Managing poor performance: An employer’s guide

Managing poor performance in the workplace can be challenging for business owners, leaders and HR professionals. The consequences of leaving it unaddressed can be significant for employers and other employees. We’ve put together this helpful guide to address common challenges and help make sure you feel more at ease addressing performance.  

In our free resource, we’ll break down how to manage underperforming employees. You’ll find: 

• A step by step guide on how to manage poor performance.
• A managing poor performance checklist.
• Do’s and don’ts for managing poor performance.
• And more.

Download the guide now. 

What is poor performance at work?

Poor performance is when an employee isn’t meeting the standards of their role. It can look different depending on the position, but some common signs include: 

• Knowledge or skill gaps: An employee may not have the required technical expertise or may struggle to apply their training effectively.
• Low productivity: Consistently missing deadlines, producing incomplete work or failing to meet agreed targets.
• Poor reliability: Regular absenteeism, lateness or failing to follow through on commitments.
• Attitude and engagement issues: Lack of motivation, reluctance to collaborate, resistance to feedback or disengagement from team goals.
• Quality concerns: Deliverables that are rushed, inaccurate or require frequent corrections.

It’s important to recognise that underperformance is different from misconduct. While misconduct refers to behaviour that is deliberate or inappropriate, such as breaching company policies, theft or harassment, poor performance is usually about capability, consistency or effort.

When underperformance becomes a concern

It’s natural for performance to fluctuate, employees are human and may occasionally make mistakes, have an off week or need additional support in a new role. However, underperformance becomes a concern when:

• Issues are ongoing rather than isolated.
• Problems impact other team members or business outcomes.
• The employee fails to improve despite feedback and support.

Why addressing poor performance matters

Ignoring poor performance rarely makes it go away, in fact, it usually makes the problem worse. Taking a proactive and structured approach benefits not just the employee in question, but the wider team and the organisation as a whole.

Impact on teams, clients and business outcomes

When an underperforming employee isn’t managed effectively, the ripple effect can be significant. Colleagues may feel frustrated if they’re picking up extra work, which can lower team morale and increase burnout. Clients or customers may notice missed deadlines or declining quality, which damages trust and the company’s reputation. Over time, unresolved poor performance can drag down productivity and create resentment among high-performing staff.

Legal and ethical responsibilities for employers

Employers have both a legal and ethical duty to address underperformance fairly. 

• Legal standpoint: This means following proper procedures, giving employees the opportunity to improve and ensuring decisions aren’t discriminatory. 
• Ethical standpoint: This is about giving people the chance to succeed and making sure all employees are held to consistent standards. 

Managing performance in a transparent, respectful way helps protect your business from grievances or unfair dismissal claims.

Avoiding long-term productivity and culture issues

Unchecked poor performance can slowly erode workplace culture. If employees see that it’s tolerated, it can lower standards across the board and cause your best talent to disengage or leave. By dealing with underperformance promptly and constructively, you set clear expectations, reinforce a culture of accountability and support long-term growth.

Ultimately, addressing employee performance issues early is about more than fixing short-term problems, it’s about protecting your people, your clients and the future of your business.

How to manage poor performance: Step-by-step guide

Effectively managing poor performance requires structure, fairness and clear communication. Below is a six-step process that employers and managers can follow to address underperformance constructively while protecting both the employee and the business.

1. Identify and document the performance issue

The first step is to recognise the problem and back it up with objective evidence. Avoid vague impressions and instead focus on measurable data and observed behaviours.

• Data-driven observations: Compare performance against KPIs, targets or job descriptions.
• Feedback sources: Use peer or client feedback, project outcomes or missed deadlines.
• Objective language: Describe what you see, not how you feel. For example, say ‘Missed three deadlines in Q2’ instead of ‘Not committed to their work.’

2. Arrange a formal conversation

Once you’ve gathered evidence, invite the employee to a private, respectful meeting to discuss the concerns. Tips for conducting the meeting in a constructive way include: 

• Take a professional approach: Frame the meeting as an opportunity to help them improve, not a disciplinary action.
• Conduct it in a safe environment: Choose a neutral, private space. Allow time for an open discussion.
• Use constructive language: Use ‘I’ statements and examples, e.g., “I’ve noticed your last two reports missed the deadline. Can you help me understand what’s getting in the way?”

If you’re not sure how the meeting should be structured or what needs to be covered, here is an example of an agenda: 

1. State the purpose of the meeting.
2. Share specific examples of poor performance.
3. Ask for the employee’s perspective.
4. Discuss potential support options.
5. Agree on next steps.

3. Understand the root cause

Not all cases of poor performance are alike. Before deciding on next steps, it’s critical to understand why the underperformance is happening. Addressing the root cause ensures that your response is fair, targeted and more likely to succeed.

The best way to get to the root of the problem is through a constructive conversation. So instead of leading with closed-ended questions or assumptions, ask open-ended questions that invite the employee to share their perspective. Some examples of open-ended questions include: 

• “What challenges are you facing with your current workload?”
• “Are there any resources or training that would help you perform better?”
• “Is there anything outside of work that might be affecting your ability to focus?”

These questions encourage honesty and make employees feel heard, which can lead to more effective solutions.

4. Create a Performance Improvement Plan (PIP)

If informal conversations don’t resolve the issue, the next step is to set up a Performance Improvement Plan (PIP). A PIP provides structure by outlining exactly what needs to change, how success will be measured and what support will be provided along the way.

A well-designed PIP should include:

• Clear goals: Specific, measurable objectives that directly address the performance gaps. (e.g. Submit monthly reports on time with less than 5% error rate).
• Timeline: A fair review period, usually between 4–12 weeks depending on the role and issue.
• Support mechanisms: Training, mentoring or adjustments to workload that give the employee the tools to succeed.
• Checkpoints:  Regular review meetings (weekly or fortnightly) to track progress, provide feedback and make adjustments where needed.
  

The aim of a PIP isn’t to set the employee up for failure, it’s to give them a structured opportunity to improve. It also helps ensure the process is transparent and consistent, protecting the business from claims of unfair treatment. 

Download our Performance Improvement Plan template. 

5. Monitor progress and provide ongoing support

A PIP is only effective if it’s actively monitored. Once goals and timelines are in place, the manager’s role is to guide, support and track progress consistently.

Regular check-ins are essential for keeping momentum and providing feedback. Depending on the role and the severity of poor performance, meetings might be held weekly or fortnightly. Check-ins should:

• Review progress against agreed goals.
• Recognise improvements, however small.
• Address any setbacks or obstacles early.

It’s important to keep in mind that not all employees respond to a PIP in the same way. Managers should look at both outcomes and effort:

• If the employee is genuinely trying but struggling, consider additional training, clearer instructions or workload adjustments.
• If there’s little or no effort, it may indicate deeper disengagement and could accelerate the need for formal consequences.

6. Decide on next steps

At the conclusion of a PIP or review period, managers must make a clear and fair decision about the employee’s future. This stage requires balancing business needs with procedural fairness and employee wellbeing.

An employee can be considered to have improved successfully when they:

• Consistently meet the goals outlined in the PIP.
• Demonstrate sustained improvement, not just short-term fixes.
• Show willingness to apply feedback and maintain performance standards.

If these criteria are met, the employee should transition back to normal performance management, with recognition for their progress to help reinforce long-term success.

Unfortunately, not every case of poor performance results in improvement. Termination may become necessary if:

• The employee fails to meet the agreed targets within the PIP timeline.
• There is little or no effort made to engage with the support provided.
• Underperformance continues to negatively impact the business or team morale.

Common mistakes to avoid when managing poor performance

Even with the best intentions, managers can make missteps when dealing with poor performance. These mistakes not only undermine the process but also increase legal and cultural risks. Being aware of the pitfalls will help you handle underperformance more effectively and fairly.

Acting emotionally or inconsistently

Poor performance reviews can feel uncomfortable, but reacting emotionally, whether it’s frustration, avoidance or leniency, can damage trust and credibility. Consistency is key so make sure you apply the same standards across the team so employees know expectations are fair and objective.

Skipping documentation

Failing to record issues, meetings and agreed actions is one of the most common errors. Without documentation, it’s difficult to track progress, spot patterns or defend your decisions if challenged legally. Every step, from initial observations to PIP outcomes, should be written down clearly.

Ignoring employee wellbeing

Underperformance is often linked to external pressures such as stress, burnout or personal challenges. Focusing solely on output without considering wellbeing can worsen the problem. Always check whether health, workload or personal circumstances may be contributing and offer support where appropriate.

Not aligning with internal policies or legislation

Every organisation has its own HR policies and employers are also bound by workplace laws. Skipping steps or failing to follow due process creates risks of unfair dismissal claims or grievances. Before taking formal action, ensure your approach aligns with both internal policy and legal requirements.

Download the managing poor performance: An employer’s guide

Managing poor performance is one of the most challenging responsibilities for any business owner or HR manager, but avoiding difficult conversations or letting things slide isn’t an option for businesses. 

To learn more about how to effectively manage poor performance, download the guide.