Performance management is one of those areas where good intentions can quickly go wrong if mental health is part of the picture. Push ahead with a standardised process, and you risk making things worse, or ending up with a claim on your hands. Slow down and get the approach right, and you can address genuine performance issues fairly while properly supporting the person involved. Here is how to strike that balance.
Why this needs a different approach
A dip in performance rarely happens in isolation. Missed deadlines, reduced output, or a change in someone’s usual standard of work can all be signs of a genuine performance issue, but they can just as easily be linked to an underlying mental health condition.
Treating every performance issue the same way, regardless of cause, is where employers run into trouble. The starting point is not a formal process. It is working out what is going on.
Your legal position
If an employee’s mental health condition has a substantial and long-term effect on their ability to carry out normal day-to-day activities, it is likely to meet the definition of a disability under the Equality Act 2010. This does not require a formally diagnosed condition. Depression, anxiety, and trauma-related conditions can all qualify depending on the impact and duration.
Where a disability is in play, you have a duty to make reasonable adjustments before or alongside any performance process. You must also be careful that a decision to manage someone’s performance is not, even in part, due tosomething arising from their disability. Otherwise, it may give rise to a s15 claim (discrimination arising from disability).
This does not mean genuine performance issues cannot be addressed. It means the process needs to properly account for the individual’s circumstances before moving forward.
How to approach it properly
Have a conversation before you reach for a process. If you notice a change in someone’s performance, start with an open conversation rather than a formal meeting or warning. Ask what is going on, rather than assuming you already know.
Consider whether an underlying condition might be a factor. If the employee discloses a mental health condition, or you reasonably suspect one may be relevant, pause before continuing down a standard capability route.
Get medical input where relevant. An occupational health referral, or a referral or questions to someone’s therapist or coach, can help you understand whether a condition is contributing to the performance issue, what adjustments might help, and what a realistic timeframe for improvement looks like.
Adjust the process, not just the target. This might mean extending timescales, adjusting targets temporarily, breaking objectives into smaller steps, or providing additional supervision and support. What is reasonable depends on the role and the individual, so resist a one-size-fits-all approach.
Document supportively, not punitively. Keep clear records of the conversations, adjustments offered, and support provided. This protects you if the situation does not improve, but it should read as a genuine effort to support, not a paper trail built purely to justify a later dismissal.
Review regularly and follow through. Set a realistic review point, follow up on the adjustments you agreed, and be honest with the employee about progress. Silence or inconsistency creates uncertainty and often makes things worse.
Where genuine performance issues remain
Not every performance issue is linked to mental health, and not every mental health condition excusesunderperformance indefinitely. Where you have made genuine adjustments, sought medical input, and given a fair opportunity to improve, and performance still has not reached an acceptable standard, a formal capability process may still be appropriate.
The key is being able to show that you took the individual’s circumstances seriously before reaching that point. A process that looks reasonable on paper but ignored medical evidence or a disclosed condition is far more likely to be challenged successfully.
We would advise that you always take advice where a performance issue has become unsustainable but could be linked to a disability.
Employer takeaways
- A dip in performance is not automatically a disciplinary issue. Start with a conversation, not a process.
- Mental health conditions can meet the definition of a disability, even without a long-standing diagnosis.
- Use occupational health input to understand whether a condition is a factor and what adjustments might help.
- Adjust targets, timescales, or support before or alongside any formal process.
- Keep clear, supportive records that show genuine steps were taken before any capability action.
The bottom line
Managing performance where mental health is a factor is not about avoiding difficult conversations. It is about having them properly, with the right medical input and genuine adjustments in place, before deciding whether a formal process is actually needed.
Need help managing a performance issue where mental health may be a factor, or reviewing your capability process? Get in touch at enquiries@thrivelaw.co.uk or call 0113 869 8101.
