Employees are the backbone of any business, and their performance is the heartbeat that drives its success. Yet, depending on the organization, underperforming employees typically make up between 0% and 20% of the workforce, with a median of 4%.
Even a small percentage of non-performing employees can trigger a domino effect—missed deadlines, strained resources, and lowered morale—that ultimately threatens the organization’s growth and stability.
This creates a crucial challenge for managers and leaders: how to effectively manage employees across all performance levels and transform potential obstacles into opportunities for growth.
But let’s face it—this isn’t an easy task.
Managing underperforming employees often feels like walking a tightrope, especially when these employees demonstrate loyalty but fail to meet productivity standards.
How do you strike the right balance between empathy and accountability? How can you guide employees back on track without sacrificing team dynamics?
This guide offers a powerful solution.
Drawing from my experience in managing underperformance, I’ve developed a proven 4-step action plan that goes beyond generic advice. This approach, built on a Performance Improvement Plan (PIP) framework, identifies hidden barriers, sets clear expectations, provides consistent feedback, and fosters a culture where every employee can contribute positively.
Whether you’re dealing with a few isolated cases or a broader performance issue, this action plan will help you drive meaningful change, unlocking not just individual potential but also the full potential of your team.
On this page
Document performance:
The first step in addressing employee performance issues is to document their performance. Keeping a detailed record of employee actions, behaviors, and outputs helps in identifying non-performance and managing bad employees.
While evaluating employees, look for clear indicators of underperformance. For example, in a sales department, it’s easy to see who isn’t meeting sales targets. However, in roles like customer service, performance metrics might include employee attitude, communication skills, and time management.
This process provides a transparent overview of who is meeting expectations and who isn’t.
Identify root causes of non-performance:
Understanding why an employee is not performing is crucial. Every employee is an investment, and finding the root cause of non-performance helps avoid premature termination and retain talent.
A one-on-one meeting is the most effective way to uncover underlying issues. These conversations should be empathetic, allowing employees to share their concerns openly. Common reasons for non-performance include:
- Lack of guidance: Employees may not fully understand their roles or what is expected of them.
- Skill deficiency: Employees may lack the necessary skills or training.
- Toxic work environment: A negative workplace culture can significantly impact performance.
- Personal issues: Sometimes, personal challenges affect an employee’s ability to perform.
- Lack of purpose: Employees may not see the value in their tasks or understand how their work contributes to the organization.
Once you identify the root cause, you can tailor the action plan accordingly.
Develop a performance improvement plan (PIP):
A structured Performance Improvement Plan (PIP) is crucial for setting clear expectations and tracking progress. Here’s a simplified structure for creating a PIP:
- Feedback: Document current performance issues and the areas that need improvement.
- Feedforward: Outline the steps for improvement, the resources available, and any support being provided.
- Timeline: Define a clear timeline for achieving the desired performance improvements.
- Follow-Up: Regular check-ins to discuss progress and adjust the plan if needed.
Make sure to communicate the PIP clearly to the employee, highlighting the support and resources available to help them succeed. Emphasize that the goal is not punitive but to help them reach their full potential.
Monitor Progress with Regular Follow-Ups
Consistent monitoring and follow-up are essential for ensuring the effectiveness of the action plan. Regular check-ins provide an opportunity to address any ongoing issues, offer additional support, and make necessary adjustments to the plan.
By setting clear milestones and regularly reviewing progress, you hold employees accountable and demonstrate a commitment to their development.
Conclusion:
Creating a performance action plan for non-performing employees requires careful planning, clear communication, and consistent follow-up. By documenting performance, identifying root causes, developing a structured PIP, and monitoring progress, managers can help employees improve their productivity and contribute positively to the organization.