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Guide on how to manage underperforming employees

Have you found yourself having to deal with an underperforming employee?

As business leaders, we always want to think the best of our staff and depending on our leadership style, it can be difficult to know the best way to deal with poor performance in the workplace.

What constitutes an employee as ‘underperforming’?

An employee who is underperforming is someone not meeting the expectations of their employer. It might be a sales executive failing to meet targets, or an employee who is constantly late or missing deadlines. The reality of whether staff are missing the mark is often subjective and set by the employer’s expectations.

Reasons for underperformance

The first step to dealing with underperforming staff is to identify the cause of their underperformance. Julie Nicholds, from Loch Associates Group names these nine reasons why employees underperform at work:

  • Motivation: Employees quite often feel demotivated if they’ve been around a long time, they don’t feel valued or they no longer enjoy their job role.
  • Concentration: Some people are easily distracted and find it harder to focus than others.
  • Interpersonal issues: is there any conflict within your workplace that is causing tension?
  • Capability: Have they got too much on their plate? It might be that they have been given new responsibilities but haven’t got the space or time to learn how to manage them.
  • Suitability: Sometimes, they are just not in the right role.
  • Health-related issues – Your employee might be struggling with their physical or mental health which is affecting their performance.
  • Personal problems – Often employees’ personal problems can affect their performance especially if they bring their personal problems to work with them.
  • Communication – Are they given enough information to make sure they are focusing on the priorities of the business?
  • Excessive Workload – Are they simply overwhelmed with how much is on their desk? Many employees are stretched in so many different directions that they can’t keep on top of it all. They end up doing lots of things badly, rather than a few things well.

So, how do you identify the cause of underperformance?

If you monitor employee performance long-term, you will know whether their performance has dropped or has been consistently low. If it has dropped and seems out of character, its likely to be due to their circumstances, whether at work or at home.

In any situation, to identify the cause of underperformance, the answer is to communicate!

  • Set up a meeting with them to address their performance.
  • Be honest, open and approachable
  • Let them lead the conversation by asking open-questions – what do they feel they could improve on? What do they want to achieve in their role?
  • Praise them for what they have done well
  • Be specific in your expectations by working together to create performance goals

If you follow those steps, you’ll probably find you identify the reason why they are underperforming, and you can work together to address it.

How to avoid employee underperformance

It’s one thing dealing with underperformance when it happens, but wouldn’t it be better to put things in place to lessen its occurrence and impact? Of course, some circumstances are out of our control so let’s focus on what leaders can control.

  1. Question yourself first

Have you been clear enough in your expectations of that employee? Are you expecting too much of them? This is the first place to start before placing blame or harbouring feelings towards an employee before giving them the benefit of the doubt.

  1. Work to be an aligned organisation

Quite often, misgivings with staff underperformance can be because they don’t share the owner’s goals, vision and passion for the business. This lack of understanding can then be misunderstood as underperformance.

In her chapter in Timeless Principles of Exceptional Businesses, Blair Koch claims that ‘a lack of alignment between a business owner and his or her managers and employees can keep a company from its maximum potential. In extreme cases, it may destroy the business if the employees are consistently out of step with the vision and goals established by the owner.’

It is up to you, as the owner, to commit to the alignment process which could be as follows:

  • Create an environment built on communication
  • Establish a written company vision aligned with your personal vision and share this widely with your employees.
  • Engage with your management team to clarify key values and build a company culture based on their values.

Blair goes into even more detail on these steps and give additional, useful suggestions in her chapter. Download ‘Achieving Business Success through Organisational Alignment’ for free.

  1. Get staff in the right roles

Effective hiring is a key part of maximising your employee’s potential, and as a result, avoiding underperformance.

Consider these questions when hiring: Does this person fit with my company’s values? Is this the right role for their experience and capabilities?

Or if you have an employee underperforming: Have they outgrown their role? Is it time for a promotion or a change to their role that’s better suited to their skills? Are they overwhelmed with their responsibilities?

Read our chapter on Getting the Right People in the Right Seats for more tips on this area.

  1. Be available

Another way to avoid employee underperformance is for you to be available. Whatever issue an employee has, if you set yourself up with an open-door policy, they are more likely to come to you or their direct line before the issue grows into underperformance.

Start by scheduling monthly one-to-ones with everyone on your team. Depending on the size of your business, you should also encourage your management team to do that with their teams too.

  1. Know when it’s time (after you’ve done everything you can)

If you have done everything you can to help an employee improve, it’s important you take action when it’s time. Keeping staff who are negatively impacting your business is not going to do anyone any favours. In the end, there is only one solution and don’t be afraid to make that decision.

People management is a tricky thing. It's not just underperforming employees, but business leaders need guidance in dealing with difficult employees or recruitment or managing a team with remote and office workers.

At TAB, there are ways we help people management become easier through our business support services. If you want to find out more, not hesitate to get in touch about TAB membership.


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