In addition to managing their business, employers also have to manage staff and their performance. Business owners and employers need to consistently address performance instead of relying on once a year reviews and discussions. Underperformance or poor performance can lead to low productivity, low morale, and conflict among workers. Poor performance is not just a reflection on the employee but it is also a reflection on management and leadership.
In this guide, we outline what constitutes poor performance, understanding potential reasons, and ways to manage poor performance.
Understanding poor performance
Poor performance is when an employee fails to meet the expectations of the job. They can be underperforming when they don't hit certain milestones or goals. Poor performance can also be related to employee behaviour and their general attitude at work.
Poor performance or underperformance often shows up as:
- Failure to do the duties of the role or meet the standard required
- Non-compliance with workplace policies, rules or procedures
- Unacceptable behaviour at work
- Disruptive or negative behaviour that affects co-workers
Underperformance doesn't just affect an individual employee, it has a ripple effect on co-workers, team morale, customers, and ultimately business productivity.
Reasons for poor performance
Nobody wants to perform poorly. There are usually reasons behind poor performance or underperformance. Some common reasons include:
- Burnout or lack of general well-being
- Workplace conflict
- Lack of motivation
- Skill gaps
- Personal problems
- Lack of clarity around job role and duties
- Lack of communication around targets and goals
- Cultural differences and misunderstandings
Understanding the root cause of poor performance can help you address it effectively.
Signs of poor performance
Business owners and employers have a lot to keep track of. It can be challenging for them to identify poor performance but some intentional observation can help identify patterns of poor performance.
It is crucial you know the difference between a mistake and consistent underperformance. Here are a few signs that can help you recognise poor performance:
- An employee failing to accomplish their KPIs/goals/milestones for a month or more at a time. Failing to hit KPIs consistently can be a red flag.
- An employee is having consistent conflict with co-workers and leadership.
- An employee is regularly submitting subpar work.
- An employee is becoming defensive and failing to implement changes.
Poor performance vs misconduct
Underperformance is not the same as misconduct. In cases of underperformance, employers should try to resolve problems in good faith. Good faith means giving an employee a real opportunity to improve their performance and helping them to do so. In cases of misconduct, employers should conduct a fair and full investigation and give the employee an opportunity to be heard.
Managing poor performance
Best practice for managing poor performance may look different for different employers. However, there is one common element that all businesses and employers should keep in mind. Having a clear policy around performance improvement and performance management can help reduce confusion, establish a fair process, and set clear expectations among employees.
Poor performance or underperformance is not likely to go away on its own and other employees may lose motivation if they have to constantly carry the burden of poorly performing colleagues.
Informal measures are offered first, if the problem is identified early. Managers and employees can resolve issues together without going through a formal process.
The manager will have an informal discussion about the performance concerns and include solutions such as:
- extra training
- buddying, mentoring or coaching
- changes to tasks
- more regular check-ins with managers and supervisors
- referral to Employee Assistance Programme (EAP)
Your performance management policy should include what the manager needs to consider when implementing informal measures. It should also include what happens if performance doesn't improve and when formal measures can be put in place.
The formal steps to manage poor performance are:
Identifying the problem- Poor performance is not the same as a mistake or an error. It needs to be a pattern of behaviour that has been observed by the employer. Before you can address underperformance, you need to write down the examples of the behaviour and the action causing the issue. Note the frequency of the occurence and details such as dates and times. Explain why it is an issue and specify the impact. Mention changes and improvements that can be done to fix the problem. Any documents or statistics such as business stats, KPIs, customer feedback should be included in this. Have copies of this entire record to give to the employee.
Assessing the problem- Once you have identified the problem, consider the severity, the duration of the poor performance, and the gap between expectations and delivery. By assessing the problem, you can prepare for potential solutions and pathways.
Getting HR support- Having an HR expert involved early in performance problems can ensure you avoid any misunderstandings and confusion. An HR partner can help you in understanding the policies, explain it the employee, and discuss next steps. HR can also help in determining the appropriate time to discuss and correct the issue. Should you consider a performance improvement plan (PIP) or a performance management plan (PMP)? Whatever the problem is, HR is an excellent support to have for business owners and employers.
Meeting with the employee- Organise a face-to-face meeting with your employee to discuss poor performance. Let the employee know about the reason for the meeting in advance so they can adequately prepare. If you will be referring to documents to back your concerns, provide copies to the employee before the meeting. Inform the employee they can bring a support person of their choice to the meeting. The support person is to be present at the meeting but not speak or advocate for the employee. The meeting should take place in a private and comfortable environment.
Being professional in the meeting- During the meeting, things may get emotional. However, you need to be professional and calm. Clearly describe the problem without getting personal or aggressive. Do not use phrases such as 'You always' or 'You never.' Explain the impact on the business, the employee's work, and co-workers. Outline the outcomes you hope to achieve from the meeting. It is essential you make the employee feel safe and listen with an open mind. Ask questions to understand the context and the circumstances.
Having a plan- Once the problem has been discussed, work together with the employee to find a solution. Employees will be more motivated to improve their performance if they have contributions in the solution. While developing a situation, ensure that:
- the employee understands clearly the changes required
- the employee contributes solutions and improvements
- the employee has been offered appropriate support and assistance such as training, mentoring, or adjustments
- there is a set date for follow-up meetings
Recording the actions in a PIP- A document that outlines what the employee needs to improve their performance is a way to avoid miscommunication. The PIP will clearly identify what needs to be improved or changed, how it will be changed and any support that is to be given. The PIP gives the employee reasonable time to improve their performance and it clearly mentions the possible consequences if the employee's performance does not improve.
Monitoring the situation- It takes more than one meeting and conversation to resolve poor performance. Employers should regularly check-in with the employee to discuss progress and any obstacles. Continue to give them feedback and encouragement. Remember to be flexible and give time to the employee to improve their performance.
Dismissing an employee for underperformance
There is no specific requirement in employment law to give employees a series of warnings before dismissal. However, in a performance management situation, a series of warnings is the most appropriate approach as it allows the employee to fully grasp what the needs to be improved. Your employment agreement or policies may specify how many and what type of warnings may be used. If this is the case, you must follow the terms and conditions of employment.
Where the number and type of warnings are not specified, it is recommended giving at least a written warning and a final written warning before termination.
Consider things objectively before looking at dismissal of an employee. This is a complex area and it is ideal to get professional advice on the matter.
HR and HSW support for businesses
Peninsula works with small business owners and employers, supporting them in HR and HSW matters. Our advice team provides access to customised resources, documents, and advice in issues such as performance management and dismissal. Call us on 0800234037 to learn how we can help you.