Can Employers Change KPIs After Years of Service?
Updated: 1 day ago
Can employers change KPIs after you have worked for them for years? Sometimes they can. But there are limits. This guide explains your rights when new Key Performance Indicators (KPIs) appear. It shows how to challenge unfair targets. It also covers what to do if missing them puts your job at risk, including KPI constructive dismissal.
Work moves fast, and performance measures change with it. When an employer brings in new KPIs after years of service, it raises real questions. What does your contract allow? What must your employer do first? And what can you do if you think the targets are unfair? This guide is general information and not advice on your own case.
Do you feel your employers KPIs are fair?
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Can employers change KPIs? The short answer
In most cases, an employer can set and update performance targets as part of managing the business. The law, however, expects the process to be fair. If a change is major, unreasonable or goes against your contract, you may have a claim.
So the real question is not just whether an employer can change KPIs. It is how they do it. The key points are your contract, the reason for the change, how it is communicated and whether the new targets are achievable.
What are KPIs at work?
KPIs are measures used to judge employee performance. They might cover sales figures, customer satisfaction, quality, deadlines or employee engagement. A manager may set employee KPIs for each team member. They are often reviewed in performance reviews.
Used well, KPIs help businesses link daily work to wider business goals and business objectives. They help managers identify areas where an employee needs more support or training. They can also feed into decision making about pay, bonuses and promotion. That is why a change to your KPIs can matter so much.
A KPI is not always a legal term in your contract. Sometimes it is just a management tool. In other cases, targets are written into the contract or into a bonus scheme. The wording makes a big difference to your rights.
Legal framework for KPI changes
Changes to KPIs may vary your contract
If a KPI is part of your contract, a change to it may be a change to your contract terms. An employer usually cannot change a contract term without your agreement. Some contracts contain a flexibility clause that lets the employer make reasonable changes. Even then, the clause must be used fairly and reasonably.
Under section 4 of the Employment Rights Act 1996, an employer must tell you in writing about changes to your main terms. Acas explains the rules on changing an employment contract. Our article on employment contract changes has more detail.
The duty of trust and confidence
Every UK employment contract includes an implied duty of trust and confidence. An employer must not act in a way that destroys the trust between the two sides without good reason. Impossible targets, set to push someone out, can break this duty.
When can KPIs be changed?
An employer is more likely to be able to defend a change if there is a genuine business reason. Common reasons include:
Business needs: changes in market conditions, costs or the way work is done.
Industry and regulatory change: new rules or benchmarks that affect how work is measured.
Performance improvement: a wider programme to raise productivity, if targets stay fair and achievable.
Restructuring: a merger, reorganisation or new team structure.
New technology: systems that change how work is done and measured.
Your rights when new KPIs are introduced
Consultation: you should be told about significant changes and have a chance to comment. Your employer should listen and explain the reasons.
Fair treatment: targets should be applied fairly to similar roles. They must not discriminate on protected grounds such as sex, race, disability or age.
Time to adjust: you should get a reasonable period, and the training and resources you need, to meet new targets.
A way to challenge: you can challenge targets that are unrealistic. Use the grievance procedure first.
Fair measurement: performance must be judged on clear criteria and reviewed regularly.
If the targets are linked to a protected characteristic, see our guide to workplace discrimination. If the changes also affect your role or status, read about demotions and employee rights.
What you can do if employers change KPIs unfairly
Raise a formal grievance
A grievance is a formal way to raise a concern. It makes sure your employer must deal with it. The Acas Code of Practice sets out how it should be handled. See our guide to grievance meetings and hearings.
Talk to your manager
An open talk with your line manager can often fix the issue. You might agree changed targets, a phased start or extra training.
Ask for transitional arrangements
You can ask for temporary help to adapt. Examples are a trial period or targets that rise in steps.
Take legal advice early
Early advice helps you understand your rights before a problem grows. An employment solicitor in London can review your contract and the facts.
Performance improvement plans
If you fall short, your employer may use a performance improvement plan. Our guide to performance improvement procedures explains what to expect.
Protecting yourself against dismissal linked to KPIs
Keep a record of every message: keep emails, notes of meetings and decisions about the new targets.
Keep your own performance records: results, praise and feedback show how you are doing.
Ask for reasons in writing: a written explanation gives clarity and protection.
Get union help: if you are a union member, ask your representative to support you.
Take advice early: acting quickly protects your position.
Read more in our article on whether KPIs can be used against you.
Understanding KPI constructive dismissal
Constructive dismissal happens when you resign because your employer has seriously breached your contract. The leading case is Western Excavating v Sharp [1978]. It says the breach must be fundamental. You must also resign in response to it, and not wait too long.
Unreasonable KPI changes can sometimes amount to such a breach. An example is a major cut to your pay or bonus through impossible targets. A small or fair change is unlikely to do so. These claims are hard to win, so you need good evidence of the changes and their effect on you.
Time limits are short. Claims usually must be brought within three months, less one day, of the end of your employment. Early conciliation through Acas comes first. For more, see our guides to constructive dismissal claims and the breach of contract test.
Dismissal for missing KPIs
If your employer dismisses you for missing targets, they will often say the reason is capability. A fair dismissal needs a fair process and a real chance to improve. Whether you can bring an unfair dismissal claim depends on your length of service and other factors. Check the current rules on GOV.UK. Our guide on employment tribunal claim steps explains the process.
Possible remedies
Remedies depend on the claim. They can include compensation and, in some cases, reinstatement or re-engagement.
Examples: can employers change KPIs fairly?
Examples help show where the line sits. These are illustrations, not legal rulings.
Changes that are more likely to be fair
A sales team gets a higher target after the company hires more staff and the market grows.
A support team is asked to track customer satisfaction scores as well as call times.
Targets are updated each year after a discussion with team members and with a reasonable lead time.
Changes that are more likely to be unfair
A target is set so high that nobody could reach it, shortly after you raise a complaint.
One employee is given tougher targets than colleagues in the same role, for no good reason.
Targets change in the middle of a period, with no notice, and are then used to cut your bonus.
The new measures are linked to a protected characteristic, such as a disability or pregnancy.
Your target is raised far above what anyone in the team achieved last year, with no extra support.
Context matters. A change that looks harsh may be fair in one business and unfair in another. Always look at the reasons and the process.
How to respond if your employer changes your KPIs
Take a calm, step-by-step approach. It protects you and often leads to a better result.
Keep in mind that your employer may have reasons you have not yet been told. Asking questions first often clears things up and keeps the relationship on good terms.
Read your contract: check whether KPIs, bonuses or targets are mentioned and whether there is a flexibility clause.
Ask for the change in writing: you should have the new targets, the reasons and the start date in writing.
Check the targets: are they realistic, measurable and fair compared with those of your colleagues?
Raise concerns early: speak to your line manager and follow up by email. Ask for time or support to meet the targets.
Track progress: keep a record of your work against the new measures, so you can show what you have achieved.
Use the grievance process: if the issue is not solved, raise a formal grievance.
Get advice: speak to an employment solicitor before you resign or sign anything.
Do not resign in a rush. If you leave without a strong claim, you may lose your pay and your rights. A solicitor can help you weigh your options.
Can employers change KPIs for team members unfairly?
Employers often set KPIs for a whole team and then for each team member. Fairness matters in both. Targets should reflect part-time hours, leave, training time and any reasonable adjustments for a disability. If a manager ignores these points, the targets may be unfair or even discriminatory.
Employees can also help themselves by asking how success will be measured and how often the targets will be reviewed. Clear answers early on can prevent a dispute later.
Settlement options
Sometimes the relationship breaks down. An employer may offer a settlement agreement, or you may suggest one. A settlement agreement is a legal document in which you agree to leave in return for a payment and other terms. You usually need independent legal advice for it to be valid. Our guide on whether you need a solicitor for a settlement agreement explains why.
How we can help
While employers may make reasonable changes to KPIs, the changes must be fair, justified and properly communicated. Understanding your rights is key when facing a significant change. If KPI changes are affecting your job, seek legal advice.
CANKO Law Firm specialises in employment law and has experience handling cases involving unfair performance measures and constructive dismissal. Our solicitors can guide you on your rights and help you handle difficult workplace situations. Contact us today for a confidential consultation.
Frequently asked questions
Can my employer change my KPIs without asking me?
Often an employer can set and update targets as part of management. If the KPIs are written into your contract, they usually need your agreement or a clause that allows the change.
Can I refuse new KPIs?
Refusing can be risky. It is usually better to raise your concerns in writing, ask for reasons and use the grievance process. Take advice first.
Can I be dismissed for missing new KPIs?
An employer may dismiss for poor performance if the process is fair and the targets are reasonable. Unrealistic targets can make a dismissal unfair.
What if the KPIs change my pay or bonus?
A change that reduces pay or bonus is more serious. It may breach your contract. Take legal advice quickly.
