Managing underperforming staff members

When you’re running a business, it can be disheartening when you notice an employee isn’t pulling their weight. Not to mention frustrating, and time-consuming, especially if it means you have to pick up the slack. So, what can you do about it?

Take a step back 

Before you do anything, take a step back and consider the why. Rather than go in guns-blazing, considering why your employee is underperforming will help you determine how to handle the situation. The best way to do this is of course to engage a gentle conversation with the employee — there’s no need to go in on the attack. 


Explain what you’ve been observing, using some key examples, facts and statistics if you have them, and give them the opportunity to share their perspective, rather than accusing them. Then, explain how their behaviour and underperformance is impacting the business and the rest of your team. 


Even if it isn’t immediately obvious, there’s always a reason for underperformance. So, during your chat, you’ll probably run in to one of these four common scenarios. 

1. Your employee genuinely doesn’t understand their role. 

A simple breakdown in communication can have some pretty major impacts when left to fester. If you failed to provide an employment contract upfront that outlines the employee’s duties (or did but it’s very vague), they can hardly be blamed for not knowing what’s expected of them. 

2. Your employee knows what to do, but feels unequipped to do it. 

This scenario is probably equally as frustrating for your employee as it is for you. Usually, they want to complete the task at hand, but do it wrong or take a long time because they don’t have the right skills or resources to do it effectively. 

3. Your employee isn’t passionate about their role and feels unmotivated. 

Perhaps the trickiest underperformance scenario to overcome — this might include a shift in department, more training, or a new project. If an alignment of interest can’t be reached, they might simply be a poor fit for your workplace and need to move on. 

4. Your employee may have external pressures or stresses you aren’t aware of that are affecting their work. 

This one tends to blindside employers because the issues can be private or embarrassing for the employee. It could be that your employee is enduring external pressures or stresses that are affecting their career. For example, financial hardship, relationship difficulties, the death of a loved one, or family illness. 

Prepare to perform 

With the initial discovery conversation out of the way, it’s time to determine the next steps for supporting your employee as you manage their underperformance. Create a plan that outlines measureable actions and realistic goals — in a reasonable timeframe. Ask what resources and support the employee needs to accomplish the goals, and give them time to adjust to their new or different duties. Involve them in the process so that they feel empowered, as opposed to micro-managed (even if that’s what you feel like you have to do) or patronised. 


It’s also important that they understand there will be consequences if underperformance continues. You are running a business, after all. These consequences are up to you — it might be reduced work hours, a demotion, or termination. 


At the end of this meeting, the goal is to ensure that your employee: 


  • Has a clear understanding of what’s required of them. 
  • Has a documented plan for improving their performance. 
  • Is aware that they’re performance is being monitored. 
  • Is aware of the consequences if their performance doesn’t improve. 


Helpful resources 

This Managing Underperformance Checklist will help you easily tick off the steps to management. Additionally, this Meeting Plan will ensure nothing is overlooked as you meet to discuss the next steps with your employee. Finally, to ensure you don’t accidentally engage in unfair dismissal or similar areas, it’s a good idea to reach out to Fair Work for advice. 

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