Managing Underperforming Employees: A Guide for Employers

An underperforming employee can have a major impact on a business. If one of your workers isn’t doing their best at work, it can affect both your business’s revenue and reputation.

As an employer, it’s your responsibility to act on poor performance as soon as you become aware of it. By acting swiftly, you can avoid the negative consequences of poor performance in the workplace. Here’s everything you need to know about managing underperforming employees:

What is an underperforming employee?

An underperforming employee is typically a member of your team that consistently produces substandard work. When an employee is underperforming, they’re usually not meeting the demands of their position.

It’s important that you deal with an underperforming employee as soon as possible. Besides not pulling their weight at work, their behaviour can be damaging to team morale and collaboration. Left unaddressed, poor performance in the workplace can further erode your business’s reputation and affect its bottom line.

Signs of an underperforming employee

Here are some common signs of an underperforming employee:

• Missing deadlines.
• Consistently arriving late to work.
• Submitting substandard, poor-quality work.
• Constantly making mistakes or excuses for poor work.
• Overwhelmed by the demands of their job.
• Failing to comply with company policies or procedures.
• Unable to carry out their duties according to instructions.
• Disruptive behaviour and conduct.
• Other employees have told you about their poor performance.

Causes of poor employee performance

There are many factors that can contribute to poor employee performance. They may include:

Stressful work environment

An extremely stressful work environment and lack of support may cause an employee to underperform.

Lack of skills or training

An employee who is placed into a work environment without adequate training or knowledge may be unable to meet the demands of their job or deal with their assigned tasks.

Poor onboarding

Employees who didn’t undergo a proper onboarding process may not have a clear understanding of how to carry out their responsibilities or handle everyday work situations.

Unsuited to the position

Sometimes an employee simply isn’t a good fit for their role. In this case, you can consider upskilling them or giving them a different set of responsibilities. However, if an underperforming employee is truly unsuited to the position, you should carefully consider if termination is the best course of action.

Personal matters

Often, deeply personal matters may affect an employee’s performance and productivity at work. Depending on the situation, you can offer them Employee Assistance Programs (EAP) or reasonable accommodation.

How to deal with an underperforming employee

Have a policy in place

To ensure that performance issues are dealt with as professionally as possible, you should create workplace policies on dealing with underperforming employees. Make sure these policies are included in the employee handbook and readily available in the company’s share folder/cloud storage.

Also, it’s important to review existing policies, update them regularly, and communicate the changes when necessary.

Take a proactive approach

You or your managers should regularly monitor staff performance and be aware of identifiers of underperforming employees. By recognizing the signs of an underperforming employee early, you can take the appropriate actions to prevent problems from growing.

Implement solutions

When dealing with an underperforming employee, you should first determine the root cause of the problem and then formulate an action plan to address it. The underperformance may be caused by a multitude of factors, including those that fall under the protected characteristics defined by human rights laws, such as substance dependency.

You can also implement a Performance Improvement Plan (PIP) to help the employee improve in their position and set clear goals and expectations for them to achieve.

Performance Improvement Plan (PIP)

When you have an underperforming employee, a PIP can be a valuable tool to help them get back on track. The aim should always be to support the underperforming employee in reaching their full potential and contributing positively to the organization. To do so, you should set clear expectations, action plans, goals, and timelines for the underperforming employee to follow through on.

Here is a guide on how to implement a PIP:

Step 1: Identifying the problem

Start by reviewing the employee's performance history. Identify specific areas where they are falling short and have a clear understanding of the problem.

Step 2: Setting clear objectives

Set specific, achievable, relevant objectives for the employee, including a timeline for achieving them. These should align with your organization's goals and expectations.

Step 3: Create the PIP

Your PIP should include the following:

• Employee information: Name of the underperforming employee, including job title and department.
• Problem statement: Clearly explain the employee’s performance issues.
• Expected improvement: Describe what success looks like and the performance standards.
• Action plan: Outline the steps the employee needs to take to meet the expected improvement.
• Resources and support: Mention any resources, training, or support that the organization will provide.
• Timeline: Specify a reasonable timeframe for improvement (typically 30, 60, or 90 days).

Approaching the employee about a PIP

Addressing an underperforming employee about the need for a PIP can be a sensitive but essential conversation. Here's how employers can approach this discussion effectively:

Prepare for the meeting

Before the meeting, gather all the necessary documentation that supports the need for a PIP. Ensure that you have specific examples of the employee's performance issues and be ready to discuss these.

Choose the right time and place for the meeting

Select a private, quiet, and comfortable setting for the meeting to ensure confidentiality and minimize distractions.

Address the issue tactfully

Start the conversation on a positive note. Express your belief in the employee's potential and value to the organization. Then, shift the focus of the meeting toward the employee’s performance issues and the need for improvement. Clearly communicate what you’re expecting from the employee in their position and introduce the PIP.

Introduce the PIP

Explain that you want to help the employee succeed and outline the PIP. Highlight that the plan is a constructive tool to help improve their performance. Let them know about the goals, expected outcomes, timeline, and any support or resources available to them during this period. You should also clarify what success looks like by using concrete examples.

Let the employee ask questions

Encourage the employee to ask questions or seek clarification. Ensure they understand the plan and their role in it. Reassure them that you’re there to support them throughout the process and that the PIP is a collaborative effort to help them succeed.

Follow through with the PIP

During the PIP implementation period, employers should check in with the employee regularly to ensure they’re following through with the plan.

Here is a checklist to help you ensure the PIP is on track:

• Regular check-ins: Schedule regular check-in meetings to monitor progress, offer guidance, and answer questions.
• Feedback: Provide constructive feedback on the employee's performance during the PIP period.
• Document everything: Keep detailed records of all interactions, including meetings, feedback, and improvements. This documentation is essential if further action is needed.
• Evaluation: Evaluate the employee’s progress regularly and objectively. At the end of the PIP period, assess whether the employee has met the required performance standards.

Completion of the PIP

There are three possible scenarios you can expect from the conclusion of a PIP:

Success

If the employee meets the standards and expectation set by the PIP, then you should acknowledge their progress and transition them back to regular performance reviews.

Partial Success

If there is improvement but not yet meeting expectations, you can extend the PIP with adjusted goals or take other appropriate actions.

No Improvement

If there's no significant improvement, you may need to consider further actions, such as additional training, reassignment, or, as a last resort, termination.

Terminating an underperforming employee

Every employer should be cautious about terminating an employee for underperformance. Firing an underperforming employee without following the correct procedure may lead to legal repercussions. This could be lawsuits for wrongful termination and, in some cases, discrimination or constructive dismissal claims.

Before terminating an underperforming employee, you should have proof and documentation to support their performance issues. This includes their failure to meet the expectations set by the PIP and other corrective measures.

Do you need help dealing an underperforming employee?

Let our HR experts help you develop a Performance Improvement Plan that complies with employment laws. We support employers by creating effective HR policies, employment contracts and documentation, and improving existing workplace procedures. Contact us today at 1 (833) 247-3652 to find out more about our services.