Imagine Theresa May had been appointed CEO of your company on 11 July 2016 (instead of being appointed Prime Minister).
Less than a year later, supposing Theresa was so confident about winning a piece of work for you that she suggested to a major client to invite tenders? Unfortunately the pitch didn’t go too smoothly for the company. Firstly, Theresa, decided not to show up for a presentation (sending a colleague in her place). Secondly, Theresa kept on offering a strong and stable way of working, but her words actually got a bit repetitive after a while. Thirdly, Theresa promised something, backtracked, and then, worse still, didn’t admit she had backtracked. Surprisingly, Theresa still got the work for the next five years, although because of her lacklustre performance she had to reach a deal with another company.
As board members how would you have tackled someone’s performance in those circumstances?
“On your bike”, you might have said. Well, you could have been within your legal rights. Generally, employees need to have at least two years’ service to bring unfair dismissal claims. Before reaching two years’ service, normally you would therefore be able to dismiss an employee, even a senior one, provided the right notice is given. The notice period for a CEO would usually be three or six months.
However, if you’d invested a lot of time and energy in Theresa, you might well have wanted to giveTheresa an opportunity to turn things around. It’s never easy managing the performance of senior employees. But you could have set Theresa some targets, such as doing a few seminars for clients and performing well at the company away day. You could also have recommended that Theresa attended training courses on presentation and communication skills, public speaking, management, strategy and leadership.
Of course had Theresa been appointed over two years ago, with accrued unfair dismissal rights, you would probably have had to put Theresa on a PIP (a performance improvement plan). That could have been quite challenging. An alternative option would have been to have what’s called a “protected conversation” and try and reach a deal for Theresa’s departure. As long as there was no improper behaviour, such as blackmail, the “protected conversation” would have been inadmissible in any general unfair dismissal proceedings. The parties would usually then have entered into a settlement agreement.