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Redundancy or performance management: dealing with the effects of the pandemic

In the last year we have seen many businesses affected in different ways by the pandemic. For those employers who have been fortunate enough to avoid the need for compulsory redundancies, 2020 has meant that they have seen very little natural reduction in headcount. Most employees are choosing to stay put in their current roles due to the uncertainty and economic downturn the pandemic has caused.

This can be an issue, as many of these employers anticipate a natural attrition of employees for budgeting purposes. Similarly, the move to working from home has uncovered performance management issues for some employers. With the end of lockdown growing closer, many employers are looking to ensure their business and workforce are in the best and most effective form.

It is therefore important to clarify the position between a genuine redundancy situation, and when it is more appropriate to performance manage an individual.


Last year in the largest recorded rise since May 2009, the UK’s unemployment rate jumped from 4.5% to 4.8% in the three months leading up to September 2020, reflecting a 243,000 person increase. Interestingly, the unemployment rate among young people aged 16 to 24 was significantly higher at 14.6%.

Redundancies also increased, with the number of employees being made redundant reaching 314,000 compared with 227,000 which was previously the highest recorded figure since 2009. There is speculation as to whether employers made employees redundant during this period in anticipation of the end of the Coronavirus Job Retention Scheme (CJRS) which has now been extended until the end of September.

It is therefore worth stressing that redundancy should be used solely as a means of managing headcount. Redundancy is a very different proposition to performance management as this removes roles in their entirety, not poor performers only.

Redundancy can be expensive, and the position cannot simply be re-filled by someone who can do the role more effectively. Whilst redundancy is a potentially fair reason for dismissal, filling the position exposes an employer to the risk of an unfair dismissal claim being made against them, on the grounds the redundancy was not genuine.

Performance Management

Fair and effective performance management takes time. In a world where frequency of contact and physical supervision has been limited, it is harder to monitor and measure performance. The pressures of the pandemic with regards to childcare, shielding relatives, poor home workstations, and even WIFI issues have become part of daily working life for many.

Now more than ever, employee engagement and check ins are vital. Communication is the key to understanding whether any employees need help and setting development goals. If the employee has genuine reasons for their drop off in performance, engagement will be essential to understand whether any support can be offered to manage and improve this.

Performance management for remote workers can be intrusive for the employee. However, the sooner an employer acts the better. In the absence of supervision, poor performers are unlikely to get better. A proactive approach and providing a performance plan early gives more opportunity for performance to improve.

The most difficult conversations can be done professionally, efficiently and compassionately. A common theme we have seen with many of our clients is an understanding of the pressures their staff are facing, an appreciation of their loyalty during this time of crisis, as well as a need balance this against the requirements of the business to ensure it bounces back to full potential when lockdown ends. By planning conversations carefully and being flexible in approach this balance can be achieved.

It is important to set clear expectations if there is hope of a successful PIP. It may be simpler in the short term to tell such an employee that their role is redundant, but the consequences if this is not genuinely the case can be far more damaging.

Now is the time for businesses to focus on the performance of their workforce, as we hope to ease back to the new normality. Proactively assessing performance across your organisation gives you an opportunity to engage with your staff and shape your talent.