Case Study 31.

Performance Management

DEVELOPING PERFORMANCE MANAGEMENT AT

COMMUNITY CARE

The case
Community Care is a charity founded in the 1980s when the government of the day
introduced its Care in the Community policy, which involved taking people with learning
difficulties out of institutions and putting them in the care of the community, ie the social
services department of the local authority. The aim of the charity is to provide additional
care facilities in non-residential centres that supplement those provided by local
authorities. It is financed partly by contracts with local authorities (70 per cent) and the
rest by fund-raising.
The charity operates mainly in the southern half of England, with headquarters in
Crawley. A board of trustees is responsible for policy and overall direction. The Chief
Executive reports to the Chair of the Board. There are four regions, each headed by a
regional director with, on average, a staff of two development officers, two care team
leaders and three administrators. Between them the regions operate 65 centres, each
with about six full-time or full-time equivalent staff supported by volunteers. The
functions in headquarters, each headed by a director, are community operations,
development, fund-raising, finance/IT and HR. The total number of staff employed is
582, 32 in the regional offices, 390 in the care centres and 160 at headquarters. There is
a recognized and active trade union with 55 per cent membership.
As such a large proportion of its income depends on contracts with local authorities,
Community Care has to keep them satisfied. There are two directly competing not-for-
profit organizations in the south of England and Community Care is losing business to
them, mainly because its clients do not believe they are getting the same value for
money. In other words, Community Care has a performance problem.
There is a somewhat moribund performance appraisal scheme in headquarters. In
the regions the team leaders conduct ‘supervisions’ with care workers to review progress
and deal with case issues. These supervisions could be regarded as a type of appraisal,
 Developing Performance Management at Community Care 2

but there is no formal process for reviewing performance in the round (supervisions
concentrate on case work) or for identifying development or performance improvement
needs.
The HR Director appreciated the strategic need to improve performance and her
recommendation to the Chief Executive that a comprehensive process of performance
management should be introduced was accepted. She decided two things in advance:
first, that she needed external advice, and second, that the performance management
process should be developed by a joint working party, chaired by herself, consisting of
the directors of fundraising and finance, a regional manager, a care team leader, two
care assistants, two members of headquarters department and two trade union
representatives. It was a rather large and unwieldy group but she thought it was
essential to make it reasonably representative. These proposals were agreed by the
Chief Executive. Also with the agreement of the Chief Executive she engaged an
independent consultant as an adviser following a ‘beauty contest’.
The HR Director and the external consultant produced a document to be
communicated to all staff that set out the purpose of the project. They then held
preliminary discussions with each member of the working party either individually or, in
the case of the trade union representatives, together. The directors not on the working
party (the Chief Executive, Director of Operations and the Development Director) were
also consulted, as were some additional staff in the regions and at headquarters. The
aim was to identify in advance any issues that might be brought up by the working party.
Some people, especially the trade union representatives, were suspicious of this
procedure as they felt it might pre-empt or undermine the deliberations of the working
party. The HR Director tried to allay these fears by explaining that the aim was simply to
ensure that the background to the development project was fully understood and that the
information obtained from this preliminary survey would mean that the working party
would be better prepared for its deliberations. She promised to brief the working party on
the outcome of the interviews at its first meeting. The union representatives and one or
two managers were not entirely convinced by this but made no further comments.
The survey established that the need to do something about performance was
generally accepted and that the existing performance appraisal scheme in headquarters
had to be replaced. The Chief Executive was supportive. He was familiar with
performance management in his previous job as the director of a local authority social
services department. He believed that in principle the aim should be primarily

This resource is part of a range offered free to academics and/or students using
Armstrong’s Handbook of Human Resource Management Practice, 11th edition, as
part of their course. For more academic resources and other FREE material, please
visit www.koganpage.com/resources and then click on Academic Resources.
 Developing Performance Management at Community Care 3

developmental and that the process should be based on performance agreements, the
review of performance against agreed objectives and a competency framework, the
agreement of performance and personal development plans, and the use of learning
contracts. But there were a number of issues:
● The Finance Director suggested that the requirements for performance
management varied between different functions; for example, the context in
regional care operations was quite different from that in fund-raising – while there
should be a set of agreed basic principles on the approach to be followed, each
function could decide for itself the details of the scheme, such as the type of
records to be kept, whether or not to use ratings, and how often reviews should
take place.
● The Fund-raising Director wanted a system based on target setting and overall
ratings that could be used as the basis for a performance-related pay or bonus
scheme (at present pay progression was based entirely on service).
● The Operations Director and a number of regional directors said that they saw no
real need for a performance management scheme – the existing system of
supervisions fulfilled this purpose quite adequately.
● Directors and managers universally said that they did not want an over-
bureaucratic system.
● The staff who were consulted were doubtful about the ability and, indeed,
inclination of their team leaders or managers to conduct performance management
reviews.
● The trade union representatives said that they were concerned that the scheme
would be used simply as a means of generating information upon which
disciplinary action could be based; they thought managers would have favourites
and would not be able to conduct fair appraisals; and they were strongly against
any form of rating or performance-related pay.

The task
If you were the HR Director, how would you deal with each of the issues mentioned
above in the working party meetings or elsewhere? Where appropriate, prepare
arguments for and against the various points of view and indicate your own views on the
subject.

This resource is part of a range offered free to academics and/or students using
Armstrong’s Handbook of Human Resource Management Practice, 11th edition, as
part of their course. For more academic resources and other FREE material, please
visit www.koganpage.com/resources and then click on Academic Resources.
 Developing Performance Management at Community Care 4

Comments
The issues set out in the case are fairly typical in any situation where performance
management is being developed, though they don’t necessarily all appear at once!
However, they can do so in one form or another and this is what occurred in the actual
situation upon which this case is loosely based. The basic concept of performance
management is quite simple and obvious. The ultimate issue is making it work. There
are no textbook answers to any of the problems raised here. But the demands on
whoever is responsible for introducing performance management are considerable and,
somehow, these issues have to be resolved or at least agreement reached on how they
will be resolved before the process is launched, possibly in a pilot scheme. Particular
attention has to be paid to bringing everyone on side – ownership is vital. It also has to
be remembered that performance management is a process that requires the exercise of
considerable skill by those who practise it, including the recipients of performance
reviews as well as their managers. Much thought has to be given to how those skills can
be developed – half-day training courses (a common approach) are not enough.

This resource is part of a range offered free to academics and/or students using
Armstrong’s Handbook of Human Resource Management Practice, 11th edition, as
part of their course. For more academic resources and other FREE material, please
visit www.koganpage.com/resources and then click on Academic Resources.