A Practical Guide to Dealing With Poor Performance Before It Becomes a Bigger Problem

You have an employee who isn't performing as well as you need them to.

Perhaps they're:

• Missing deadlines.
• Making repeated mistakes.
• Producing poor-quality work.
• Failing to hit targets.
• Needing constant supervision.
• Not taking responsibility.
• Creating additional work for other employees.

You know you need to address it.

But you're not quite sure how.

So you give them a little more time.

Then another month passes.

Nothing really changes.

If you're wondering how to manage underperforming employees in a small business, the first thing I'd suggest is not immediately assuming:

“They're a bad employee.”

Poor performance can have many different causes.

Until you identify the real cause, it's difficult to identify the right solution.

Here's how I'd approach it.

What Is Employee Underperformance?

Employee underperformance occurs when somebody isn't consistently delivering the standard reasonably expected of their role.

That might involve:

Quality

Work contains too many errors or doesn't meet the required standard.

Productivity

Not enough work is being completed.

Deadlines

Tasks or projects are repeatedly late.

Sales

Targets or agreed activities aren't being achieved.

Customer Service

Response times, service or customer outcomes are below the expected level.

Responsibility

The employee continually needs others to solve problems they should be capable of handling.

Management

A manager isn't achieving the required outcomes through their team.

The important word is:

Expected.

Before telling somebody they're underperforming, ask:

“Have we actually made the expected standard clear?”

Don't Leave Poor Performance Unaddressed

One of the most common mistakes I see business owners make is waiting too long.

They notice a problem.

They hope it improves.

It doesn't.

They become frustrated.

Other employees notice.

Months later, the owner eventually says:

“I've had enough.”

But from the employee's perspective, the seriousness of the problem may come as a surprise.

Address performance problems early.

That doesn't mean immediately starting a formal procedure.

It means having an appropriate conversation when you notice a meaningful problem.

1. Establish the Facts

Before speaking to the employee, be specific.

Avoid:

“Your performance isn't good enough.”

What does that mean?

Instead identify:

What was expected?

What actually happened?

How often has it happened?

What's the impact?

For example:

Expected: Quotations sent within 24 hours.

Actual: 14 of the last 25 quotations took more than 48 hours.

Now you're discussing facts rather than impressions.

2. Ask Whether Expectations Were Clear

This is an important management check.

Did the employee know:

• What they were responsible for?
• What standard was required?
• What the deadline was?
• How performance was measured?
• What authority they had?
• What priorities mattered most?

Sometimes what looks like an employee-performance problem is actually a management-clarity problem.

If you've never clearly defined what good performance looks like, start there.

3. Have the Conversation Early

Don't wait until your frustration is obvious.

Arrange a private conversation.

Explain what you've observed.

For example:

“We've agreed that customer quotations should normally be issued within one working day. Over the last month, a number have taken considerably longer. I'd like to understand what's causing that and agree what needs to change.”

Then listen.

The objective initially is to understand the situation, not deliver a speech.

4. Ask the Employee What They Think

A useful question is:

“How do you think things are going?”

Their answer tells you a lot.

They may say:

“I know I'm struggling.”

Or:

“I thought everything was fine.”

Or:

“I've got too much work.”

Or:

“The new system is slowing everything down.”

Or:

“I don't really understand what I'm supposed to prioritise.”

Now you have somewhere to start.

5. Identify the Real Cause of Underperformance

I'd investigate at least seven possibilities.

Clarity

Do they know what's expected?

Capability

Do they have the ability to perform the role?

Training

Have they been properly taught?

Resources

Do they have the tools, information and time required?

Process

Is a poor system making their job unnecessarily difficult?

Motivation

Do they want to perform?

Accountability

Does anything happen when agreed standards aren't met?

Different causes require different solutions.

Is It a Skill Problem or a Will Problem?

This is a useful distinction.

Can't Do

The employee wants to perform but currently lacks:

• Skill.
• Knowledge.
• Experience.
• Training.
• Confidence.

That may require:

Training + Coaching + Practice + Support

Won't Do

The employee appears capable but isn't consistently applying themselves or meeting reasonable expectations.

That may require a very different management conversation.

Don't try to solve a motivation or conduct issue with endless training.

And don't treat a genuine skill gap as an attitude problem.

6. Check Whether Training Is the Problem

Ask:

“Have we actually taught this person how to do what we're expecting?”

Small businesses sometimes train employees like this:

“Sit with Dave for a couple of days and he'll show you what we do.”

Then six months later:

“Why aren't they doing it properly?”

Create structured training.

For important responsibilities, define:

Process

Standard

Examples

Practice

Feedback

Competence

Don't simply assume someone knows.

7. Check Whether Your Processes Are the Problem

Suppose an employee is continually late producing quotations.

You investigate.

They need information from three people.

Pricing exists in four spreadsheets.

Every quotation requires owner approval.

The employee isn't necessarily the main problem.

The process is.

Before focusing solely on the person, ask:

“Would a good employee struggle with this system?”

If yes, improve the system too.

8. Check Their Workload

Underperformance can sometimes be a capacity issue.

Perhaps an employee was originally responsible for:

A + B + C

but over two years you've gradually added:

D + E + F + G + H.

Nobody stopped to ask whether all of it could realistically be achieved.

Review:

• Workload.
• Priorities.
• Deadlines.
• Resources.
• Interruptions.

Don't use workload as an automatic excuse for poor performance.

But don't ignore genuine capacity problems either.

9. Check for Conflicting Priorities

This is particularly common in SMEs.

Owner on Monday:

“This is the most important thing.”

Owner on Tuesday:

“Drop that. I need this.”

Owner on Friday:

“Why didn't you finish Monday's job?”

That's not necessarily employee underperformance.

That's a prioritisation problem.

If priorities change, make it clear what has moved down the list.

10. Set a Clear Performance Standard

Once you've identified the issue, agree what needs to improve.

Avoid:

“I need you to do better.”

Instead:

“From Monday, all standard customer quotations need to be issued within one working day, with at least 95% meeting that standard.”

Now the expectation is measurable.

Use SMART Performance Expectations

A useful framework is:

Specific

What exactly needs to improve?

Measurable

How will you know?

Achievable

Is the expectation realistic?

Relevant

Does it matter to the role?

Time-Bound

When should improvement happen?

For example:

“Reduce quotation errors from the current level to fewer than 2% within the next six weeks.”

Much clearer than:

“Be more careful.”

11. Agree the Action Plan

Don't just identify the problem.

Agree what happens next.

For example:

Performance issue: Slow quotation turnaround.

Required standard: Within one working day.

Employee action: Prioritise quotations at 10am and 3pm.

Management action: Simplify approval process.

Training: Refresher on quotation software.

Measure: Percentage issued within one working day.

Review: Every Friday for four weeks.

Now you have an improvement plan rather than a vague conversation.

12. Ask the Employee What They Will Do Differently

This is important for ownership.

Ask:

“What are you going to do differently from tomorrow?”

Then:

“What support do you need from me?”

The employee should be involved in solving the problem.

Otherwise, the manager can end up creating the entire improvement plan while the employee passively receives it.

Put Key Actions in Writing

After the conversation, record what has been agreed.

For example:

Issue

What needs improving.

Standard

What is expected.

Action

What the employee will do.

Support

What the business will provide.

Measure

How improvement will be assessed.

Review Date

When you'll discuss progress.

Clear records reduce misunderstandings and become particularly important if performance concerns continue.

Where a matter moves into formal performance management or disciplinary action, make sure you're following appropriate employment procedures and obtain professional HR or legal guidance where necessary.

13. Provide the Support You Agreed

If you tell an employee:

“We'll give you additional training.”

provide it.

If you say:

“I'll get you the information you need.”

do it.

If you agree:

“We'll fix the broken process.”

fix it.

You can't fairly hold somebody accountable for an improvement plan while failing to deliver your part of it.

14. Review Progress Regularly

Don't have one conversation and return six weeks later.

Use scheduled reviews.

For example:

Week 1

Early progress.

Week 2

Review results and obstacles.

Week 4

Measure improvement.

Week 6

Assess whether the required standard has been achieved.

The appropriate period will depend on the role and issue.

Some performance improvements can be seen quickly.

Others require longer.

Use Target vs Actual

Keep performance conversations objective.

For example:

MeasureTargetActualQuotations within 24 hours95%82%Quotation accuracy98%97%Follow-ups completed100%100%

Now you can see:

What has improved

and:

What still needs attention.

This is much better than:

“I still don't think you're doing well enough.”

15. Give Specific Feedback

Avoid generic feedback such as:

“You're doing better.”

Instead:

“Last month only 60% of quotations were issued within one working day. This month you're at 88%. That's a significant improvement. We now need to get consistently above the agreed 95% standard.”

Specific feedback tells employees:

What's working

and:

What remains to be done.

Recognise Improvement

If someone genuinely improves, acknowledge it.

Performance management shouldn't become a process where the manager only notices failures.

If somebody has worked hard to improve:

• Reliability.
• Quality.
• Productivity.
• Communication.
• Ownership.

say so.

Positive reinforcement helps establish the new standard.

But Don't Lower the Standard Because Someone Is Trying

Effort matters.

But the role still requires results.

Someone may be:

Working extremely hard

but still unable to consistently perform the role.

That requires an honest conversation.

The question isn't simply:

“Are they trying?”

It's also:

“Can they perform the role to the required standard with reasonable support?”

What If Performance Improves and Then Drops Again?

This is common.

Performance conversation.

Improvement.

Three months later, old habits return.

Don't start from zero every time.

Refer back to:

• The original expectation.
• Previous conversations.
• Agreed standards.
• Support provided.

Ask:

“We've discussed this previously and performance improved. What's changed?”

Recurring performance problems may need a more structured response.

Don't Continually Compensate for Poor Performance

One of the hidden costs of underperformance is what everybody else does to compensate.

Perhaps:

The manager checks all their work.

Another employee fixes their mistakes.

You complete the tasks they miss.

The employee's performance appears manageable because the rest of the team is carrying the cost.

Measure the wider impact.

Calculate the Cost of Underperformance

Poor performance can affect:

• Customer retention.
• Rework.
• Overtime.
• Productivity.
• Management time.
• Sales.
• Profit margins.
• Team morale.

For example:

If an employee creates five hours of rework every week:

5 hours × 48 weeks = 240 hours per year.

That's six working weeks of additional work.

Performance issues can be expensive even when they're not immediately visible on the P&L.

Don't Let Good Employees Carry Poor Performance Forever

Your stronger employees notice when somebody isn't pulling their weight.

If nothing happens, they may think:

“Why am I working this hard?”

That can damage morale.

Good performance management isn't only about the underperforming employee.

It's also about being fair to the people who consistently deliver.

Avoid Public Criticism

Performance conversations should normally happen privately.

Publicly embarrassing an employee is unlikely to create constructive improvement and can damage trust.

Be clear.

Be factual.

Be professional.

But deal with individual performance appropriately.

Focus on Behaviour and Results, Not Personality

Avoid:

“You're lazy.”

“You don't care.”

“You've got a bad attitude.”

Those are broad personal judgements.

Focus instead on observable behaviour.

For example:

“Three agreed deadlines were missed this month without the delay being raised beforehand.”

That's specific.

You can manage behaviour and outcomes far more effectively than labels.

Don't Assume You Know Their Motivation

If performance has suddenly changed, ask what has changed.

There may be a workplace factor you haven't considered.

You don't need to become their counsellor.

But good management involves understanding relevant factors affecting performance and responding appropriately within your role as an employer.

Where health, disability or other protected employment issues may be relevant, obtain suitable HR or legal advice before making decisions.

Underperformance vs Misconduct

These are not necessarily the same thing.

Broadly:

Performance/capability concerns whether somebody can perform their role to the required standard.

Conduct concerns behaviour and compliance with workplace rules and expectations.

The appropriate process may differ.

If you're unsure which you're dealing with, get professional HR advice rather than guessing.

What If an Employee Is Great at Some Parts of the Job?

This is common.

Perhaps they're:

Excellent with customers

but:

Poor at administration.

Or:

Technically excellent

but:

Struggle to manage people.

Ask whether the role can reasonably be structured around strengths.

Sometimes the answer is yes.

Sometimes the weak area is fundamental to the role and needs improving.

Don't automatically assume every person needs to be equally strong at everything.

What If You've Promoted the Wrong Person?

A classic example is promoting your best technician into management.

They were brilliant at the job.

So you made them a manager.

But management requires different skills:

• Delegation.
• Communication.
• Accountability.
• Planning.
• Leadership.
• Difficult conversations.

Technical ability doesn't automatically create management ability.

If a newly promoted manager is struggling, ask whether they need management development, not simply more pressure.

Train Your Managers to Manage Performance

If every employee-performance issue still comes directly to you, your managers may need development.

Managers should understand how to:

• Set expectations.
• Give feedback.
• Review KPIs.
• Hold one-to-ones.
• Address problems early.
• Document agreed actions.
• Escalate appropriately.

Otherwise, you may have managers in title but the owner still performs the management role.

Use Regular One-to-Ones

Don't make performance discussions something that only happen when things go wrong.

A regular one-to-one can cover:

Results

What happened?

Previous Commitments

What was completed?

Problems

What's getting in the way?

Development

What support or training is needed?

Priorities

What matters next?

Commitments

What will happen before the next meeting?

Regular conversations make performance management much easier.

Don't Save Everything for an Annual Appraisal

Imagine hearing:

“You've been doing this badly for nine months.”

The obvious response is:

“Why didn't you tell me nine months ago?”

Feedback should be timely.

Annual reviews can have a role, but they shouldn't replace ongoing management.

Address meaningful problems when they arise.

Use a Performance Improvement Plan Where Appropriate

Where informal support hasn't produced sufficient improvement, a more structured performance improvement plan may be appropriate.

This might identify:

Performance concern

Required standard

Measures

Support/training

Timescale

Review dates

Potential next steps

However, formal performance management can have employment-law implications.

Make sure your approach is consistent with the employee's contract, your policies and current UK employment requirements. Where necessary, take qualified HR or employment-law advice.

Don't Threaten Consequences You Won't Follow Through On

Avoid:

“If this doesn't improve, there will be consequences.”

if you have no idea what those consequences are or no intention of acting.

Be clear and proportionate.

And where formal employment action may follow, make sure you're following the correct procedure.

Empty threats damage management credibility.

When Should You Consider Whether Someone Is in the Wrong Role?

After appropriate:

Clarity

Training

Support

Feedback

Time

Accountability

you may conclude the role simply isn't a good match.

That doesn't automatically mean the person is bad.

They may be capable in another role.

But keeping someone indefinitely in a role they cannot perform can be unfair to:

• The employee.
• Their colleagues.
• Customers.
• The business.

At that stage, get appropriate HR advice about the options available.

A Simple Underperformance Diagnostic

When someone isn't performing, ask these questions in order:

1. Do they know what's expected?

If no → Clarify

2. Do they know how to do it?

If no → Train

3. Do they have the resources?

If no → Provide

4. Is the process workable?

If no → Improve

5. Do they have capacity?

If no → Prioritise/resource

6. Are they being held accountable?

If no → Manage

7. Can they perform the role?

If uncertain → Support and assess

8. Are they willing to perform?

If not → Address appropriately

This prevents you jumping straight to conclusions.

A 30-Day Employee Performance Plan

Here's a practical starting point.

Week 1 – Diagnose

Define:

• Expected performance.
• Actual performance.
• Gap.
• Possible causes.

Have the initial conversation.

Week 2 – Support

Provide:

• Training.
• Clarity.
• Resources.
• Process improvements.

Agree measurable outcomes.

Week 3 – Review

Compare:

Target → Actual

Identify improvement and remaining gaps.

Week 4 – Evaluate

Ask:

Has performance improved sufficiently?

What still needs changing?

Does support continue?

Is a more formal process appropriate?

For significant or persistent employment matters, get appropriate professional advice.

Five Questions for a Performance Conversation

You can keep the discussion relatively simple.

1. What do you think is happening?

Listen first.

2. What is preventing you achieving the expected standard?

Diagnose.

3. What do you think needs to change?

Create ownership.

4. What support do you need?

Identify your responsibility.

5. What are you committing to do differently?

Create accountability.

Then agree how and when you'll review progress.

The Goal Is Improvement, Not Winning an Argument

You don't need the employee to say:

“You're right. I'm terrible.”

That's not the objective.

The objective is:

Understand the gap

↓

Identify the cause

↓

Agree the required standard

↓

Create action

↓

Measure improvement

Keep the conversation focused on the future.

Good Performance Management Can Improve the Whole Business

Done well, performance management creates:

• Clearer expectations.
• Better accountability.
• Stronger employees.
• Better management.
• Higher productivity.
• Fewer mistakes.
• Better customer service.

It can also reduce the amount of time the owner spends:

Checking

Correcting

Chasing

Redoing

Solving

That's important if you're trying to build a business that is less dependent on you.

Don't Become the Permanent Safety Net

If an employee continually underperforms and you continually compensate for it, the problem can continue indefinitely.

You check their work.

Fix their mistakes.

Complete missed tasks.

Calm unhappy customers.

Eventually you're doing part of their job as well as your own.

Support people.

Develop them.

Give them reasonable opportunities to improve.

But don't accidentally create a system where underperformance simply creates more work for the owner.

From Underperformance to Ownership

The progression you're trying to create is:

Unclear expectations

↓

Clear responsibility

↓

Measurable standards

↓

Regular feedback

↓

Employee ownership

↓

Consistent performance

The stronger your management system becomes, the less performance depends on the owner constantly watching everyone.

Want to Improve Employee Performance in Your Business?

I'm Kim Wheatley, a business coach and mentor helping SME business owners across Essex and the UK.

I work with established SME owners who often find that managing employees has become one of the biggest challenges as their business has grown.

We can work on areas including:

• Employee performance.
• Accountability.
• Delegation.
• Leadership.
• Management.
• KPIs.
• Systems and processes.
• Productivity.
• Time management.
• Business growth.

The objective isn't simply to tell employees to work harder.

It's to identify why performance isn't where it needs to be and create the clarity, management and accountability needed to improve it.

Book Your Free Business Growth Accelerator Meeting

If you're spending too much time dealing with employee performance problems, let's look at what's really causing them.

During a Free Business Growth Accelerator Meeting, we can discuss:

• Your employees.
• Roles and responsibilities.
• Performance expectations.
• KPIs.
• Accountability.
• Management structure.
• Delegation.
• Systems and processes.
• Where employee problems are consuming your time.

Then we can identify practical business and management changes that could improve performance.

Where a specific issue requires formal HR or employment-law advice, you should also obtain appropriate professional support.

Book your Free Business Growth Accelerator Meeting today.

Frequently Asked Questions

How do you manage an underperforming employee?

Start by establishing the expected standard and the employee's actual performance. Discuss the gap with them, identify the cause, agree specific improvements, provide appropriate support and review progress against measurable outcomes.

What should I say to an employee who is underperforming?

Focus on specific facts rather than personality. Explain the expected standard, what you've observed and the impact, then ask for their perspective before agreeing what needs to change.

Why is my employee underperforming?

Possible causes include unclear expectations, lack of training, inadequate skills, excessive workload, poor processes, conflicting priorities, insufficient resources, weak accountability or motivation. Diagnose the cause before choosing the response.

How long should I give an employee to improve?

There's no single period appropriate to every performance issue. It depends on the role, the nature and seriousness of the gap, what improvement is required and any applicable employment procedures. Expectations and review dates should be clearly communicated.

What if an employee doesn't improve after training?

Review whether the training addressed the real problem. If expectations are clear and reasonable support has been provided but performance remains below the required standard, a more structured performance-management approach may be necessary. Obtain HR advice where appropriate.

How can I measure employee performance?

Use measures relevant to the role. These might include sales, margin, productivity, deadlines, accuracy, customer response times, job completion, rework or overdue debt. Focus on a small number of meaningful measures rather than measuring everything.

Should I put an employee performance plan in writing?

Recording performance concerns, expectations, agreed actions, support and review dates can provide clarity for both sides. Formal performance procedures should be handled consistently with your policies, contracts and applicable employment requirements.

What is the difference between poor performance and misconduct?

Poor performance generally concerns capability or failure to meet the required standard, while misconduct relates to behaviour or breaches of workplace rules. The distinction can affect how the issue should be handled, so obtain qualified HR advice if you're unsure.

How do I manage poor performance without micromanaging?

Set clear outcomes and measures, agree appropriate review points and focus on results rather than continually checking activity. Give employees appropriate autonomy while consistently reviewing agreed performance standards.

Can a business coach help with underperforming employees?

Business coaching can help owners improve management structures, expectations, accountability, delegation, KPIs and leadership. Where an individual matter requires employment-law or specialist HR advice, that should be obtained separately.