How to Address Staff Underperformance in Your Business

By Stephanie Hosking – HR Team Leader, Key Business Advisors

Managers often find addressing poor employee performance a daunting task. Confronting an employee to let them know they are not doing well would make any of us feel uncomfortable. But it is vital to address this issue early, as an employee’s performance is unlikely to improve by itself and the negative impact can spread quite quickly.

So, what is underperformance?

Simply put, underperformance or poor performance is a failure to perform the duties of a position or perform them to the standard required. It can also include non-compliance with workplace policies, rules or procedures.*

Underperformance is not the same as misconduct. Misconduct covers serious behaviours such as fraud, theft, assault or the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment, which may warrant instant dismissal. An investigation is usually required before proving misconduct has occurred and whether disciplinary action should be taken.

Should I address underperformance?

The real question is, what happens if underperformance is not addressed. If employees keep working at an unsatisfactory standard, it can impact on:

  • Customer Service – often seen through a higher number of complaints and unhappy clients. This can do serious damage to a business’ reputation and decrease in profitability.
  • Team Morale – seeing a colleague getting away with not performing at the required standard is demoralising and could lead to unhealthy and unproductive behaviour by fellow employees.
  • The Bottom Line – poor performance leads to poor sales.

Underperformance should be managed promptly, as employees are often unaware they are not performing well and so are unlikely to change their performance. It is important not to wait for things to go from bad to worse. The employee should know that his or her performance is unsatisfactory and a manager should conduct a performance counselling session to get them back on track.

In return, addressing underperforming staff increases staff motivation and results in employees performing at their best. Implementing an effective performance management system can have significant benefits for your business, as it can lead to happier, more motivated and better performing employees. 

Follow these 4 steps to address employee underperformance:

1.   Prepare for the performance counselling session

Ensure you are clear about your issue. Take the time to gather all the relevant facts before the meeting, such as the employee’s position description, monthly targets, and any previous discussions/counselling sessions that addressed the same concerns.

2.   Invite the employee to the meeting

Advise the employee in writing of the purpose of the meeting, the date and the location, ensuring it is in a private setting. Give them at least 24 hours notice and ensure they know they can bring a support person of their choice if they would like to.

3.   Meet with the employee

Follow a guide to ensure you follow all the steps of a performance counselling meeting:

  • Outline the concerns you have with the employee’s performance; show them how they are underperforming by giving specific examples with time and dates.
  • If applicable, remind them of any previous warnings or conversations you had related to their performance.
  • Give them an opportunity to respond.
  • Take a break if necessary to think about what the employee has brought up and take into consideration their concerns (if any).
  • Discuss a solution or plan to the satisfaction of both parties. Seeking the employee’s input is more likely to improve their performance.
  • Work out what specific training needs to be put in place that will assist with improving the employee’s performance. Devise a performance improvement plan and set follow up meetings.

4.   Follow up actions from the meeting

If the employee was given a warning, you should send them a letter outlining the concerns and the reasons for the warning. Details of the performance plan should be attached with the review period.

If the employee was issued with a performance improvement plan, follow up meetings with managers should be scheduled to monitor the performance and feedback given to the employee. Set some goals that work for you, the business and the employee, and be committed to making improvements. Provide the team member with a copy of the performance plan and place another copy in the team file.

At the completion of the set performance period, it is essential that you conduct another meeting with the employee. During this meeting, you will go through the performance plan you set at the last meeting, and advise the employee whether or not they have been successful. If they have successfully completed the performance plan, congratulate them and ensure that they know you require them to continue to perform this way moving forward. If they have not been successful, you may need to take further action such as setting a new performance plan/period, issuing them with a verbal warning or a written warning, or in extreme cases, termination of their employment.

Keep in mind that the purpose of performance counselling is to assist employees to improve their performance, not to terminate them at the first sign of problems. Use positive language and focus on the behaviours and actions of the employee. Most cases of underperformance are the result of a lack of training, the employee not understanding the requirements of the role, or not having the required skills or abilities. With further training, clear expectations and constant feedback, most employees will be able to improve their performance and become aligned with your business’s purpose, values, and vision.

For support or assistance in this area, please contact our HR Team at Key Business Advisors on 1300 4 ADVICE

sources:
*: https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/best-practice-guides/managing-underperformance

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