How to Deal with an Underperforming Staff Member

All businesses whether big or small, whether profit or loss making will have to deal with the issue of under-performing staff members within their work-force. The most effective businesses will have performance management systems in place so that they can not only quickly identify under-performers, but so they can address the issues in  under  -performance.

How to Deal with an Underperforming Staff Member

Under-performance can be a difficult issue to address but it should not be neglected. Why? Take the example of a global manufacturing company; a Mckinsey survey into the practices of this firm found that ‘the best plant managers grew profits by 130% while the lowest performing managers achieved no improvement’. Mckinsey also looked at portfolio managers in a financial services business and shows that ‘top performers grew revenues by nearly 50% while average performers’ portfolios remained flat’.

So, how can a business deal with an under-performing staff member?

The best approach is to prevent it from occurring in the first place. This can be achieved by having effective talent management practices in place within your company. No business is too small for good talent management. At its most basic level, good quality talent management would comprise the following elements:

        1. Induction and Training of all new staff
        2. Preparation of quality job description for all staff
        3. Establishing of periodic goals to drive performance
        4. Annual Performance Appraisal
        5. Targeted Training Plan

To the newcomer this could appear like needless bureaucracy, but research from Mckinsey has shown that companies that excel in talent management enjoyed shareholder returns that were 22 percentage points higher than those who did not adopt good talent management practices.

But, even with the best talent management practices in the world, you are still going to be confronted with under-performing employees within your business. So, how should you deal with them?
The first thing to do is try and establish the reason for the under-performance as this will help to determine the corrective course of action. There could be a multitude of causal factors, each one requiring a different solution. Such reasons could be:

  • Employee doesn’t know what is expected of them as they have not been provided with a job description, goals, policies etc… or these have not been made clear.
  • The employee lacks the skills to do the job
  • Employee doesn’t know if they are performing well as they have not received adequate feedback
  • Low morale and lack of motivation or engagement
  • Personal issues including family stress

Having identified the under-lying reasons for the under-performance, you should establish the severity of the under-performance and how long it has been occurring for. You should then arrange a meeting with the under-performing employee to discuss the issue. The employee should be allowed to be accompanied by a support person or a union representative. During this meeting you should discuss the problem in an open, supportive format, ensuring the employee is able to express their point of view. Having discussed the problem and hopefully understood the reasons for under-performance, you should, where possible, jointly devise a solution with the employee. This is because an employee who has contributed to the solution will be more likely to act on it.

Having devised a solution, a written performance improvement plan should be developed in conjunction with the employee. The plan should set out the exact level of improvement that the employee is required to achieve and over what time period. It should also set out any training and support that is to be supplied by the organisation.

A date should be set for a follow-up meeting so that progress can be reviewed and discussed against the action plan. A written record should be kept of all discussions as they may be needed if further action is required. The employer should continue to regularly monitor performance until the employee reaches the acceptable standard and then they should be placed back into your normal annual appraisal process. If you do not have an annual appraisal process then it is recommended that you adopt one.

If the employee’s performance does not improve, then you may need to consider issuing warnings or even termination. You are advised to seek help from an employee relations professional before considering this latter course of action. For further reading on this topic, please read the Best Practice Guide to Managing Underperformance by Fair Work Ombusdman – Australian Government.