Employment Hero

How to manage an underperforming employee

Struggling with employee management? It happens, especially with underperforming employees. Despite the best efforts, an employee is underperforming and something has to be done.

Managing an underperforming employee is difficult for everyone – the manager, the team and most of all, the employee. However, for the sake of the business, it’s absolutely critical that underperformance is addressed as quickly as possible so it doesn’t affect business performance and culture inside the team.

The starting point for any underperformance discussion is your workplace procedures and policies. Employment Hero provides template procedures to use but your business may have its own available to you. 

In general, managers should start with the following steps:

Step 1: Start with what YOU can do under employee management.

In an ideal world, all employees should understand their role, the level they are expected to perform at and be given constant and direct feedback to make sure they were constantly achieving that level.

But reality is often very different, particularly in small or growing businesses. The first step is to question whether or not you’ve supported the employee in the right way. If you feel that there’s any room for misunderstanding there, it might be better to re-establish the basics rather than moving to a more formal process.

Step 2: Analyse what’s going on.

There are many reasons why employees underperform, including issues outside work, poor cultural fit with the business or personality clashes. Start with how serious the problem is, how long has it been going on for and what is the gap between current and expected performance.

If it is a serious, on-going problem then it’s probably time to get ready to move forward with some more significant steps in the background. If it’s a short-term dip in performance, it might be able to be solved with a less formal approach.

Step 3: Meet with the employee to talk about what’s happening.

It’s time to meet with the employee to talk about what’s going on. If you’re a new manager, it might be helpful to role play with someone on the HR team (or if you don’t have HR team, a mentor or a trusted business confidante). Good employee management is crucial when trying to deal with underperforming employees. 

Make sure you set the meeting for a private meeting, away from the rest of the office. Come to the meeting prepared with what the issues are and be as specific as possible. Have notes, any documentation, figures (if the issue relates to targets) or policy details (if they are not complying with a company policy) with you and available for the employee to look at. You want to remove as much emotion from the situation as you possibly can so talk about the underperformance issues rather than the person.

Throughout the meeting take notes and listen. Make sure you clarify details. Repeating back what you’ve understood or summarising can be useful techniques to make sure that everything is as clear as possible. Remain calm and be as supportive and encouraging as you can.

Step 4: Find the solution.

Once you’ve understood what’s happening, you and your employee should set about finding a solution together. When someone has helped create the solution, they are more invested in the outcome and more likely to succeed.

Ask the employee how they would like to improve and any new skills they want to learn to help them do their jobs better. Be sure to set SMART (Specific, Measurable, Achievable, Relevant, Time-framed) goals to help improve performance in the short term. Make sure you’ve addressed any possible risks to the plan like how we can stop another slip in performance again and what you, as a manager, can do to help.

Make sure you set out the plan in writing so there is no confusion as to what the employee needs to achieve.

Step 5: Keep checking in.

It’s always good to schedule a follow-up meeting shortly after this one to check in. As it is with most aspects of employee management. If you’ve noticed an improvement make sure that you acknowledge and reward the employee to encourage them to keep moving forward. You’ll probably want to keep checking in regularly for the next few weeks.

If poor performance continues, then you need to be prepared to act and act quickly. In your next meeting make sure your employee knows that you’re serious and if you don’t see improvement quickly, you’ll need to take more formal steps such as issuing the employee with a formal written warning, which sets out the consequences of failing to improve. You’ll also need to prepare yourself to potentially let this person go if there isn’t an improvement.

To reduce the risks of a poorly performing employee being able to successfully bring legal claims against the business it is generally advisable that employees are issued with a number of written warnings before their employment is terminated. Employees should also generally be invited to a formal disciplinary meeting (accompanied by a support person if they wish) before a final decision to dismiss them is taken.

To read more about how Employment Hero can help you with your policies and procedures, CLICK HERE to set up a free account today.

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