How to deal with an underperforming employee

Published: September 5, 2024 | by Brightmine

An underperforming employee is an employee whose performance falls short of the employer’s expectations and the job’s requirements. Poor employee performance may result in decreased business results, quality assurance concerns, preventable workplace accidents and increased disengagement.

Effective performance management by supervisors and HR professionals is particularly crucial in a challenging business climate. If left unaddressed, poor performance can fuel distrust in the organization’s leadership, which may lead to avoidable attrition. It can also create a poor employee experience, negatively impacting high performing teams.

To maintain positive talent outcomes, leaders must determine how to address poor performance effectively. In this resource, we provide step-by-step guidance for managing an underperforming employee.

1. Identify poor employee performance

First, you must be able to identify poor employee performance and be prepared to address it immediately. Once you’ve identified a performance issue, communicate your concerns to them as soon as possible.

When communicating the performance issue, try to determine its cause. Reviewing the employee’s record may help guide the direction of your conversation. For example:

• Is this a former top performer who is now somewhat disengaged?
• Is there a particular issue that could be addressed (e.g., more frequent feedback) to improve performance?

Poor performance can manifest for a host of reasons. For example, during a recession or other times of change, the company may reassign duties or change business goals. Sometimes employees may fail to work toward and understand these changes in business priorities.

Employees may also have personal issues impacting their work performance. These employees may feel uncomfortable sharing their personal struggles, even when the impact on their work life is clear.

Getting to the bottom of why they’re underperforming will help guide your efforts to create an action plan. And, giving an underperforming employee sufficient attention and related support can turn a career around.

Additionally, it’s important to identify performance issues fairly. Remain conscious of any stereotyping or unintentional bias while you evaluate performance issues. Disparate treatment could undermine organizational goals of fairness and lead to a perception of widespread discrimination in the workplace.

2. Meet with the employee to discuss performance and employer expectations

Meeting with an underperforming employee to discuss performance issues is key to building mutual understanding. These meetings also help set expectations for both employees and their manager. To be effective, they should be continuous and start with setting or confirming individual performance goals.

Goal setting

Individual performance goals should align with the organization’s business goals. Making a clear connection between these goals communicates the importance of an employee’s individual contribution to a business. Additionally, an employee’s engagement tends to improve when they understand how they contribute directly to the business’s success.

Expectations

Once you’ve agreed on goals, it’s time to set expectations. You may consider setting expectations by making job descriptions available to employees for each position. If you do, ensure that the employee understands:

• Their major responsibilities.
• The measures of success.

Beyond communicating expectations, managers should devise ways to build on the employee’s strengths to enhance performance.

Continue communication

Continue to meet with the employee to discuss progress toward these goals. This should be through regular check-ins and in a formal annual review. Meeting with an employee is important whether they’ve been a top performer, an average performer or a poor performer.

When communicating about performance deficiencies, ensure that the communication is a conversation, not a dictation. This exchange can be an excellent opportunity to learn about any obstacles to improved performance.

For example, are there any issues with communication or process that should be addressed? Are there barriers that are keeping the employee from being the most productive? Working with specifics, not generalities, may more readily identify the root of any performance problem.

Communication and management styles vary. However, every manager should do the following in performance meetings:

• Be consistent.
• Begin with a positive statement.
• Ask for the employee’s thoughts on their performance.
• Include specific praise.
• Emphasize areas of improvement.
• Avoid “grade inflation” by speaking honestly regarding deficiencies.
• Plan for future short-term goals.
• Follow up to summarize the meeting and any new goals.

In addition, communicate rewards for improved performance, such as:

• Greater responsibility.
• Increased compensation.
• Opportunities for advancement.

3. Determine whether to offer the underperforming employee development tools

Deploying available tools for development can help boost performance. They’re particularly helpful for newer employees, whose short tenure may affect performance.

A newer team member may need familiarization with organizational goals and expectations. Or, they may lack skills needed for the job. Feedback at this time is essential for both the employee and the employer. And, depending on the situation, you may also want to offer the employee training, coaching or mentoring:

In the case of tenured employees, the focus should be on training, coaching and a pattern of consistent feedback.

4. Determine whether to offer an accommodation

During performance conversations, it may come to your attention that an employee may be in need of an accommodation. A reasonable accommodation may be necessary for an employee’s performance to meet their employer’s expectations.

Accommodations:

• Should be reasonable.
• Do not require a lowering of performance standards if they’re legitimate, job-related and consistently applied.
• Allow employees to achieve performance goals and workplace expectations.
• Promote diversity, equity and inclusion (DEI).

Examples of possible accommodations include:

• Providing a quiet, clean workspace for employees with attentive deficit disorder.
• Permitting remote work.
• Shift changes or flexible scheduling.
• Lateral transfers.

Consider offering accommodations even if the law does not specifically require one. Instead of considering legal requirements, consider your goals — like improving performance and retaining an employee. For example, you may offer light duty to an employee with a medical issue that doesn’t rise to the level of a disability.

5. Implement a measure or combination of measures to address poor performance

After considering your options to improve performance, you can implement one or more measures. For example, you could offer additional training as well as more frequent feedback sessions.

Any measures that you implement should focus on boosting quantifiable performance measures (key performance indicators (KPIs)). In addition, close monitoring of an employee’s performance and the measures’ effectiveness should continue.

If, after a certain amount of time, performance continues to be an issue, you may want to consider a performance improvement plan (PIP).

6. Determine whether to use a performance improvement plan (PIP)

A performance improvement plan (PIP) is an alternative to immediate disciplinary action. PIPs are helpful when a supervisor has noticed the employee is exhibiting prolonged underperformance. They set specific performance improvement goals for employees to achieve to avoid disciplinary action. The PIP is an ongoing process that requires monitoring and feedback.

Also, you may be carrying out a PIP for an employee who is part of a union. To ensure compliance, be sure to follow the requirements of any applicable collective bargaining agreements or private employment contracts.

When preparing a PIP, ensure that it clearly communicates the areas for growth. The best way to do this is to be specific about the employee’s performance issues. That is, list specific events or instances of performance deficiency and alternatives that would have met expectations.

The PIP should:

• Consist of both short-term and long-term goals.
• Set a deadline by which the employee must satisfy the requirements of the PIP.
• List consequences for not meeting the plan’s requirements. 

Additionally, ensure that employees understand that the purpose of the PIP is not to punish. Rather, it’s intended to help them be successful in their role.

7. Determine whether and how to discipline the underperforming employee

The decision of whether and how to discipline an employee for poor performance is extremely important. An organization must stress a culture that emphasizes accountability at the individual and team levels for performance.

On the other hand, discipline often leads to disengagement and other negative emotions. Though you can’t avoid all negative emotions, you can emphasize that discipline is not the end of the road. To do this, frame discipline as a learning experience and reiterate performance expectations. These expectations should be objective, and any resulting consequences should be fair and consistently applied.

Also, consider the following strategies to ensure discipline is reasonable, fair and productive:

8. Keep appropriate records

Record retention practices with respect to performance and discipline records should:

• Adhere to federal, state and local requirements.
• Establish records for consistency in action across supervisors (past, present and future).
• Inform employment decisions regarding development planning, promotions, demotions and terminations.

Also, make sure that you:

• Accurately document performance-related employment decisions.
• Explain decisions reflected in your records, to the extent feasible, to affected employees.
• Maintain records for at least the statutorily required periods.

9. Continue to focus on consistent performance management

Managing underperformance with communication, development, a PIP and/or discipline can pull the employee up to adequate performance. However, the performance management journey shouldn’t end there. Continue to monitor performance regularly, and adequately document these efforts.

Also, be sure to enforce performance standards consistently across the organization. Some supervisors may be more reluctant to address poor performance. These supervisors must understand how important it is to hold all teams and divisions to the same standards. Holding employees to different performance standards or applying inconsistent performance appraisal processes may lead to unlawful discrimination.

Conclusion

By maintaining a focus on improving performance, you can ensure business stability, retention and success. Most importantly, it’s the fair and right thing to do.

Looking for more performance management resources? Explore the Brightmine HR & Compliance Center, formerly XpertHR tools and resources. Click below to start your free trial.