Why New Powers to Sack Workers Would Backfire

Adrian Beecroft's hotly anticipated report to number 10 on how to improve growth and efficiency through changing employment law is now characterised by one controversial suggestion. Doing away with unfair dismissal.

Adrian Beecroft's hotly anticipated report to number 10 on how to improve growth and efficiency through changing employment law is now characterised by one controversial suggestion. Doing away with unfair dismissal.

Vince Cable and Nick Clegg were right to challenge this provision (as has been reported) asking "where is the evidence base?". His challenge was not only valid, but there is considerable research evidence against this direction.

Following the principle of unforeseen consequences, Beecroft's suggestion further undermines one of the most poorly conducted management processes I have seen in my career - performance management, and if adopted I would anticipate the worst abuse of this change in the very area the government would like to see productivity increases - the public sector.

So why is Beecroft so wrong?

There is a considerable body of evidence in academic and practitioner research (e.g. The Macleod Report on Employee Engagement to the Dept of Business, Innovation and Skills in 2009) that how individuals and teams are managed can impact productivity.

Put simply, better productivity will be seen in teams where managers who ensure employees have the information and equipment to do their job, allow their workers a degree of latitude over how they do their job and ensure no matter how small a cog they are, their workers feel part of the bigger picture.

Twelve years ago I studied two teams in a production environment. They were measured against a number of areas - including those above. Both worked on the same production line doing the same job, and yet scored at opposite ends of a database for these questions (one at the 5th percentile, one at the 95th). Line efficiency was also significantly different. The team leaders were swapped around, and the line efficiency difference disappeared.

One manager had been conducting team briefings regularly - knew his team well, the culture was good. The other team was led by someone who was somewhat green in management skills. This work was based on a paper by Harvard Business Review in 1998 looking at the American retailer Sears Roebuck - that worker attitude about the job affects productivity; and research by the Gallup Organisation highlighted the extent to which the manager can affect the worker attitude.

So while Beecroft is suggesting that a manager is enabled to sack a worker more simply on grounds of performance, quite simply - the evidence suggests that the performance of the worker can be significantly influenced by the manager. So where does the real fault lie?

Of course if someone is still under-performing - what are you to do? I have been asked to look at under-performance across my career and a sorry tale has often emerged. A manager wants to dismiss someone. Fair enough - let's start the process by looking at the record of performance management. The record going back a few years is of someone who is performing at a satisfactory level. If Beecroft's suggestion is adopted there is less incentive on doing performance management properly, as the decision no longer needs proper justification.

In any kind of relationship breaking down there is a vulnerability to "confirmation bias". We accelerate towards demonising the other party, we over-attend to information that supports a premise and downplay contrary evidence. Performance management - if carried out well - can counter this through creating transparency and better decisions.

Having worked across numerous sectors : FMCG, Retail, Financial, Service, Public and Charity something has struck me over the years. The more timely visibility of a bottom line the more transparent poor management practice becomes. While a bad manager can justify to their boss why someone should be sacked - if team performance doesn't change, at some point the finger comes of blame should come to rest on the manager. In the public sector there tends to be poorer and less timely feedback on performance - so the poor manager evades detection for longer.

Beecroft's recommendation on unfair dismissal is rightly being challenged and I would be surprised if it were adopted, if it were it would be a bad managers charter and all the evidence points to that diminishing productivity. And that would be exactly the opposite of what he is setting out to achieve.


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