Managing underperformance – how to deal with employee issues efficiently and effectively

Many SME owners agree that the difference between successful and unsuccessful businesses is down to the talent you have working for you.

Managing underperformance - how to deal with employee issues efficiently and effectively

Many SME owners agree that the difference between successful and unsuccessful businesses is down to the talent you have working for you. To an extent, your company is only as good as the people you employ.  

However, it’s not just hiring the right people; to get the best out of your employees you’ll need to create a working environment that keeps them both engaged and motivated.

Even with your best efforts to foster a positive working environment, underperformance can occur. There can be many reasons for underperformance, but one of the key outcomes of it (aside from the lack of output from certain employees) is creating resentment and lowering morale amongst the rest of your team. This is especially true, if certain individuals are continuously underperforming without it being addressed.

In this article, we explore underperformance, including how you can identify employees that are underpeforming and the process you should follow to address it.

How to identify potential employee underperformance issues?

At first, there may seem an obvious answer to this question, but in reality, the situation may be far more nuanced. What at first may appear to be a straightforward underperformance issue may be something different altogether. 

There can be a whole host of reasons why a staff member may not be working to their peak performance; some examples are as follows:

  • Unmet training needs
  • Poor clarity around performance expectations
  • Suffering as their whole team is not functioning cohesively as a unit
  • A ‘square peg in a round hole’ situation, i.e. the individual, would be far better suited to a different position in the organisation
  • Generally poor staff morale levels

The key point to take away here is that before treating the matter as an employee underperformance issue, be sure it’s indeed that.

The best way to do this is to monitor the team and the individuals within it over a sustained period, don’t be afraid to ask questions, seek input into how things can be improved and remain open to suggestions. Be wary of jumping to early conclusions and ensure that your employees feel that they can ask for support from you. An ‘open door’ policy is often the best policy.

If it’s indeed an employee underperformance issue, how do I address it?

The first step should be a very informal chat with the employee. This first conversation should be informal because it should provide a friendly opportunity to seek information from the employee concerned. However, above all, it should allow the employee to discuss and open up regarding any issues they may have in a supportive and confidential environment.  

What should we discuss at the meeting?

The meeting should be a general two-way discussion to outline your concerns whilst asking questions of the employee to explore what you can do as their employer to help them reach their potential. 

Suppose other matters come out of the meeting, for example, any family or health-related issues. In that case, these issues must be taken in a very caring and compassionate manner. 

If the employee prefers not to open up regarding such matters, you should respect their right to privacy. You must appreciate that you’re not a health professional, so it may be a case of recognising this and signposting to professional support where appropriate. 

Alternatively, the employee may feel more comfortable opening up to one of your co-owners / co-directors and again, where possible, this should be accommodated.

You must listen and take on board anything that comes out of this meeting, as it may well be that a simple solution comes to light during this conversation which draws the matter to a quick close in everybody’s best interests.

What happens if we cannot agree on a resolution at the meeting?

it’s entirely possible that you may not achieve a final solution through the discussion. In this case, you should keep progressing the matter by, for example, carrying out one or more of the following steps as may be agreed:

  • Schedule a follow-up meeting to discuss concerns further once both parties have had the opportunity to reflect on the initial meeting
  • Put in place any interim or trial arrangements which may have been suggested at the initial meeting (i.e. change to working arrangements/processes and procedures/supervision, etc.)
  • Arrange any additional training as may have been identified and allow the opportunity for the benefit of this training to take effect before assessing matters further.

Can I take things further if I need to?

Naturally, it’s preferable to keep things informal and achieve a mutually agreed solution that works for both parties. This is usually the best outcome, as you have a happy, motivated employee who can move forward with your business.  

You should only progress matters formally to a capability (or very rarely, a conduct) procedure as a last resort if you have exhausted all other options without success, or the employee is refusing to engage with you or fundamentally fails to acknowledge the underperformance issues that you have observed.

If you need advice on how to manage a formal underperformance process, leading to the possibility of the termination of an employment contract, you can speak to an expert employment contract lawyer at LawBite. We’ve been helping SMEs gain access to expert business legal advice at 50% of the cost of high-street law firms.

Clive Rich
Clive Rich

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