the business because the state cannot afford to pay top up welfare payments for those with inadequate pensions.
Actually, the scrapping of the default retirement age in April this year has given added incentive for manufacturers to put into place rigorous appraisal procedures. Appraisals and performance plans, properly utilised, will weed out underperforming employees of whatever age.
Since this is now realistically the only method of removing elderly employees (and to only subject older employees to appraisals would in itself be age related discrimination), appraisals are clearly something that must be undertaken. Moreover, if you are going to put into place an annual appraisal procedure, you might as well do it right.
The usual drawback with appraisals is that those giving the appraisal feedback want to be nice and encouraging. To give a faltering employee a good appraisal does not address the business's concerns and does not give that employee the opportunity to put right those matters, which give their manager cause for concern in the first place, because the employee doesn't know about it.
Appraisals are often used to give encouragement and a pat on the back. Human nature suggests that we want to work harmoniously with our colleagues and telling them that they are lacking in a certain area of work is difficult. Not many people naturally take to this type of confrontation (but we all know people who are, frankly, a bit too keen). It is for this reason alone that training is essential. The standards need to be consistent across the business and people need to be trained to give the correct assessment and feedback in a way which does not lead to employment tribunal claims.
The advice has to be that if you have an appraisal procedure already, you should review it for effectiveness. Perhaps give appraisers top up training. If you have not got an appraisal system in place, get one, train people to use it, monitor it and make sure it works. Recruiting and retaining the right people in manufacturing depends on removing the wrong people.