Performance Management Under Changing Employment Law

Why Employers Need to Review Their Performance Management Processes

Managing employee performance has always been an important part of running a successful organisation. However, with significant changes to employment law expected under the Employment Rights Act 2025, employers may need to take a much closer look at how they manage performance issues in the workplace.

For care providers and other employers, processes that may once have been considered sufficient could soon face greater scrutiny, particularly around fairness, consistency and documentation.

This means effective performance management is no longer just an HR issue, it is also a legal and operational priority.

Why Performance Management Matters

Addressing poor performance early is important for both employee development and organisational stability.

When performance concerns are not managed effectively, the impact can spread across the wider business.

This may lead to:

• Reduced team morale
• Lower productivity
• Increased pressure on high-performing staff
• Inconsistency in service delivery
• Higher employee relations and legal risk

In the care sector, where workforce pressures are already significant, these issues can quickly affect both operational performance and standards of care.

How Employment Law Changes Could Affect Employers

The Employment Rights Act 2025 and anticipated changes to unfair dismissal rules are expected to increase expectations around how employers manage capability and conduct concerns.

Employers may need to demonstrate more clearly that:

• Processes are fair and reasonable
• Concerns are properly documented
• Employees are given appropriate support
• Managers follow consistent procedures

Without clear and compliant processes, organisations could face increased risk when handling performance related issues.

Why Managers Often Find Performance Conversations Difficult

Performance management can be challenging, particularly for managers who have not received formal people management training.

Common concerns include:

• Saying the wrong thing
• Escalating conflict
• Damaging working relationships
• Fear of legal consequences

As a result, difficult conversations are sometimes delayed or avoided altogether, which often allows problems to become more serious over time.

What Does Good Performance Management Look Like?

Effective performance management should be clear, consistent and supportive.

This includes:

• Setting clear expectations
• Holding regular performance conversations
• Documenting concerns appropriately
• Providing employees with support and opportunity to improve
• Applying processes consistently across the organisation

A structured approach helps protect both the employee and the employer.

What Should Employers Be Doing Now?

With employment law continuing to evolve, now is a good time for organisations to review whether their current processes remain fit for purpose.

Key areas to consider include:

• Are policies and procedures up to date?
• Do managers feel confident handling performance concerns?
• Are conversations and decisions documented properly?
• Is the process applied consistently across teams?

Taking proactive steps now can help reduce future risk and improve organisational resilience.

Join An Upcoming Webinar

To help employers understand these changes and improve their approach to performance management, our trusted partner will be hosting an upcoming webinar:

Effective Performance Management

• 📅 21st May
• 🕑 2.00 pm

The session will explore practical and compliant approaches to managing employee performance under changing employment law.

Topics will include:

• Performance management best practice
• Handling difficult conversations
• Employment law considerations
• Reducing organisational risk
• Supporting managers effectively