Delicate situations like raising underperformance issues with a team member require more thought and preparation than one may think.
As Charlie's CEO, performance has been one of the most challenging aspects of my work when we started the business. Indeed, it was often tempting to leave difficult subjects like this one to the side, and simply focus on the good stuff.
However, we knew that setting the right standards of performance for our team members was crucial to guarantee high-performance behaviours in the long term.
That's where addressing underperformance also came in straight away – how would we make the process fair and compliant whilst still treating our team members with care and respect?
What is underperformance?
Underperformance is when an employee’s work is below the required standards expected from the company. For example:
- The work they complete is of poor quality or below expectations
- They fail to keep up with their performance targets or professional goals
- They consistently miss deadlines or have absenteeism problems
- They are not able to contribute to their team’s work (if that’s required by their role)
I'd like to highlight, however, that all these situations can't necessarily be put on the employee's shoulders.
As a small business or startup, it can be difficult to give your team members all the attention and care they need to do their best job. Working in a startup does require a lot of self-sufficiency, but it doesn't mean team members should be the only ones to blame when performance issues arise.
There are a few reasons why your team member may be underperforming, and they may come under different forms:
- You've hired someone unqualified to do the job – are you expecting too much from them at the level you've hired at?
- You've not set clear goals – did you give them KPIs and targets?
- You've not given them the right resources to perform – do they have adequate time to accomplish their tasks?
- You've not paid attention to what's going on with them – do they get along with their team members?
The performance issues I outlined above all come together under the same bracket – the only problem is making sure you identify them on time, and before they lead to real underperformance issues.
To give you an idea of what it can be like, they can all lead to a few outcomes that you wouldn't want for your team members:
- Lack of motivation
- Unhappiness at work
- High levels of stress (learn more about mental health and performance in this blog post)
All these elements often tie up together, but let's see how you can identify what's going on when it comes to your underperforming employee.
Identifying underperformance before it becomes a problem
When it comes to employee performance issues, we often tend to look the other way. We hold off facing the problem until it has reached such a scale that only extreme measures, like dismissing a team member, will do.
If you think that’s the direction you’re going, stop. There are many ways you can turn this around — for the sake of your business and of your team.
These are the most common mistakes I've seen when it comes to understanding what performance management is:
- Procrastinating instead of facing performance problems head-on. You’ve noticed a team member is falling behind — still, you’re reluctant to face the issue. Maybe you hope you will be proved wrong, or that the team member in question will get back on track without your direct intervention. However, the longer you wait, the more the issue will escalate into something that could potentially hurt your business.
- Failing to identify the root causes of underperformance: if you don’t find the reason behind poor performance, you won’t be able to solve the problem in a way that’s fair to your employee and effective in the long term. And you’re likely to fall into the same problem all over again.
- Letting the performance issue build up until it gets to such a point that dismissing the team member seems the only way out.
- As an outcome, having to spend time and resources on re-hiring for that role.
If you recognise yourself in any of these stages, you are still able to course correct. In the next section, we will walk you through the steps you should follow to get ahead of performance issues in a way that is compliant and fair for your team.
Three steps to address underperformance with your team members
Every performance issue is different and should be addressed on a case-by-case basis. However, there are three steps you should always follow if you want to get to the bottom of the problem:
1. Find the cause behind underperformance
2. Tackle underperformance and get your team member back on track
3. Set up the right appraisal processes to prevent future performance problems
Managing underperformance correctly is key if you want to build a business where people can perform at their best:
- You’ll be able to make fair and rational decisions backed by facts, not emotions.
- Your team will be more motivated, knowing you recognise and reward hard work fairly.
- Your business will be protected from unfair dismissal charges and subsequent legal actions.
Step 1 – Finding the cause behind underperformance
Most companies look at underperformance as a problem in itself, while in most cases it’s just the tip of the iceberg.
If someone in your team has been missing targets, or their work standards have declined, you have the responsibility to look into why that is:
- Are they receiving regular feedback from their manager?
- Are they motivated and happy with their role and their career prospects?
- Have they had all the training and mentoring they need to meet expectations?
- Are there any personal problems or circumstances that may have negatively impacted their productivity recently?
When going through the possible reasons behind underperformance, you have to make sure you look at them as objectively as possible — you must remove from the process any bias you may have about your member of staff to:
- Paint an impartial picture of the situation, one that’s unbiased and free from workplace politics.
- Clarify any doubts with your team member in a purposeful and understanding way, asking the right questions on a regular basis to find out why they’re struggling (you can perhaps get help from our performance review questions for some inspiration)
- Identify and define the underlying problem that’s causing your team member to underperform.
This process is key to solving your performance problem in a way that’s rational, compliant and fair for your team.
To do that, it's often better to get someone external to the company – we're all guilty of unaware bias, and it might affect our decisions.
At Charlie, we have HR experts that can handle these delicate situations, without having to know your team members or work with them, giving you all of what you need.
Simply book a call with one of them today to find out more about how this can help.
Step 2 – Tackle underperformance and get your team member back on track
It’s important to stress that the objective of that initial research stage is not to find a reason to dismiss your team member. As an employer, you have the responsibility to do anything that’s in your power to help them improve their own performance.
So, once you’re sure you know what’s causing your team member to underperform, you’ll have to tackle that root cause and help them get back on track.
This, of course, will mean different things depending on the problem you’ve identified.
If you’ve never gone through a performance improvement process before, you may want to make sure:
- Your efforts are truly effective and will have a sustainable impact on your employee’s performance.
- The process you follow will protect you from any eventual legal actions, in case you find that dismissing your team member is inevitable.
Here are some tips on how we handle it at Charlie to help you along the way:
- Simply giving the team member a gentle nudge and some actionable feedback
- Improving the interpersonal feedback exchange between manager and employee
- Setting up ad-hoc training
- Offering flexible working arrangements or mental health support
- Creating a comprehensive Performance Improvement Plan
A good way to do this as well is to encourage running 360-degree reviews to make sure you get all the feedback you need from your team members.
Step 3 – Preventing performance issues from happening again
Whatever the outcome of this performance improvement process, you’ll want to make sure you won’t need to go through it again.
From my experience managing people in the early days of Charlie, I found that, in a striking majority of cases, underperformance problems are caused by long-standing issues in the way companies manage a few aspects of their business:
- performance processes
- probation periods
As much as a daunting task, if you perfect these three processes and agree on a course of action, you’ll be very unlikely to have performance problems in the future.
“In order to actually effect action, people need a specific and clear understanding of the behaviours we’re asking them to adopt.” Sara Mirza, HR Advisor at CharlieHR
Setting the right performance process to avoid underperformance issues
A large percentage of performance problems are caused by not having good appraisal processes in place.
- Do your team members have a clear understanding of what is expected of them?
- Do they know what level of performance they should achieve to progress in their roles?
- Do they have regular conversations with their managers to check on their progress and exchange performance feedback?
- Do you offer them clear touchpoints where they can expect a pay raise or promotion? Have you helped them build their own personal development plan?
If you’re unsure about any of the above, that means you’re not giving your team what they need to do their best work — no surprise they’re underperforming!
Rethinking the way you manage performance and progression at your company can be very hard work — but also extremely rewarding for your team and your business, once you get it right.
If you're not sure how to get started, our performance review software can help you build a smooth and efficient process that you can set up in a few clicks.
Simply schedule regular review conversations where managers and team member can share their feedback – at Charlie, we do three per year.
Going from there, you don't have to think about much or set time aside to build a complete process, our software can handle it all for you.
Building a solid and fair hiring process
Hiring the wrong person for the job will almost certainly result in performance problems in the long run. To make sure you don't get team members underperforming right from the start, here's what you should think about before hiring someone:
- Decide what stages to include in your hiring process, depending on your team size and on the seniority of the roles you’re hiring for.
- Set up an efficient selection process to test candidates’ skills and their affinity with your company culture.
- Have a clear idea of what level you want to hire at, and what kind of experience your future team member needs to have
- Work to avoid bias in your hiring process, so that you always pick the right candidate and build a diverse and inclusive team
Use probation periods efficiently
At Charlie, we like to think about probation periods as extended interviews. This is your chance to check if a new joiner can perform at the standard they’ve been hired for. And it’s their chance to ensure they like the way you work and are comfortable with what’s expected of them.
When I speak to other small businesses, I often see companies having serious performance issues as a result of not making the most of their probation periods. Here's some of the advice we can give out when it comes to them:
- Spot any warning signs and test your new team member’s skills and motivation.
- Run regular check-ins and address any issues as soon as it arises
- Give constructive feedback to help your new joiner start off on the right foot
Our probation periods last three months, which gives us more than enough time to make a decision on the outcome.
We're careful, however, to never leave anyone in the dark and always make sure they have a good idea as to whether their probation period is going to be extended or if it's been going well.
What happens if your team member is still underperforming?
One thing I want to make clear is that decisions like dismissing an employee should never be taken lightly. At Charlie, we see dismissals as the very last resort when we've exploited all other ways of helping our team members.
So before you make that decision, you'll also need to review a few reasons why underperformance may be happening and when the plan you put in place may not just be enough because of specific circumstances.
For example, if a team member is ill for an extended period of time and is underperforming because of it, it's a good idea to put a phased return to work in place so they have a chance to catch up.
You should always be attentive to your employees' needs in times of distress, and not put an emphasis on their performance at these particularly challenging times.
However, if your team member is not improving, it's important you take the necessary steps for your business. Here are a few reasons why you may be allowed to dismiss an employee:
- For issues such as an employee always being late or absent from work (for unauthorised reasons) as long as you've followed the right steps as stated by Acas
- For gross misconduct – in this case, there is no need for a formal procedure when it's a case of theft, physical violence, gross negligence or serious insubordination
- For serious misconduct – this is in case of serious underperformance that has harmed the company
If you're not sure what to follow or if you're worried you're not complying with the law, we would advise you to get an HR expert by your side to make sure you comply. You can also have a look at our guide on how to fire someone like a grownup if they don't meet your expectations.
And if you need more resources on how to deal with performance, here is where you can find them: