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We have PEP's (personal Improvment Plan) to address this situation.
How this works is to take the guys performance apart , with him , and then reason and explain where he is not meeting expectations , and by working together come up with a target or goal based plan for him to meet.
I have always found that firm but fair is the way to go.
Respect is a must , this guy might have a family to feed , a chip on his shoulder , a learning disability or any number of things you dont know about.
That however is not the companies concern , he is being paid to perform a task and is not reaching the standards being set by peers.
Analyse why ?
Is more Training required ? A mnetoring system ? would he benefit from shift work ? Any personal difficulties ?
No matter what happens the guy is going to be dissapointed he doesnt get his raise , howwever he needs to leave the review understanding why and understanding what he needs to do to make it next time out.
Dont hesitate to explain that you have a set budget for increases and that you need to recognize and reward your top performers. Or any other rationale behind your decision.
In my experience , any one not doigng a great job is fully aware of it already.
Explain why this decision has been made.
I have found it very helpful to have quarterly reviews where no raises are at stake , but points are awarded for achieving particular goals or targets. Come end of year you can explain that he is in the X%ile and so it becomes a lot easier to rationlize the decision. It is also a great aid to making sure that you are not unfairly treating a guy who may have had a terrible month that is at the front of everyones mind but is not indicative of what his yearly performance has been.
So points to remeber:
The employee has his own agenda and that has to be respected.
Dont be dictatorial (dont get into "that's the way it is")
Explain your rationale
Set achiveable and mutually agreed targets for improvment.
If the guy still has a grievance with how it has gone and you have followed the above advice then you can explain to him the appeals procedure if there is one .
Advise him that if he feels tha the decison is unfair or that not everything has been taken into account , invite him to put his case to HR or MD or whomever , and explain that what you will do is put forward the case you have just made to him.
Its all gotta be amicable.
Giving HR a heads up if appropriate is a good idea as mentioned by absorbentishe
Oh and one last thing , leave the door open , suggest an interim review a month or two down the line to see if the PEP is working or if focus has changed etc.
GoodLuck Mate
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