When employees underperform, a business can't operate at its full capabilities.

A business can't sustain itself if the employees it pays aren't doing their part to help the business function as planned.

The level of service drops. Customers and clients look elsewhere for better service.

And then, your revenue falls.

It's up to you, the employer, to act on poor performance when you're aware of it. Doing so could prevent disruption to operations, and even avoid any resentment from brewing in other employees.

So, you need to know what poor performance is, and how to deal with underperforming staff.

How do you define poor performance?

Underperformance in the workplace typically involves your employee:

  • Failing to perform the duties of their role.
  • Failing to complete their duties to the level that you expect of them.

Make sure you don't confuse poor performance with poor conduct.

What is causing the underperformance?

Managing underperformance will require you to ask questions of your employee, and of your business.

Does the underperforming employee have a line manager or supervisor? If yes, you might ask them these questions, which you should also ask yourself:

  • Have you given your employee clear expectations for their role?
  • Have you given your employee enough training to fulfil their work?
  • Could their workload be too high?
  • Have you hired the wrong person?
  • Are any personal factors affecting your employee and stopping them from working at the level required to meet your expectations?
  • Is the communication between management and your employee effective enough to help your employee perform the role?
  • Could there be a motivation issue, such as the employee wanting greater rewards for their role?

Once you've answered these questions as best you can, it's time to speak to your employee.

How to speak to an employee about poor performance

First, it's a good idea to include your policy for managing an underperforming employee in your employee handbook. You don't have to do this, but it's better to include it than not.

Make sure that all staff have a copy of this handbook—email it to them on their first day, or make it available on the company's computer hard drive/cloud storage.

Whenever you update a policy, let staff know.

Before you get too formal, an informal chat with your underperforming employee might be all it takes to get them back on track. Try to be sensitive and see the situation from their perspective during the discussion.

Begin the chat with a soft opening, such as this:

"I'm a little concerned about you. You don't seem to have been working at your usual high level of performance recently. Is something bothering you?"

If you have separate teams in your business, with line managers and supervisors, you might consider including your employee's line manager in this chat. Your employee and the line manager are likely to have a deeper relationship because they work within the same team.

End this chat with a note for improvement, and remind your employee to raise any issues they have with their workload or any tasks they have concerns about.

What if an informal chat doesn't work?

Then it's time to escalate this to a formal meeting to discuss their capability. In writing, invite your employee to a meeting to discuss their performance. Your employee has the right to be accompanied by a colleague or trade union representative at this meeting—and all other meetings in which you might take formal action.

In the meeting, you must be professional. Avoid a confrontational tone—you want to get the best out of your employee, after all, and that means you need to support them.

Make sure that, by the end of this meeting, they're aware of:

  • What you expect from them in their role.
  • Your feedback on their recent performance.
  • The gap between their current levels and the performance you expect from them.

Agree on an action plan (and confirm it in writing) to outline what improvements you require. Clarify a deadline—on the date of this deadline, you'll sit down together and review their performance. Their deadline should be fair—give your employee a reasonable amount of time to amend their performance.

If you're going to provide any further training or support to your employee to help them reach their potential, you should make it known in the action plan.

Be clear with your employee (again, confirm in writing) what will happen if their performance levels don't improve. If they will likely face a capability warning, then you must let them know. 

There's still no improvement, so what now?

If your employee doesn't improve, you should proceed to a formal capability process.

  • In writing, invite them to a capability hearing. Give them reasonable notice.
  • Explain why you're inviting them to a hearing.
  • At the hearing, let the employee give any feedback or evidence they have.
  • Decide the outcome at the end of the hearing, and follow up in writing.

Don't forget—your employee has the right to have someone accompany them in this hearing, such as a colleague or a trade union rep—but you're under no obligation to inform them of this.

Your employee has the right to appeal your decision. You should allow them reasonable notice to do so.

If the sanction you decided on was a warning or a final written warning, you should again outline (in writing) the employee's action plan for improvement.

Remind them that failure to improve their performance will trigger another capability hearing.

Firing an underperforming employee

If, following a capability hearing with an underperforming employee, you decide to dismiss them, you must inform them of this decision in writing. As normal, they have the right to appeal.

You must let them serve their notice period—but you can agree on a shorter notice period. Or, if agreed in their contract, you can pay them in lieu of notice.

Make sure that you always follow a fair procedure, such as in the Acas Code of Practice.

If you have written evidence of all of the above, you'll have a full audit trail to support you should this situation escalate to an employment tribunal later on.

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