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How to Identify Employee Underperformance and Improve Performance Management

20 Jun 2018
The people within an organisation are the most valuable resource that it possesses. However, there may come a time when their performance begins to slip, and it is up to the leaders and managers within the organisation to identify this and rectify it through effective performance management.

Firstly, managers need to know how to recognise underperformance, then know how to approach the employee and discuss their concerns in a constructive way. This can be a daunting process especially if the manager lacks experience in dealing with conflict. Nevertheless, performance management is a key aspect of a manager’s role and therefore addressing issues concerning underperformance will most likely be something every manager has to do at some time.

Identifying Employee Underperformance

Underperformance is the inability to meet the standards expected within the organisation. At this point it’s important to note that the employee should be clear about what is expected of them in terms of their performance, through personal or company objectives, personal development plans, codes of conduct or any other performance measurement tool. It is important to make the distinction between poor performance and misconduct. Misconduct can be categorised as ‘non-compliance with rules and procedures or unacceptable behaviour’. This is very different to that of underperformance. Below is a list of issues that may indicate that an employee is underperforming:

  • Increased number of complaints from either customers or other colleagues
  • Targets or objectives not met
  • Poor quality in the work completed
  • Missing deadlines

As a manager you should be able to identify any changes with the employee. It maybe that you notice something about them that could indicate there are issues with their performance. Such as:

  • Absenteeism or persistently being late
  • Low motivation or unengaged
  • Higher stress levels than normal
  • Their standard of work drops

Reasons for Poor Employee Performance

After identifying that an employee is underperforming, and to begin the process of performance management the manager must understand what the causes could be for underperforming:

  • Are the expectations on the employee clear? As mentioned before, clarity of objectives is vital and a common reason for underperforming is that the employee is unaware of what their goals or standards are – or indeed what are the consequences of not meeting them are.
  • The employee may not have the required capabilities to carry out their functions. The employee may struggle with knowledge or skills expected of them in their role.
  • There is no feedback for the employee to understand how their performance is viewed by their manager.
  • There is a lack of motivation.
  • There are problems with other members of staff.
  • The employee has issues outside of work that they are dealing with, such as family issues or health problems.

Performance Management

Once the underperformance issue has been approached and the reasons identified, the manager can concentrate on performance management.

Many employees are often not aware that their performance is not up to the required standards and therefore they will be unable to correct it without being informed. That is why it is so important for managers to have regular feedback meetings so that they can performance manage at every opportunity. If these issues are not addressed in a timely manner they have the potential to become more serious if they are allowed to develop. By not performance managing an individual it could have knock on effects on the whole organisation and start to affect productivity.

The way to effectively performance manage an employee comes in three steps.

  1. Create an informal performance action plan that they can work on.
  2. A formal performance action plan is drawn up. Sometimes managers go straight to a formal action plan, this is just down to personal choice. Some managers like to have everything recorded and therefore the formal action plan suits their style better.
  3. If there is still no improvement it is time to look at disciplinary action.

3 steps of performance management in more detail

Informal Performance Action Plan

The informal action plan takes in a feedback meeting in a one to one setting. Within this meeting the manager will explain to them what is needed of them in their role, they will give feedback on where they are doing well and the areas that need to be addressed. It is at this point that the employee is clear about where their current performance is at compared to where it needs to be. After this, both the manager and employee should have an agreed plan to outline where improvements need to be made and when they must see improvement. Within this meeting the manager must be able to offer suggestions as to where they can help them and how other members of staff can also help them improve. There must also be clear consequences if they fail to improve. All the above must be kept in a record so that the manager can look back on what was agreed in this meeting. Then they will be able to assess if the employee has been taking required steps to increase their performance.

Formal Performance Action Plan

When there is a need for a formal performance action plan it shows that the employee needs extra help and support in attaining the level of performance required of them. If this is the case the manager needs to come to the meeting with an action plan that focuses on SMART objectives. SMART stands for Specific, Measurable, Attainable, Realistic and Time Bound. This means that the action plan will be able to show the employee the specific areas in which they need to improve on and by when. By having SMART objectives, it enables both parties to be on exactly the page when it comes to what needs to be improved and by when. By coming to the meeting with these objectives the manager can go through them with the employee this way they can discuss if they are attainable and realistic for the employee to achieve. The manager should also put forward any extra resources that could help the employee improve such as coaching, training or extra time. It should be stressed at this point that a formal performance action plan is not a disciplinary procedure the manager is simply trying to help the employee achieve the best they can. However, the employee should be told that if their performance has not met the required level in the time they were given further disciplinary action could be taken.

Disciplinary Action

There are only a few options left for a manager that has seen no improvement in performance from an employee even after they have tried to help them with performance management. The last option for them would be to start disciplinary action. Disciplinary action and dismissal would usually follow the following steps:

  • Inform the employee in writing that they are required to attend a formal disciplinary meeting and what the meeting will be regarding, giving them acceptable notice.
  • The employee has the right to be accompanied.
  • Once the meeting has begun inform them again why they have been called to this disciplinary meeting.
  • Give the employee the opportunity to explain their version of events and their feedback to the situation.
  • Use your records to give information regarding the previous informal and formal performance action plans, put forward the evidence of how and when you have given help improve the situation.
  • Explain what action you are going to take and why.
  • Give the employee 5 days to appeal the outcomes.

It is deeply regrettable that the action taken by an organisation would be dismissal of their employee and this should always be the last resort. However, in some cases it is the only option left. U.K employment law appreciates that SMEs are not able to sustain an underperformer within their organisation for a long period and therefore an employee that has less than two years of continuous employment with your organisation is unable to bring unfair dismissal again you in court, unless there is breach of contract or discrimination.

Reflecting on manager performance

At the end of the performance management process regardless of the outcomes it is always a good opportunity for a manager to look back on their own managerial style. They are given the opportunity to reflect on where they think they could have improved their own performance so that they are better able to help future employees in need of performance management.