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How to manage underperforming employees and retain talent

It’s important to deal with bad behavior in a good way to keep the workplace happy and useful. If you ignore or deal with these issues incorrectly, they could hurt the team by making them sad or losing key players. This article discusses realistic ways to deal with underperforming employees in a way that encourages growth and longevity, keeping the workforce strong and motivated.

Table of Contents

Understanding underperformance

When a worker consistently fails to meet the requirements and standards set for their job, this is called underperformance. It could manifest as bad work, missing deadlines, or not wanting to do group projects and tasks.

Several things can cause bad performance, and the first step in fixing the problem is to figure out what they are:

  • Lack of clarity in job roles: Workers might not do well if they don’t know what I expect. Unclear job names and goals can cause confusion and waste time.
  • Insufficient training: People might not do their best work if they lack the skills or information they need.
  • Personal issues: Employees’ mental health issues, health problems, or family obligations can also make it hard for them to do their job well.

Managers can change how they help employees advance and perform well at work by discovering why some employees aren’t doing their jobs well.

Early identification of underperformance

Early detection of underperformance is crucial in mitigating its impact and steering employees back on the path to success. Regular performance reviews and consistent feedback are pivotal in this early identification process.

Importance of regular performance reviews and feedback

  • Timely insights: Regular performance reviews help catch deviations from expected performance levels early before they become more serious issues.
  • Continuous communication: Ongoing feedback provides a steady stream of communication between managers and employees, fostering an environment where expectations are clear and support is readily available.

Techniques for proactive identification

  • Setting clear benchmarks: Managers should set clear goals for employee performance that are shared with and known by all employees. It’s easier to tell when someone’s speed is going down with these benchmarks.
  • Observing changes in work habits: If an employee’s work habits change, like becoming less productive, being late more often, or not being as interested in their work, it could mean they are not doing their job well.
  • Employee self-assessments: By encouraging workers to self-evaluate, you can help them see where they can improve and get them involved in the conversation about their performance.
  • 360-degree feedback: This method lets managers learn about an employee’s work from various sources, giving them a more complete picture of their job.

Using these methods, managers can find problems early and solve them effectively. This prevents problems from getting worse and helps workers get back on track with the organization’s goals.

Effective communication strategies

Addressing underperformance starts with effective communication. Managers’ initiating tone and tone can significantly impact the outcome. Here are key strategies to ensure these discussions are productive and empathetic.

Initiating conversations with empathy and clarity

  • Prepare and plan: Gather relevant performance data and examples before the conversation. This preparation helps in presenting clear and specific feedback rather than vague criticisms.
  • Choose the right setting: Conduct the meeting in a private, neutral space to ensure confidentiality and minimize stress.
  • Use empathetic language: To begin the conversation, speak in an understanding and kind manner. Before addressing areas of concern, acknowledge the employee’s efforts and talents. For example, “I really value your dedication, and I want to help you overcome the challenges you’ve been facing.”
  • Be specific and objective: Clearly explain how and where the employee’s performance is lacking. Use specific examples and relate them to the job expectations and goals.

Maintaining a positive and supportive tone

  • Focus on improvement: Frame the conversation around growth and improvement rather than criticism. Emphasize your commitment to helping the employee succeed.
  • Encourage open dialogue: Allow the employee to share their perspective. Listen actively to their concerns and suggestions. This can help uncover underlying issues and collaboratively develop solutions.
  • Offer constructive feedback: When you give feedback, make sure it is helpful. Never attack someone directly. Instead, talk about what they did and how you could change or improve it.
  • End on a positive note: Positive feedback at the end of the talk. Tell the worker that you believe in their ability to get better and that you are here to help them on their way.

Managers can talk to workers who aren’t doing their jobs well in a constructive and helpful way by using these communication methods. This builds trust and respect between both parties.

Developing a performance improvement plan (PIP)

There is a formal document called a Performance Improvement Plan (PIP) that helps an employee and their boss talk about how to make the employee better at their job. It’s a well-thought-out plan for how to do better. 

Steps to create a tailored performance improvement plan

  • Identify the specific issues: Clearly define the areas where performance is not meeting expectations. This should be based on the examples and data collected previously.
  • Set clear and achievable goals: Set clear, measurable goals for the employee to reach in order to show that they have improved. Make sure that these goals are doable within a certain amount of time.
  • Develop action steps: Tell the worker what they need to do to reach these goals. Describe any help or tools that will be given to them, such as training or a mentor.
  • Assign responsibilities: Make it clear to the employee what they are responsible for and what help they can expect from management to help them do better.

Inclusion of clear, achievable goals and regular checkpoints

  • Timeline for achievement: Set a clear timeline for achieving the goals laid out in the PIP. This helps keep the process time-bound and focused.
  • Regular checkpoints: Schedule regular meetings to discuss progress and adjust the plan as necessary. These checkpoints are crucial for providing ongoing feedback and making any necessary changes to the plan.
  • Documentation: Keep detailed records of all discussions and adjustments related to the PIP. This documentation can be useful for future reference and helps ensure transparency and accountability.

By following these steps, managers can create a structured and supportive framework to help underperforming employees improve their performance, aligning it more closely with organizational expectations.

Support systems and resources

Providing the right support systems and resources is essential for helping underperforming employees improve. These tools not only aid in their development but also demonstrate the organization’s commitment to their success.

Overview of resources and support systems available for underperforming employees

  • Training programs: Tailored training sessions can address specific skill gaps. These could be technical skills training, soft skills development, or industry-related knowledge enhancement.
  • Mentoring: Pairing employees with mentors within the organization can provide them with guidance, support, and insight into improving their performance. Mentors serve as a valuable source of advice and encouragement.
  • Coaching: Professional coaches can help employees understand their current performance issues and develop strategies to overcome them. Coaching is particularly effective for addressing behavioral issues and improving interpersonal skills.
  • Peer support: Encouraging collaboration and support from peers can help underperforming employees feel more connected and supported within their team.

Role of HR in facilitating these supports

  • Identifying needs: HR can work with managers to identify the specific needs of underperforming employees and the appropriate support systems to address these needs.
  • Coordinating resources: HR is typically responsible for coordinating the development programs and resources, such as scheduling training sessions, arranging for coaches, and setting up mentorship programs.
  • Monitoring progress: HR can also play a role in monitoring the employee’s progress through the improvement process, ensuring that the supports provided are effective and adjustments are made as needed.
  • Feedback mechanism: Implementing a structured feedback mechanism where employees can share their experiences and outcomes with the provided support. This feedback can help HR refine and improve the support systems.

By leveraging these support systems and ensuring that HR actively facilitates these resources, organizations can significantly enhance their ability to help underperforming employees improve and succeed.

Monitoring progress and re-evaluation

Effective monitoring and periodic re-evaluation are key to the success of any Performance Improvement Plan (PIP). They ensure the plan remains dynamic and responsive to the employee’s progress and challenges.

Methods to monitor the progress of the employee effectively

  • Regular feedback sessions: Scheduled feedback sessions, whether weekly or bi-weekly, allow for ongoing discussions on progress and challenges, keeping the lines of communication open.
  • Performance metrics: Use specific, quantifiable metrics to track progress. Depending on the role, these could include sales targets, project completion rates, quality metrics, or customer feedback scores.
  • Observation: Direct observation of the employee’s work can provide insights into how they apply new skills and behaviors.
  • Progress reports: Require the employee to submit regular progress reports, which can help the employee self-assess and managers track milestones reached.

Criteria and timelines for re-evaluating the improvement plan

  • Set specific milestones: Establish clear milestones within the PIP timeline. These are specific points at which the employee’s progress is formally reviewed and discussed.
  • Timeline for evaluation: Typically, a PIP spans 30, 60, or 90 days. The exact timeline should be tailored to the specific goals set for the employee and the nature of their role.
  • Success criteria: Define success for each goal within the PIP. This includes improvement in performance metrics, successful completion of training, or positive feedback from coworkers.
  • Adjustments to the plan: Based on the evaluations at each milestone, decide whether the plan needs adjustments. This could involve extending the PIP, increasing support, or if goals are met, concluding the plan successfully.

By implementing these monitoring and re-evaluation methods, managers can ensure that the support provided is effective and adaptable to the employees’ needs, ultimately guiding them toward improved performance.

Decision making: Next steps if no improvement is seen

When an underperforming employee doesn’t show the needed change even after a Performance change Plan (PIP) is put in place, managers have to make tough but necessary choices. Here’s how to go about this process in a way that is fair and unbiased while also taking law and moral issues into account.

Guidance on making fair and objective decisions

  • Review the PIP objectively: Before deciding, thoroughly review all aspects to ensure the employee was given a fair opportunity to succeed. This includes confirming that all agreed-upon support and resources were provided.
  • Consultation: Involve HR and possibly legal advisors in the decision-making process. This helps ensure that employment action is consistent with company policies and legal standards.
  • Document everything: Maintain comprehensive documentation of all stages of the PIP, including meetings, progress reports, and communications. This documentation is crucial for supporting decisions made.
  • Multiple evaluators: If you can, have more than one person review the employee’s work. This will help avoid bias and give you a complete picture of their performance.
  • Compliance with laws: Make sure that all actions, such as firing someone, discrimination, and making accommodations for people with disabilities, are in line with local and national job laws.
  • Fair treatment: Make decisions based on performance data and documented facts rather than subjective opinions. This is crucial to avoid any perception of bias or unfair treatment.
  • Transparent communication: Communicate the decision to the employee straightforwardly and respectfully. Explain the reasons behind the decision, and provide information on any available support, such as outplacement services.
  • Ethical responsibility: Consider the ethical implications of your decisions, including the impact on the employee’s career and personal life. Strive to make decisions that are not only legally compliant but also ethically sound.

Decisions regarding the future of underperforming employees who continue to underperform after a PIP should be made with great care, ensuring fairness, legality, and ethical responsibility. These steps help protect the organization legally and maintain its reputation as a fair employer.


A deliberate and organized strategy that includes early detection through frequent performance assessments, compassionate and transparent communication, and the creation of customized performance improvement plans is needed to handle underperformance effectively without losing talent. It is essential to provide staff with the right tools, such as training and mentorship, and to assess their development routinely.

When improvements are not observed, decisions must also be made fairly, backed up by thorough documentation and adhering to legal standards. By fostering a culture of ongoing development and support, organizations can guarantee a strong and vibrant workplace that enhances individual worker performance, overall productivity, and morale.