What we're talking about

A poor performer is an employee who's consistently achieving below what's expected of them over a prolonged period. Given the fact that we all, to some extent, come to work with our baggage, it's a pretty common issue. Example behaviors include making avoidable mistakes, failing to meet the standards set, needing constant instruction, distracting colleagues or upsetting customers. 

Usually, there'll be an underlying reason, which needs to be identified and worked through in a compassionate way. It's not a process many would describe as fun but, in the absence of a dedicated HR team, it'll often come down to you, as leader, to bring in a wider ‘performance management’ strategy: this is how you'll measure employee progress to make sure it's in line with your business goals. The aim is, of course, to help the employee achieve their full potential in your team – but be aware that the worst-case scenario might be letting them go. 

Why it's important 

In a small business, every team member has a big impact – and one person's repeated poor performance can reverberate across the whole organization. Put simply: you can't afford to carry passengers. Beyond the effects on your business' output, it can also have a very detrimental impact on culture and morale, as resentment builds up. 

A poor performer isn't destined to be one forever: a well-considered and thoughtful performance management strategy can lift up your entire staff. A study from asset management firm Mercer suggests that staff are four times more likely to thrive if you work hard to understand their unique skills and interests. Plus, it's a lot easier and cheaper to improve a current employee's performance than to replace them. But empathetic, compassionate management is far from the norm – an illustrative study from Gallup, a management consultancy, suggests that only about 10% of US workers feel engaged after receiving negative feedback. You've got a lot to gain from learning how to deal with underperformance sensitively and productively.

Things to note 

It's not the same as misconduct. It's critical that you understand what's poor performance and what's misconduct. Poor performance can be unintentional and often stems from an underlying issue that can usually be resolved. The employee might have been hired in the wrong role or been badly trained, and be producing poor-quality work as a result. Misconduct runs deeper. It's basically rule-breaking: going against company policy. Think: bullying, harassment, theft or fraud. Serious stuff. You can find more examples of misconduct here. 

It should form part of a compassionate, holistic approach to employee performance. How you go about dealing with a poor performer should become a repeatable routine. All employees need to participate in a system where expectations are made clear, goals are set, progress is monitored and results are analyzed. They need to be held accountable and have constructive conversations to develop skills. Your performance system should cover things like what's expected of them (as set out in their contract of employment), their induction, regular one-on-ones and annual reviews. Managing poor performance and rewarding achievement are two sides of the same coin. 

Get your timing right. Though your performance management system will help ensure problems don't arise in the first place, you'll still need to be proactive and intervene at the right time. It's important to intervene early, saving your employee longer-term failure and embarrassment, but you can start gently – especially if it's a new job and the employee is learning to adapt. Keep an eye on the problem and, if it doesn't show signs of improvement, get involved before it's too late to fix. 

Know the protocol if you have to let them go. This guide aims to show you how to avoid having to fire an employee for poor performance (our extensive guide to letting someone go is right here). But there are certain things to know before you embark on an improvement plan with an employee. If you do have to let someone go, you need to have a fair reason and act appropriately during the dismissal. Be sure to read through the specific employment laws in your region. Documenting behavior at all steps of the improvement plan is a good tactic, so you have a record to back up your side of the story.

How to deal with a poor performer 

1. Identify the issue. If you're in a small company, you'll probably see the issue playing out yourself. To know if the behavior is sustained, keep track of each time the specific issue crops up and the feedback you've given to the employee. Sensitive conversations with colleagues will help you understand the full scope of the issue; it'll also make those employees feel heard and more willing to operate with a helpful team spirit, rather than heading down the route of gossip or resentment.  

2. Zoom in on the cause. Properly considering causes is crucial when deciding the best way to support your employee in raising their performance. Consider previous one-on-ones you might have had, as well as issues outside the work environment, such as with their health. The fault might be on your part, from failing to provide sufficient training to not communicating standards and protocols. Much of this can be recognized and rectified before you have to raise the issue. 

3. Give feedback. If you're content that the fault doesn't lie with you, it's time to raise it directly. Check out our guide to giving effective feedback before you get going. Start things off informally, checking in with them before explaining that there have been some performance issues and that you'd like to help get them back on track. Kindly, but clearly, give specific examples and clarify what's expected. Be sure to keep an open mind as you listen and account for their response. Allow them time to process and respond later if they need it. 

4. Support them. Collaboratively identify solutions and set some goals that align with your expectations. Be clear on when and how their progress will be measured, establish timelines and explain where support will be provided. Don't dwell on the possibility of formal measures at this stage, but make them aware that you're here to help – whether that's by organizing some training or speaking to any colleague who's causing problems for the poor performer. 

You'll need to set out what was discussed in writing, but be aware that it can be slightly ominous for an employee. Be sure to communicate that this is simply a tool to keep you both on track with your commitments. 

5. Review progress. In keeping with the timeline you've determined, track changes in the employee's behavior. Sometimes, just one conversation will be enough. Other times, if there's no noticeable change, you'll need to have another meeting. While technically still informal, it should be used to stress that improvement must happen – and that you'll enact formal proceedings if it doesn't. Prepare for more difficult intervention by continuing to write things down and making sure you have a comprehensive disciplinary policy – one that the employee can view.

6. Make a more formal plan. If there's still no improvement, let the employee know in writing that formal proceedings are set to begin. Familiarize yourself with best practice and the legal requirements and privileges that apply, depending on where you are. That could include the right to be accompanied or to appeal, or taking proper account of mitigating circumstances. Have another meeting, where you review everything that's happened and draw up a final improvement plan. Again, confirm the consequences of failing to meet goals by a particular date. 

7. More observing! Time for more waiting, watching and encouraging. Check in frequently prior to the deadline, pointing out good work and things that still need improvement. You should also be checking on the effectiveness of the people and processes you outlined to support the employee's success.

8. Meet again. Use this meeting to determine whether you'll be escalating or de-escalating proceedings. If the former, you may want to book in some time with an HR consultant to make sure things go seamlessly. You're getting into the territory of final warnings and dismissals. You will, of course, need to manage the aftermath sensitively and proactively – as part of your performance management system. If the latter, let the employee know that you're happy and that the formal process is coming to a close. Celebrate and reinforce that you're looking forward to a bright future.

9. Ensure it's in your manager's handbook. If this was a first for you, and you found yourself designing a performance improvement strategy as you went along, get what you did down in writing. Use what went well as a template going forward, to ensure people are treated the same way in the future. 

Key takeaways 

• Poor performance isn't the same as serious misconduct. You want to do all you can to avoid letting the employee go, acting with compassion throughout. 

• Communication is key. Be direct about what needs to happen. Listen throughout the process, letting your employee give their side of the story, then collaborate on practical solutions and set goals. 

• To avoid accusations of unfairness, have one central strategy for dealing with poor performers. It's an integral part of a wider approach to managing staff well. 

Learn more 

Perspective. From Harvard Business Review magazine, here are some tips on how to manage a poor performer who thinks they're doing great. 

Example. Here's a case study exercise from Leeds University, and here are some examples of what you shouldn't do when meeting an underperforming worker from members of the executive board of business magazine Fast Company.

Tool. You might want to make use of some performance management software, like Trakstar or 15Five.

A version of this article was published in the Courier Workshop newsletter. For more deep dives into essential business concepts, sign up here.