What are the Steps to Managing and Improving Underperformance?
Learn how to identify and improve poor employee performance. Evaluate employees’ performance by comparing their output and behaviors to the agreed-upon expectations. Have an in-person discussion with an underperforming employee to identify the reasons for poor performance and create an improvement plan. Document the employee’s performance and improvement plan to evaluate their future performance and protect your business.
This article is for small business owners, HR professionals and managers who have underperforming employees. Underperforming employees can cost your business valuable time and money, so it’s imperative to address these situations as soon as possible. The possible reasons for poor performance are plentiful. The good news is that many of them can be resolved with a proper plan in place. If you want to improve your organization, it is important to learn how to identify, communicate and improve poor employee work performance.
Discussing poor employee performance can be uncomfortable, but you should do it as soon as possible when you notice an issue. Delaying these discussions will only continue to hurt your business. Most employee performance can improve with the right processes in place, so every small business should outline a formal plan for managing and improving underperformance.
“Small businesses fall into the trap of thinking they don’t need the same things they find in big business – formal policies, performance management programs or even documented discipline processes,” Chris Young, director of workforce development at the Texas Department of Transportation, told Business News Daily. “In fact, small businesses have less room for legal risk and need these things even more than large companies. Having formal policies and processes for performance and discipline will also professionalize your workforce faster than just winging it.” [Read related article: How to Craft Company Policies for Your Small Business]
Here is a three-step process your small business can follow to manage and improve employee performance.
- Discuss the issue with the employee in person.
The first step in improving performance is for the employee’s manager to have a private conversation with them about the issue. Approach the conversation with curiosity, not accusations. If necessary, involve an HR person who can help lead the discussion. The intent should be to not only uncover the problem, but also designate a solution that gives the employee a chance to succeed. Be direct and clear in what you are trying to accomplish, raising the issue with the employee in a professional, non-personal way.
Cory Colton, principal executive coach at Inflection Point Coaching, gave an example:
Do say, “I notice that X task was not completed when we agreed.”
Don’t say, “I notice you did not complete the task on time.”
Follow up the statement with curiosity. For example, you could ask, “Can you help me understand what happened that caused the deadline to be missed?”
Leaders and managers should be open to any feedback from employees. At the end of the discussion, the two parties should agree on what is necessary for the employee to succeed and create a plan for how they will move forward and check progress.
Young cited a similar verbal approach you can take to address the employee – the FOSA (Facts, Objectives, Solutions, Actions) method. In this performance improvement model, Young said, the manager identifies the facts of the poor performance without judgment.
“Then she links the desired performance to the organization’s objectives and waits for the employee to offer more than two solutions,” he said. “It’s critical that the employee develop the solutions, because whoever comes up with the idea owns it, and managers want their employees to own their solutions. Finally, they all agree to specific actions and a date to revisit the plan.”
- Document the discussion and expected deliverables.
In addition to discussing the problem and solution, you need to formally document them. You can keep an internal document for your reference and give the employee a letter for notice of unsatisfactory performance. Include details about the employee’s performance, the problems (e.g., quality, timing, behavior), the steps you and the employee have already taken, and the agreed-upon steps that will be taken moving forward.
Documenting this information can help you evaluate the employee’s future success. If the performance does not improve and you choose to terminate the employee, the documentation can serve as protection and evidence for why you made the decision.
- Create a performance improvement plan, or terminate the employee.
If the employee does not start meeting the new agreed-upon expectations, it is time to revisit the conversation in a more serious manner. Hold another in-person discussion with the employee about whether they would be most successful staying in their current role, moving to another role within the company or leaving the company altogether.
“If the employee decides that they want to remain in their current role, a performance improvement plan can be created that not only outlines a clear path forward toward success, but also includes any committed-to interventions (mentoring, coaching, training, HR discussions) and what the eventual consequences are for the performance not improving,” Colton said.