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Employment Update for Small Businesses
August 2009
Dear Subscriber,
 
I promised last month to entertain you with a picture of me in cap and gown, so here you go!  I hope you enjoy it.

This month I am bringing you up to date with the new National Minimum Wage rates due to come in shortly; some news on the default retirement age of 65; and ten top tips for performance management.
 
Please contact me if you would like to find out a bit more about any of these issues.  If you need any help or advice why not take advantage of my free initial consultation.
 
Please forward this email to any of your contacts who might find it of benefit. 
 
Peter Etherington
Regards
 
Peter Etherington
Tel: 01664 430373
Are you paying your staff enough?
Revised Minimum Rates
The National Minimum Wage rates will  increase on 1 October 2009 from:
  • £5.73 to £5.80 an hour for workers aged 22 and over
  • £4.77 to £4.83 an hour for workers aged 18 to 21
  • £3.53 to £3.57 an hour for workers aged 16 to 17
Apprentices under 19 and those over 19 but in the first year of their apprenticeship are exempt from the National Minimum Wage, but they must be paid at least £95 per week.
Too old to work?
Review of Default Retirement Age
The Department of Work and Pensions has announced that a review of the default retirement age of 65 is to be brought forward to 2010.  When the Employment Equality (Age) Regulations were introduced in 2006, the Government undertook to review this default age in 2011.  The reason for bringing it forward is as a direct result of the "...very difference economic circumstances today..." 

It seems likely that the default age will be increased at the very least; it may well be removed completely.  Any change, however, would not take effect until 2011 to allow employers time to adjust.
Are you putting up with poor performance?
10 Practical steps to managing performance
1. Provide a comprehensive induction for new starters.
Starting a new job can be very daunting and you can make sure you get employees on your side from day one by making them feel welcome.  A well planned induction shows that you value your employee and engenders their loyalty.  It also ensures that they learn all the important issues in a structured way.
 
2. Provide good supervision.
Make sure someone is responsible for taking the new starter under their wing.  In small companies this could be the owner/MD, in larger companies it may be their line manager.  Sometimes providing a mentor, who need only be a more experienced member of staff, works well (it can also give a boost to the mentor to be recognised in this way).
 
3. Provide a job description.
It sounds obvious, but employees need to clearly understand what they are expected to do at work.  A basic job description, which sets out the employee's key responsibilities, can ensure this is clear and that there is no confusion.

4. Remember the one year rule. 
No matter how good your recruitment procedures, it is always possible that you find you have recruited the wrong person, or someone who started out full of enthusiasm goes off the boil.  The first year of employment is key, as employees cannot normally claim unfair dismissal if dismissed during that time.  It is important, therefore, that you tackle any issues at an early stage and ensure that you are happy to keep someone on well before they reach their first anniversary.
 
5. Use a probationary period
Rather than rely on the one year rule, it is often effective to have a clear probationary period (three months or six months are both popular).  During this time you should monitor performance, provide whatever support is necessary and carry out regular reviews.  At the end of the probationary period you can then either confirm that they have passed, terminate employment, or extend probation if you are still unsure.

6. Set objectives.
Once your new employee has settled in and completed the induction, you should agree a few objectives with them to cover the following 12 months or so.  Make sure that the objectives can be measured, meet the needs of the business and are realistic.  You shouldn't set an objective for every task the employee carries out, just a few key areas are normally enough.

7. Monitor performance.
You should meet your employee regularly on an informal basis unless you work alongside them anyway.  That way you can keep tabs on how they are getting on and that they are on target to achieve their objectives.
 
8. Hold an appraisal. 
At least once a year you should hold a formal appraisal meeting with your employee.  You should discuss their objectives and decide whether or not they have been met.  If not, explore the reasons for this and see if there are any training requirements that can be met.  If the reason is poor performance, this should be noted at the appraisal but hopefully you will have already started to tackle this through a performance management procedure (see below).  Finally, make sure new objectives are set for the coming year.

9. Deal with poor performance in time.
Don't let poor performance drag on; deal with it at the earliest opportunity (don't forget the one year rule, above).  Initially you should discuss this with the employee on an informal basis.  If it still persists you should follow a performance management procedure (which may be the disciplinary procedure or follow similar steps to it).  The employee should be warned that they are not performing to an adequate standard and be given a period over which to improve (with any additional training necessary and/or additional supervision).  Ultimately if the warnings do not work, the employee should be dismissed.  As long as a reasonable procedure has been folllowed, the dismissal is likely to be fair.
 
10. Reward good performance.
Everyone likes to hear that they are doing a good job so don't forget to tell employees that you are pleased with their performance when appropriate.  You don't have to wait for the appraisal to do that.  Small rewards, such as meals out or an afternoon go-karting, can often have a significant positive impact (they can also help reinforce good team spirit).  Sometimes more structured financial awards can work, such as bonuses, but they need careful management and can sometimes lead to jealousy or other morale issues within a team.
 
Contact me if you would like to discuss these issues further

Peter Etherington Employment Law Services
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