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What to Do When an Employee is Underperforming

There are things more satisfying for a business owner, manager, or entrepreneur than having a team of employees that work efficiently and harmoniously together. When every member of your team is meeting their goals, the business grows and makes your life easier. However, when a team has one of more underperforming employees, it can derail your business goals.

No matter the cause, when an employee starts underperforming at work, your business suffers all around. Not only do they negatively impact productivity, but they can also affect the morale of the rest of the team. Like an array of dominoes, one unmotivated employee can influence the attitude of their coworkers and your customers. 

Underperforming employees can be a frustrating issue for leaders. However, it’s important to remember that every employee has the potential to improve and contribute to the success of the company. It’s important to take action as early as possible so you can keep your business growing strong.

By taking a proactive and compassionate approach, managers can help underperforming employees reach their full potential. Doing this will help contribute to the success of the company. In this article, we explain what to do when you have an underperforming employee.

1. Identify Problem Areas

The first step to resolving this problem is to take note of where your employee is failing to meet standards. Some employees naturally excel in certain areas but may struggle with other tasks. Getting to know your employees’ strengths and weaknesses opens up a great opportunity. You are better able to match workers with jobs well suited to their natural abilities.

It’s important to be observant for signs that an employee is underperforming. For example, if an employee struggles with customer interaction but delivers great results “behind the scenes”, they may just need to switch roles.

An employee who performs well, but inconsistently, may be struggling with problems in their personal life. There are many reasons why a typically hard-working employee might express disinterest with work, and the only way to identify the cause is to communicate.

2. Start a Discussion

Initiate a private, one-on-one conversation with your underperforming employee. To ease into the conversation, try starting off by acknowledging the areas of their work where they perform well. From there, you can transition into talking about their shortcomings. Make sure to keep an open mind and hear them out.

Even the simple act of starting this conversation can make a huge difference – when employees are offered clear communication, workplace productivity has been shown to increase by up to 30%.

This conversation should center around the goal of improving your employee’s performance at work, not punishing or shaming them. Get this: statistics say 67% of employees whose managers focused on their strengths were fully engaged in their work, as compared to only 31% of employees whose managers focused on their weaknesses. You don’t have to sugarcoat the situation, but you should aim to motivate your employee, not discourage them.

3. Clarify Expectations

Needless to say, unclear expectations can create problems in the workplace. During the discussion between you and your employee, make a point of going over workplace expectations.

Sometimes, employees start underachieving because they’re not pushed to do their best on a regular basis. Slacking off once in a while can easily snowball into a habit if left unchecked. And as a business owner, it’s your job to prevent that from happening. Sometimes, creating a tangible reference for your expectations such as a list or chart can help keep employees on track.

4. Provide Reassurance

A conversation about workplace performance can be daunting for employees. If you notice that tension is building up around the conversation, or if your employee seems uncomfortable or nervous, try to ease their worries with some gentle, positive reassurance.

Let your employee know that you’re having this conversation because you value them as a team member. Reassure them that you want to improve your professional relationship with them. Remind them that they’re not at risk for being fired, but that you’re here to help. This creates an extra layer of trust between you and your employee. It also lets them know that you’re in their corner.

5. Create a Plan of Action

There’s no better way to achieve success in the future than by creating a plan and following through. If an employee has been underperforming for too long, you can create a PIP, also known as a Performance Improvement Plan.

A PIP is an outline which contains details on how you and your employee can work together to improve their performance. It entails identifying problem areas for the employee. As well as goals they should strive to reach within an agreed upon time frame. 

Here are some of the steps that can be included in a PIP:

  • Identify the specific areas of performance that need improvement. This could be anything from attendance, productivity, or specific skills.
  • Meet with the employee to discuss the performance issues and gather input on potential solutions.
  • Develop specific, measurable, and achievable goals for the employee to work towards. These goals should be related to the identified areas of improvement.
  • Set up regular check-ins with the employee to track progress and make any necessary adjustments to the plan.
  • Once the employee has met the goals, evaluate their performance and determine if any additional training or development is needed.

It’s important to note that PIPs are intended to be a supportive and developmental process. Be clear, honest and respectful with the employee while discussing performance issues and creating the plan.

6. Coach & Follow Up

Don’t leave your employee out to dry after having a difficult decision. Instead, make sure to follow up after the conversation and check in with them. If you created a PIP or other improvement plan together, take the time to assess where they’re at and how they can continue to succeed.

Effective coaching means staying involved in the work improvement process. You don’t want to hover over your employees or add unnecessary pressure. But you should try to play an active role in their plan to perform better. Sometimes this means redirecting them when they seem distracted, changing their current project, or otherwise providing managerial support.

Coaching your employees personally has been shown to increase productivity by 70% on the individual level. Staying involved in your employee’s improvement progress means huge benefits for everyone involved, and your business.


An underperforming employee doesn’t have to mean the end of the world – or your business. Through effective communication, proper coaching, and patience, you can help motivate them to get back on track.


Also read:

Why Good Employees Are Hard to Find

8 Ways to Keep Your Employees Happy

Ari Bratsis
Team Writer: Ari is a writer, blogger and small business owner based in Washington state.

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Find Your Way · Grow Your Business · Leading Your Team · Productivity · Your Mindset

Team Writer: Ari is a writer, blogger and small business owner based in Washington state.

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