OK there’s a lot being written about the Beecroft Report at the moment and I’ve hesitated to write anything at all. However, there’s an important aspect to this story which just doesn’t seem to be coming out loudly. Who is underperforming?
The Telegraph’s story yesterday included a headline saying :
“The majority of employers back controversial proposals to allow “no-fault dismissals” for under-performing workers, a survey has revealed.”
The story then reveals it’s not the majority of employers – it’s the 1,100 respondents to an IoD survey where 76% backed the proposals. The director-general of the Institute of Directors, Simon Walker, is quoted as saying :
“Our members prefer Beecroft’s ideas on unfair dismissal to the watered-down model being promoted as an alternative, so the Government should not waver”. “Beecroft’s changes to dismissal procedures would reduce regulatory burdens and encourage businesses to recruit more people — anything less would have a considerably weaker effect.”
I’m not going to assume what the UK business community do or don’t feel about the Beecroft report. Plenty of others are already doing this. However, the positioning of the promoted benefit to business overlooks a fundamental part of good business.
This is not really about business growth is it?
If you are planning to grow your company through recruiting more people then your focus is on growth not the regulatory burdens of removing staff at some theoretical point in the future when they have failed to perform. So “the story” here to a large extent doesn’t really deal with the dynamics of successful businesses enjoying growth.
The issue is then more one of how you can replace under-performing staff in businesses regardless of their economic success. The process of staff replacement may on occasion be business enhancing… it could involve recruitment… but the net effect is not necessarily greater employment or business growth, in the short term or possibly ever.
Are the headline grabbing stories persuading us to think of the Beecroft report as a way to business growth? Possibly… regardless, this not about business growth in successful businesses is it?
This is about underperformance. By whom?
There are a multitude of reasons why staff may under perform. However, if you can’t deal effectively with someone who is underperforming with current legislation etc. then what does it actually say about you as a business or as a manager?
In my experience, it’s those who can thrive through adversity who are successful.
If you can’t effectively deal with under-performance in your business today, then can you actually nurture great performance through people at all?
Could revised legislative changes help perpetuate underperformance of managers who are not able address performance through developmental conversations?
The Irony of Beecroft
Have you seen the reported explanation from Adrian Beecroft of what/who influenced his thinking…
“It is actually a human resources director whom Mr Beecroft was once forced to dismiss, an experience that made the venture capitalist determined to reform the system. “We had an HR man who was very good at the technical stuff, but hopeless with people so we dismissed him, having thought we’d gone through the process,” Mr Beecroft explains. The company then placed an advert for a replacement who was “good with people”. “And he sued us for discrimination on the grounds that everybody knows that people who are good with people means we want a woman. We went to the lawyers and said this is ridiculous and they said we’d have to pay and so we paid him.” The £150,000 payoff that Mr Beecroft’s firm had to make to the under-performing employee was, he says, a typical experience for entrepreneurs and small business owners. Many people simply do not bother to hire because of the problems it can cause, he claims.”
What is not said by Mr Beecroft is how his firm managed:
- the hiring decision/process.
- the performance management process.
Then what is said but won’t be addressed by his recommendations…
- the bone of contention being an issue of discrimination.
In Adrian Beecroft’s own words… “Some employee protections, such as those preventing discrimination or dangerous working conditions, must be maintained.”
It’s easy to read this and think red-tape & legislation led to an extortionate payout of £150k… the reality is that perceived or actual discrimination led them to settle out of court as the lawyers must have perceived there was a risk of being found wanting in a tribunal.
Ironic isn’t it? What does this say about his firms ability to lead and manage people let alone manage their performance?
Recommended Further Blog Reading
Well said David. Im just reading the report so as to make sure it get the full context and not that of the national press! But already im rolling my eyes. It is clear to me, and many others out there, that Beecroft (and his business) are the underperformers. He actually seems incompetent in people matters.Take this gem:"Many regulations, conceived in an era of full employment, are designed to make employment more attractive to potential employees. That was addressing yesterday’s problem."If this wasnt in a report that may potentially influence Ministers (another incompetent bunch) then it would be extremely funny. But it isn't.Bottom line – if it takes Beecroft or any business leader 11 months to work out that someone is not performing then they shouldnt be managing or leading. Period.
Sad but true Gareth… you'd think any Government would aspire to demonstrate best practice people management in all respects and with all parties they choose to work with.