Strathclyde University researchers examined the use of performance management – such as setting targets – after unions raised concerns that far from encouraging staff, it is in the worst cases being used to "manage" workers out of the door, by assessing them as underperforming and sacking them. Unions and researchers both claim workers have suffered extreme stress, depression and in a few cases threatened suicide.
The report, which examined industries including the financial services sector, has uncovered shocking examples of pressures being heaped upon workers who fail to live up to sometimes unrealistic targets set by their companies.
In one organisation, it was reported that employees who had been identified as underachieving had cabbages and cauliflowers placed on their desk.
The study also contained a disturbing testimony from a former human resources director at a telecommunications company, who described the "sinister practice" of the car-park conversation – where managers would be given training on taking employees deemed to be underperforming outside for a chat in a bid to get them to voluntarily leave at as little cost to the company as possible.
The account from the former HR manager described how they were asked to find grounds to get rid of people without having to pay for it. Nine people were subsequently "managed out of the organisation on performance grounds".
"There were two cases, one of a person who was diagnosed with psychological depression, the other who had a brain tumour, who were put back on performance improvement when they returned from illness," the former manager said.
Other staff said managers used derogatory terms such as "bottom-feeders" and "muppets" for those considered to be on the lowest ranking for their performance.
The impact of such processes on the mental health of employees is one of the major concerns highlighted in the report Performance Management And The New Workplace Tyranny, to be launched on Tuesday by the Scottish Trade Unions Congress (STUC). In one incident in a bank, a woman whose performance was under review locked herself in a room and threatened to commit suicide. The account of the incident notes the company was "clearly trying" to orchestrate her resignation.
Phil Taylor, professor of work and employment studies at the university in Glasgow, carried out the research. He said performance management had been focused more on appraisals of work in the 1990s, but had evolved into a "continuous, all-encompassing" process with "tight monitoring and strict target compliance". He said: "You can
have somebody who has been with an organisation 20 to 25 years, who has consistently been deemed an excellent performer.
"Let's say a relationship breaks up or they have to take care of a sick relative or they have a family bereavement, they can be knocked off their feet for a bit, and then they can be categorised as an underperformer.
"You are only as good as your last score, and you can have people who have been utterly loyal and committed to an organisation and excellent performers, then being thrust into the underperformance camp.
"That can exacerbate feelings of pressure and can lead to stress, which compounds the difficulties of actually doing the work and makes it difficult to get out of that category."
The report also notes that some performance management is based on the theory that there will always be a fixed percentage of workers who will be underperformers, irrespective of how they are actually doing.
It says that while the economic crisis has exacerbated some effects, many of the practices were already becoming embedded before the recession.
Taylor said: "Many who have been in the workplace for 10, 15, 20 years, talk with great pain about how the workplace they joined has been transformed beyond all recognition over those decades and the aspects of work that gave them a degree of happiness or satisfaction – such as talking to colleagues, satisfying customers or doing a good job – have been subordinated to the pressure of targets.
"That is a genuine degradation: people shouldn't have to work like this."
The study started from a resolution passed by the Communication Workers Union and the Unite union at the STUC congress in 2009, highlighting growing concerns about new forms of performance management.
Mary Alexander, deputy regional secretary of Unite in Scotland, said an example from the financial industry showed it could take as little as six weeks from being put on a performance improvement process to being fired.
But, she said, sales targets which were being set were often "not achievable and unrealistic".
Ben Willmott, head of public policy at the Chartered Institute of Personnel and Development, said there were risks for a company in using "very prescriptive" performance management, as employees would be reluctant to speak out if anything is going wrong.
He added: "In enlightened, progressive organisations performance management is very much about coaching people, making sure managers have regular informal one-to-ones with staff.
"It is about an ongoing conversation, ongoing coaching, ongoing development and high-quality feedback, both positive and negative."
A spokesman for the British Bankers Association said banks "will be looking at this report".
Last year a report published by NHS Scotland on suicides in Scotland between 2009 and 2010 found those who killed themselves were more likely to be in deprived areas. But out of those who took their own lives and were of employment age, just over two-thirds had jobs.
Dr Andrew Fraser, director of public health science at NHS Health Scotland said: "We know that a tough and unsupportive working environment, and specifically workplace bullying and harassment can have a negative impact on a person's mental health and that, as a result of sustained bullying, some people may experience stress and anxiety.
"If that experience is sustained and not addressed by management at all levels, workplace stress may lead to depression which is a major risk factor for suicide."
The so-called age of austerity has allowed some firms to use management techniques to make their staff's lives a misery. Exclusive by Judith Duffy
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