the measurement, causes and consequences of poor employee performance

7.4 HRM Strategy – Approaches to HRM

Objective

Measure, analyse the causes of and evaluate the consequences of poor employee performance, and select appropriate HRM interventions in line with the Cambridge 9609 A‑Level syllabus (Topic 7.4).

1. The Performance‑Management Cycle (Plan‑Do‑Check‑Act)

The syllabus expects candidates to understand the whole cycle, not just the measurement stage.

1. Plan: Set clear, measurable objectives (SMART or Management by Objectives – MBO). Identify required resources, training needs and any contract‑type considerations.
2. Do: Employees carry out work; managers provide support, equipment and a safe environment.
3. Check: Monitor performance using the tools described in Section 2.
4. Act: Give feedback, apply corrective actions, reward good performance and revise objectives.

Accurate measurement (Section 2) is the “Check” that informs the “Act” phase.

2. Measuring Poor Employee Performance

Early identification of under‑performance enables timely, cost‑effective interventions.

2.1 Core Measurement Tools

• Performance Appraisals: Formal (annual, semi‑annual) or continuous reviews that compare actual output with pre‑set targets.
• Key Performance Indicators (KPIs): Quantitative metrics such as sales volume, error rate, customer‑satisfaction score, on‑time delivery %.
• 360‑Degree Feedback: Input from managers, peers, sub‑ordinates and, where relevant, customers.
• Attendance & Punctuality Records: Absence rates, lateness, overtime patterns, shift‑swap frequency.
• Productivity Ratios: Productivity = Output (units) ÷ Input (hours).

2.2 Technology‑Enhanced Measurement

• HR Information Systems (HRIS): Centralise attendance, training, appraisal scores and KPI data.
• Real‑time Dashboards & AI Analytics: Automated alerts when performance deviates from targets; predictive models flag employees at risk.
• E‑learning & Performance‑Support Tools: Track completion rates and link learning outcomes to KPI improvement.

2.3 Linking Measurement Tools to SMART/MBO Objectives

Each tool should map to at least one element of a SMART objective (Specific, Measurable, Achievable, Relevant, Time‑bound) and support the MBO process.

2.4 Balanced Scorecard & Benchmarking

A balanced scorecard ensures performance is viewed from four perspectives: Financial, Customer, Internal Process, Learning & Growth.

Benchmarking against industry standards or internal best practice highlights gaps that may explain poor performance.

3. Causes of Poor Employee Performance

Four broad categories are examined, each linked to diagnostic indicators and to motivation theory.

3.1 Individual Factors

• Lack of skills or insufficient training – identified through skill‑gap analysis.
• Low motivation or disengagement – explained by Maslow’s hierarchy of needs (unmet esteem or self‑actualisation) and Herzberg’s two‑factor theory (absence of motivators such as achievement).
• Personal problems (health, family, financial stress) – may affect attendance and concentration.

3.2 Job‑Design Factors

• Unclear role expectations or ambiguous responsibilities – leads to role conflict.
• Excessive workload, unrealistic targets or poorly sequenced tasks – raises stress and reduces Vroom’s expectancy of success.
• Monotonous, repetitive work – limits intrinsic motivation (Herzberg’s hygiene factor).

3.3 Organisational Factors

• Poor leadership style or ineffective communication – undermines perceived equity (Equity Theory).
• Inadequate resources, outdated equipment or insufficient staffing – creates barriers to performance.
• Limited career‑progression opportunities and weak reward systems – reduces expectancy and instrumentality (Vroom).

3.4 External Factors

• Economic downturns or sector‑wide recession – lower morale and increase job insecurity.
• Industry skill shortages – increase pressure on existing staff.
• Regulatory changes – add compliance workload and stress.

4. Consequences of Poor Employee Performance

• Reduced Productivity: Lower output per employee raises unit costs.
• Decreased Quality: More errors, re‑work and warranty claims damage brand reputation.
• Higher Absenteeism & Turnover: Disengaged staff miss work more often and are more likely to leave.
• Financial Impact: Direct costs (overtime, remedial training) plus indirect costs (lost sales, opportunity cost).
• Negative Workplace Climate: Poor performers can demotivate high‑performing colleagues – a “contagion” effect.
• Legal & Ethical Risks: Inconsistent handling can lead to discrimination claims, data‑protection breaches or health‑and‑safety violations.

5. Legal, Ethical and Statutory Considerations

• Employment Law: Contracts of employment, notice periods, unfair dismissal procedures.
• Health & Safety: Duty of care; poor performance may increase risk levels.
• Data Protection (GDPR/Data Privacy): Secure handling of performance data, consent for 360° feedback, right of access.
• Ethical Management: Fair, transparent appraisal processes; avoiding bias; respecting employee dignity.

6. HR Strategies to Address Poor Performance

6.1 Hard vs. Soft HRM – Example Box

6.2 Management by Objectives (MBO)

• Set mutually agreed, SMART objectives.
• Link objectives directly to appraisal criteria and reward structures.
• Hold regular review meetings to monitor progress and adjust targets.

6.3 Flexible and Temporary Contracts – Checklist & Cycle Link

Modern labour markets include zero‑hours, part‑time, job‑share, agency and gig‑economy arrangements. The following checklist summarises statutory rights and the impact on the performance‑management cycle.

6.4 Technology‑Driven Interventions

• Performance Dashboards: Real‑time visualisation of KPIs for managers and employees.
• Predictive Analytics: AI models identify patterns that precede poor performance (e.g., sudden drop in attendance).
• E‑Learning Platforms: Tailor learning paths to address identified skill gaps.
• Digital Documentation: Secure, searchable records of appraisals and improvement plans help meet legal requirements.

6.5 Systematic Intervention Process

1. Diagnose: Use measurement tools and root‑cause analysis (e.g., fishbone diagram, skill‑gap analysis).
2. Plan an Improvement Programme: Choose from training, coaching, role redesign, workload redistribution, or flexible‑working arrangements.
3. Set SMART Targets & Timelines: Align with MBO and the “Plan” stage of the performance‑management cycle.
4. Implement & Support: Provide resources, mentoring, or employee‑assistance programmes.
5. Review & Record: Conduct regular check‑ins, update the HRIS, and document discussions to protect against legal challenges.

7. Summary Table – Linking Causes, Indicators, Theoretical Links & Consequences

8. Suggested Diagram (Flowchart)