15 Actionable Tips for Managing Underperforming Employees
We all have our good and our bad days. But when a bad day turns into a bad week or a month even, we might need to take a moment and try to figure out what’s going on so that we can feel good again. The same goes for people’s performance at work.
Research from CultureAmp shows that, depending on the organization, underperforming employees typically make up between 0 and 20% of the workforce, with the average being 4%. By identifying and supporting these employees, organizations can not only improve individual performance but also enhance overall productivity, employee engagement, and workplace morale.
This article examines the phenomenon of underperforming employees, its causes and effects, and, most importantly, how to motivate underperforming employees. We’ve also developed a Performance Improvement Plan Guide to help you conduct fair employee evaluations.
Contents
What is underperformance?
What causes employees to underperform?
What is the impact of underperforming employees?
15 tips for managing underperforming employees
FAQ
What is underperformance?
Workplace underperformance occurs when an employee’s quality of work has decreased below the required level and expectations. The characteristics and severity of these situations vary, but the following behaviors often demonstrate underperformance:
- Failure to execute duties to meet the expected standards
- Disruptive, negative, or unacceptable behavior
- Deteriorated compliance with rules, procedures, or policies.
In practice, this often translates into underperforming employees missing deadlines, being late, showing a decreased interest in their roles and responsibilities, and delivering low-quality work.
What causes employees to underperform?
There are many reasons why employees underperform. Let’s have a look at some of them.
- Lack of skills: Employees sometimes find themselves in a role they aren’t adequately equipped for and don’t feel confident in. Also, they may have the technical abilities but don’t know how to manage their time well.
- Vague expectations: If job standards and organizational goals are unclear, employees won’t know exactly what is expected of them.
- Job dissatisfaction: The job might not be what they anticipated, so employees feel disappointed and lack the incentive to make an effort.
- Not a good culture fit: Sometimes, people won’t feel connected to certain company cultures or teams because they don’t match up well with their work style and values.
- Stressful work environment: A high-pressure atmosphere or personality clashes with coworkers can cause work-related stress that affects performance.
- Bad manager relationship: The employee-manager relationship can be suboptimal for many reasons. An employee may feel unheard, unseen, or passed for promotion, for example. All of these things can lead to underperformance.
- Inadequate training and development opportunities: Without being able to learn new skills, some employees stagnate and don’t improve their performance. They may also feel less motivated if they don’t see a path for development and career advancement.
- Lack of variety: Doing the same tasks every day can become mundane and cause employees to lose interest in their jobs and have no inspiration to do it well.
- Insufficient or bad onboarding: Recent employee onboarding statistics show that only 29% of employees feel fully prepared for their new role and ready to excel after their onboarding. That means that 71% of new hires feel unprepared and not ready to take on their new role, which can lead to underperformance.
- Personal issues: Challenging circumstances in people’s personal lives can impact their ability to concentrate on their tasks.
What is the impact of underperforming employees?
Naturally, employees who aren’t performing as well as they could affect the overall business. In this section, we take a look at what the impact of underperforming employees can translate into, including:
- Decreased productivity: Underperforming employees often contribute less to overall productivity, leading to a decrease in the team’s output and efficiency. Their inability to meet deadlines or achieve targets can delay projects and affect the organization’s overall timeline.
- Increased workload for others: As a consequence of their decreased productivity, the workload of the underperforming employee’s coworkers increases. This can be because they have to jump in while their underperforming colleague is late or absent, or because they have to improve their coworker’s low-quality work, etc.
- Lower team morale: Another consequence of having one or more underperforming employees in a team is that they will negatively impact the team morale. People don’t like to pick up other people’s slack all the time, especially when they know that the favor won’t be returned.
- Lower customer satisfaction: While it’s evident that an underperforming employee in a customer-facing role can directly reduce customer satisfaction, it’s important to note that poor performance in roles that indirectly support the customer experience can also have a negative impact. When tasks that contribute to the overall customer experience are not done well, it can frustrate customers and lower their satisfaction with the company’s products or services.
- Higher turnover: If we look at the causes of underperformance, it’s no surprise that employees who find themselves in this situation are more likely to leave the organization. Whether it be because they find a job elsewhere, are let go, or simply decide to leave themselves, underperforming employees will likely lead to a higher turnover.
Example: How companies deal with underperforming employees
Large companies such as General Electric, Microsoft, Amazon, and others used to practice stack ranking. The idea originated from GE CEO Jack Welsh in the 1980s.
Put simply, stack ranking is a method for rating employees against each other based on their performance. Underperforming employees are usually placed on a performance improvement plan or let go.
Understandably, this method received a lot of negative reactions, which is why many companies – including the ones mentioned above – are no longer using it.
Many companies today use alternatives to stack ranking employees such as:
- 360-degree feedback
- Objectives and Key Results (OKRs)
- Psychological appraisals
- Continuous feedback.
At Google, they used the stack ranking method in a more positive way; to identify employees who were ready for promotion.
15 tips for managing underperforming employees
Underperformance occurs among employees of all levels, and each situation has its unique aspects. The question, therefore, is how to manage underperforming employees.
The following 15 tips can help you address workplace underperformance:
1. Recognize that there is a problem
Be perceptive to circumstances and behaviors that may indicate performance issues. Frustration and apathy often coincide with underperformance and manifest themselves in certain behaviors. Some of the telling signs of underperformance include:
- Dissociation from tasks and responsibilities
- Reduced output and quality of work
- Recurrent tardiness or absenteeism
- Decreased interaction with colleagues.
Once you notice that an employee is underperforming, you need to act. Document specific examples of how their work has suffered and does not meet expectations, including any problematic behaviors you’ve observed.
Inform HR about your observations and your intended next steps so that the HR person in charge can contact the employee first to get an idea of where the underperformance stems from; if it’s caused by you, the manager, then you’re not the best person to conduct at least part of the steps that follow.
If you’re not the (main) cause of the employee’s underperformance, you can schedule a private, one-on-one meeting with the employee to address the situation and gain their perspective.
2. Conduct a meeting and ask questions to establish what causes the employee to underperform
The meeting should occur in a place free from interruptions and distractions where you won’t be overheard. Don’t make any assumptions as to the causes of the employee’s lack of effort. Start the meeting by describing specific examples of the employee’s underperformance and how it affects the rest of the team and the company.
Move on to uncover what contributes to the employee’s underperformance and how you, as a manager or the company, may be contributing to the situation.
Some sample questions that can provide insight into the employee’s perception of the situation can include:
- What part of your job do you enjoy and feel the most motivated by?
- What frustrates you about your job? Are there any areas that you feel ill-equipped for?
- Do you feel you’re playing to your strengths in your role? Where do you feel like there is a steep learning curve for you?
- How well are you handling your current workload?
- Do you see any areas where your performance could improve?
- Do you see how your work benefits others in the organization?
- Are there any external factors that could be affecting your work?
- Do you feel optimistic about your future with the company?
- Is there anything else you want to share with me?
The following example questions will help you get input from the employee about how the work environment may be impacting their performance:
- Are the expectations for what needs to get done and the level of quality made clear enough to you?
- Do you ever feel like you’re being set up to fail with unrealistic expectations?
- Do you have access to the necessary tools and resources to effectively do your job?
- Do you have the time you need to accomplish your tasks?
- Do you understand how your work adds value to the company and who benefits from it?
- How does my communication and management style come across to you? Does it inspire you to do your best?
Listen attentively to the employee’s responses and ask follow-up questions to understand them better and demonstrate your interest in their side of the story.
3. Reiterate job expectations
Depending on the outcome of the previous step, it may be valuable to reiterate the job expectations. Make sure that the employees understand what is expected of them and which areas require improvement.
Document the targets and how the employee has missed them so there is no room for misunderstandings. In general, stipulating exactly what must be accomplished within the job will help the employee focus on what they should be striving for.
Often, new hires are uninformed about specific expectations. This can occur if the position’s responsibilities aren’t clarified during the hiring and onboarding process. If this turns out to be the case, you may want to review one or both processes and improve them.
Furthermore, business changes that call for added expectations can confuse new employees unfamiliar with the organization’s flow.
Learn how to effectively manage underperforming employees
Effectively addressing underperformance can be challenging, but it’s a crucial aspect of driving team success. Our self-paced High-Impact Performance Management Course gives you practical tools and strategies to identify underperformance, have constructive conversations, and create improvement plans that work.
Gain the skills you need to turn underperformance into opportunities for growth and improve your team’s overall performance.
4. Manage employee expectations
If an employee’s hopes for their job have not been realized, they may not perform at a high level. They could have particular demands for compensation, career advancement, employer ethics and values, job security, etc., but are not seeing them play out.
Find out what an underperforming employee has been hoping for from their job and the organization to see if it is realistic. If there is a mismatch between what they anticipate and what you can offer or do for them, this is an excellent time to discuss whether they can adjust their expectations or not.
Here, too, you may want to inquire where these unrealistic expectations come from. If they were created during the hiring process, for example, this should be corrected to avoid disappointing new hires in the future.
5. Develop an action plan together
Once the underperformance issues and causes have been discussed, you can strategize an action plan together with the employee and seek a resolution. You can make suggestions for fixing the problem and encourage the employee to set goals and make their own recommendations.
Look for opportunities for job redesign or reskilling based on the cause of underperformance. If the issues are of a personal nature, you can propose taking time off to deal with them.
The plan should incorporate several angles:
- An outline of actions that each party is responsible for
- A timeframe for achieving performance improvement, including potential consequences for serious issues
- The support and resources that are going to be provided (training, mentoring, duties, adjustments, time off, etc.)
6. Ensure regular check-ins and follow-ups
Resolving an underperformance situation will likely require more than one conversation, and you should give the employee a reasonable amount of time to improve.
Schedule weekly meetings to monitor the employee’s progress on the action plan and encourage further growth. Give the employee plenty of opportunities to explain how their work ethic is developing and what is still challenging for them.
These check-ins hold the employee accountable and provide you with the chance to emphasize performance goals and follow through with any necessary training and support. It also shows the employees that you genuinely want to help them improve.
Once the employee’s performance reaches an acceptable level, commend their success and discuss how they can maintain this standard of work.
7. Recognize progress
As the employee starts to make headway, be vocal about the change you have noticed. Praise them for their effort and refer specifically to what they have accomplished and the positive impact it has.
Recognition goes a long way toward giving employees confidence in their abilities and inspiring them to work harder on the pattern of progress. Likewise, they will feel appreciated for their strengths and trust that you want to see them succeed and believe they can.
HR tip
Ensure all (new) managers in the company receive training on how to manage underperforming employees including regular refresher training.
8. Practice performance coaching
Learning on the job through day-to-day interactions is an excellent way to improve performance. Consider bringing learning into the flow of everyday work through learning methods like microlearning, micro-mentoring, and performance coaching.
Managers who understand performance coaching can create relevant learning opportunities out of causal dialog during work situations. This practical guidance can point employees toward new ways to do their jobs better.
9. Provide feedback
Providing specific and constructive feedback to an employee who is striving to improve their performance is essential. It will help them see their progress and be aware of areas that still need development. Ideally, this should include 360-degree feedback that you’ve gathered from people who interact with the employee. These opinions will provide insight into how the employee’s performance impacts others.
Consider these principles when offering feedback:
- Focus on one or two issues per session to avoid overwhelming the employee
- Keep the critique (if any) straightforward but positive
- Point out how the changes made are making a difference in the team’s productivity
- Commend the employee for their achievements to increase their confidence.
10. Keep thorough documentation
As with any employee issue, it’s important to document the steps taken to deal with an underperforming employee. A chronicle of the situation is a helpful resource along the way, especially if the dilemma doesn’t get resolved and the employee disputes the process.
Keep the initial records from the onset of the issue and then take comprehensive notes of what transpired during any subsequent meetings and conversations. Additionally, revise the formal action plan if updates are needed.
After each conversation, email the employee a summary of what transpired and any planned action steps. Remember to save any email responses or proposals from the employee. You should also track the employee’s progress in writing.
11. If performance doesn’t improve, make a decision
One employee who slacks off directly impacts team morale and the overall work environment. If you allow the underperformance to continue without repercussions, the other hardworking team members can become resentful and discouraged.
If the employee’s job performance doesn’t show signs of progress after investing a reasonable amount of time into the action plan, you need to contemplate other options. The two most common solutions are reassignment and termination.
- Reassignment: The employee could be better suited for another position within the organization with different responsibilities. An alternative role with demands that fall within their current scope of technical knowledge and interpersonal skills could be just what the employee needs to feel fulfilled and perform at their best.
- Termination. When all else fails, you may have to let the employee go as a last resort. Although this is not ideal, it may be the best viable solution for everyone involved. The termination process is never pleasant and can get complicated, so you need to follow all HR procedures and the company’s termination policy carefully.
12. Encourage a healthy work-life balance
Inspiring a healthy work-life balance is one effective method of supporting an underperforming employee’s progress and preventing underperformance from occurring in the first place.
Spending too much time on the job can cause fatigue, strain, and burnout. Typically, this results in decreased motivation and lower performance levels. Encouraging employees to take their allotted time off and offering wellness benefits can help them feel refreshed and more productive.
13. Discuss job crafting as a potential solution
Depending on the reason why employees are underperforming, job crafting can be a potential solution. Job crafting allows individual employees to make small changes to their jobs so that they ‘fit’ them better. As a result, employees feel better, perform better, and are more engaged.
Job crafting is employee-driven and can involve them making (minor) changes to:
- Their tasks and activities
- Their skills (i.e., developing new skills)
- Their purpose
- Their work relationships
- Their wellbeing.
Introducing an underperforming employee to the concept of job crafting and guiding them where necessary might be an excellent way to improve their performance.
14. Revisit role alignment
Sometimes, underperformance stems from a mismatch between the employee’s skills and the requirements of their role. If this is the case, you may want to reassess whether the employee’s strengths are being fully utilized in their current position.
If there happens to be a misalignment, you can consider reassigning tasks that better fit their skill set or exploring opportunities for upskilling to align with the job demands.
15. Suggest the company’s EAP
An employee assistance program (EAP) can provide support for a wide range of issues that employees may face, including stress, anxiety, depression, substance abuse, family problems, financial worries, and more. EAPs usually include assessment, short-term counseling, referrals, and follow-up services.
If the reasons why an employee is underperforming are related to any of the factors mentioned above, and if your organization has an EAP in place, you may want to refer them to that program and give them the time to deal with these issues first, either by giving them time off or reducing their working hours or tasks for the time being.
On a final note
How to handle underperforming employees depends on the unique circumstances of each situation. In some cases, the underperformance may be temporary due to an employee’s personal situation.
In other cases, the underperformance may last for a longer period of time and needs to be addressed adequately. No matter what the circumstances are, the fifteen steps in this article can offer a good approach to resolving the situation.
FAQ
When an employee is underperforming, the first step is to identify the root cause by providing feedback and discussing the issue directly with the employee. Support can be offered through additional training, resources, or mentoring, along with setting clear performance goals and a timeline for improvement. If performance does not improve, a performance improvement plan (PIP) with specific milestones may be implemented. Continuous lack of improvement could lead to reassignment or termination, ensuring all actions comply with company policies and labor laws.
Dealing with underperforming employees is not a one-size-fits-all approach. What to do depends on an employee’s specific situation and the reason why they are underperforming. If, for instance, they are having a difficult time at home, you may want to refer them to the company’s EAP and give them some time off to deal with that situation.
Depending on the employment contract and the country you operate in, you will usually be able to fire an employee for underperforming, but not after various steps have been taken first. These will vary from one country to another, but they often include offering the employee a different role in the organization or putting them on a performance improvement plan (PIP). The underperformance and its examples also need to be well-documented.
Learn more
Related articles
Are you ready for the future of HR?
Learn modern and relevant HR skills, online
