By Shirley Barnes, Client Relationship Director, Dinamiks Ltd

The performance, talent and skills of zero hours contract staff can be managed, and ROI realised, by the introduction of cloud-based ways of identifying and retaining high performers.

At the same time a business can build a picture not only of the skills and competencies of the high performers but also of the lower performers, and help them improve.

Heads of payroll can be freed up from performing mundane tasks to address the introduction of Universal Credit, the phasing in of which is not due to end until 2016. The new cloud-based management system can be rolled out to all other staff, to measure, analyse and help improve their performance as well.


Employee performance and talent management systems tend to be embraced by enlightened businesses or those intent on urgently seeking a boost to productivity - or a change in employee behaviour, for example by motivating staff to “pull in the same direction” and thereby aid overall performance.

Small and medium-sized enterprises (SMEs) outside these types won’t be tempted to try a system unless they can be certain it will provide hard benefits. To them, new systems equate to a distraction and time being used that they think could be better spent elsewhere in the business. This is probably especially true where zero-hours contract staff are concerned, because the business is primarily interested in maintaining a low manpower cost and scheduling people accordingly to maximise that outcome.

The business may, though, use a performance and talent management system for its non-zero-hours contract staff to obtain a record of individuals’ performance and where training, if any, is required, and to improve productivity.

But what about zero-hours contract staff? Neither they, nor their employer, will have a record of their performance, capability or development if they don’t participate in appraisals. On the plus side for the staff, records like these could allow them to market themselves more effectively and address any skills and competencies gaps they have. On the downside for the employer, the staff, armed with the records, might be tempted to leave for better or more secure prospects elsewhere.


Although it’s unlikely an employer would want to take on the overhead of a performance and talent management system just to support zero-hours contract staff, they could be. Yes, it would be providing a means for the staff to improve themselves and find better-paid employment, leaving the business with gaps in its workforce, but there is another argument.

It is that the employer would benefit from using a system to build a picture of the talent, skills and performance available in its pool of zero contracts hours staff, so that it can keep top performers onside, for example with performance related pay and perhaps other perks. There should be no issue with that from the employer’s perspective; after all, some businesses already use performance management systems to help look after performance related pay and allocate bonuses. Their ROI is proven.

Forget direct government funding, but…

There is a case for saying the government should provide funding to SMEs to enable zero-hours contract staff (and other staff?) to benefit in the ways described in this article, with mentoring support included so that they can have a personal development plan that would show evidence of progress that potential employers could access.

Despite the benefits, including reducing Britain’s skills shortages, it is unlikely to happen any time soon. Tax-led incentives might work, however – if the Chancellor was to introduce them. He talks about the need to improve national productivity; performance appraisals would be a sure way to achieve that, and I’m not talking paper based appraisals but always on, cloud-based systems that offer the speed, cost benefits and flexibility that SMEs say they want.

Appraisals need not be rigidly carried out once a year. With online systems making them easy - and carrying out all the analysis in real time – they can be implemented as often as is considered desirable by management.

In everybody’s interest

With the number of zero-hours contract staff at a record high and national productivity embarrassingly low, it must be in everybody’s interest to look at how to support the contract staff – indeed, all staff - while raising individual firms’ productivity.

A further benefit is that those head of payroll who foresee issues around Universal Credit, or other issues, impacting on their department can be freed to pay more attention that if their employers use online tools to measure and manage staff performance and relate it to pay and bonuses.