How Organisations Can Manage Underperforming Employees

How Organisations Can Manage Underperforming Employees
Employees are the critical building blocks of a company, and this is why retaining top talent and identifying and dealing with underperformance is one of the most challenging aspects of leadership. 

In an ideal world, everyone does their job and does it well. In organisations, the talent team often partners with the business team and makes use of the most effective tools and techniques available in the market to identify talent that has the best cultural and role fitment. Despite thorough filtering, some employees do not perform or deliver as expected. 

By its own design, an organisation will have a varied range of talent, and having to deal with underperforming employees is an inescapable reality that people and line managers are often faced with.

“If everyone is moving forward together, success takes care of itself” – Henry Ford

It is crucial to tread carefully here and make sense of the situation before taking any extreme steps. Such situations call for a joint understanding of the managers and the HR leaders to avert unpleasant outcomes and instead, help build up employees to realise their potential.

In the post-pandemic world, there’s been an increased focus on strong culture-building across organisations. Employees are the critical building blocks of a company, and this is why retaining top talent and identifying and dealing with underperformance is one of the most challenging aspects of leadership. 

Here are some actionable insights that can help improve the performance and deal with fallouts, if any. 

Early Detection and Open Communication

When employees underperform, the businesses can’t tap into their full potential either. This poses a real threat to business goals going unfulfilled and therefore it becomes crucial to identify the performance gaps early on in an employee’s journey. Managers must be advised to clearly define KRAs (key responsibility areas) and KPIs (key performance indicators).

There must be open communication at every level of the hierarchy to ensure zero ambiguity in terms of performance metrics. Regular monitoring along with a continuous feedback loop can help detect and solve any gaps before they become any bigger.

On the other hand, managers must cultivate an open and empathetic culture where employees do not hesitate to reach out to them for help or support and feel comfortable expressing their concerns. Employees should also receive ample encouragement from their reporting managers via open communication whether through conversations around development planning or constructive feedback.

Determine the Root Cause 

Once you have identified the problem, it’s time to delve deeper into it and identify what’s causing it. Is it the lack of skills or lack of resources or something more? It is important to treat employees with a human-first approach. There could be personal issues too that could be temporarily hampering their performance.

Engage employees in conversations to know exactly what can be improved and how they can be empowered to perform better. As each issue needs to be dealt with in a different way, managers should take into account these respective factors. Schedule periodic one-on-one catchups or team meetings and huddles to always stay in the loop. Encourage employees to come forward and engage in conversations that could help get a glimpse into the underlying factors affecting their performance. 

Training and Development Opportunities

The next step is to enable the employees with sufficient resources to be their best self at work. Incorporate training and development programs that are specifically tailored to fill in the identified skill gaps. If the internal training doesn’t suffice, open access to paid online training and workshops or invest in external courses to enhance their capabilities.

For instance, a financial services company requires highly skilled workers due to the complex nature of the industry and the high-risk environment that they operate in. Any slip-ups in the performance may not only endanger the customer’s money but also the company’s reputation. So, the employees should be equipped with all the necessary resources to overcome the knowledge gap.

Linking Performance to Recognition and Incentives

Besides everything else, motivation fuels good performance. One needs to devise a strategy to link rewards, incentives and recognition with performance in order to boost motivation. Don’t forget to celebrate and recognise even the smallest of victories. Organisations are increasingly getting creative with their incentive programs to boost employee confidence.

Beyond monetary rewards, high-performing employees get rewarded with houses, cars, holidays and a lot more to keep them passionate about what they do. This has dual benefits – it rewards the overachievers and creates an aspirational goal for the underachievers. Implement a system that rewards improvement, whether through verbal praise, peer recognition, or performance-based incentives.

The idea behind every initiative needs to be positive reinforcement that can act as a powerful motivator and boost employee morale.

Leveraging Strengths

Coming to work should be a happy experience, one that employees look forward to. People are happiest in roles where they get ample opportunities to apply themselves and play to their strengths. Underperformance could therefore also be owing to a mismatch in role expectations and deliverables vis-a-vis the strengths of a person. An average performer in one role might do a stellar job in a different role.

It is therefore worth the while of the business and HR leaders to look at the competencies and personality traits of the individual and figure whether the employee has been given the right professional opportunities.

At times, a small tweak in the current job role or a completely new responsibility might be the right solution to bring about the change from average to good performance, as the employee is able to shift mind share from their development areas and focus on leveraging their strengths.

Personalised Performance Improvement Plans

If you still fail to see the desired results, create a personalised performance improvement plan and set clear goals for them to achieve in a designated time period. Make sure that the goals are specific enough and are relevant to the organisational objective. Also, the results should be measurable in order to arrive at a conclusion. Don’t forget to review this plan weekly and make necessary changes where need be. 

Managing underperforming employees can be a complex task that requires the right blend of patience, empathy, mentorship and communication. By adopting a mix of right practices that work for your business, you can be more effective in tackling underperformance and mitigating its consequences.


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