Effective Strategies for Managing Underperforming Employees: Tips and Best Practices


28 Feb, 2023

 Every workplace has encountered an underperforming employee. Whether it’s a new hire who isn’t living up to expectations, a long-time employee who has suddenly taken a turn for the worse, a negative team member who can’t seem to get on board with change, or a problematic employee who bullies and intimidates others, these situations can be difficult to manage.

However, ignoring the underperforming employee is not an option. Research by the University of Washington shows that just one poor performer can drag down the productivity of an entire team by 30-40%.

Trust within the team deteriorates; team members psychologically and physically disengage from the team, and anxiety and anger increase.

By not addressing the poor performer, you are throwing away 30-40% of your wages bill for that team each day the problem continues. In an era of tight budgets, very few businesses can afford to do this on an ongoing basis.

To effectively manage underperforming employees, you need to implement several strategies.

Set clear expectations

The first step to managing a poor performer is to ensure the employee understands what is expected of them regarding their role, responsibilities, and performance goals.

Ensure that the employee is aware of the expected performance standards, has a clear position description outlining their role and responsibilities, and understands the code of conduct expected in the workplace.

Also, check that the employee has the necessary skills, resources, and tools to perform their job.

This can help ensure that everyone is on the same page and that the employee knows what they need to do to meet expectations.

Check management and supervision

Many issues of poor performance are really cases of poor management and supervision.

Essential training may have been missed or skipped over. Expectations may not have been made clear. Questions about what to do may have been discouraged when the employee was uncertain. 

Identifying and fixing problems caused by poor management may bring the employee’s performance back in line. 

Provide feedback

If things are not improving, regularly provide feedback to the employee on their performance. This can include positive feedback on what they are doing well, as well as constructive feedback on areas where they need to improve.

Outline your concerns

The next step is to meet with the employee to outline your concerns about their performance.

Before doing so, gather clear evidence of the unsatisfactory performance and prepare workable solutions to recommend.

During the meeting, be specific about the issues and discuss examples of unsatisfactory performance. Use clear examples when discussing the issues (e.g., late attendance each of the past four Mondays.) 

Avoid generic statements such as “we are not happy with your performance” without providing tangible and specific examples of what you are concerned about.

Here are some tips on how to provide negative feedback.

Identify the root cause

Work with the employee to identify the root cause of the performance issue. This can help you determine the best approach for addressing the problem and developing an action plan for improvement.

Discuss the examples you have collected and ask the employee to respond to each example to identify the root cause of the problem, and carefully record and consider their responses. You may need to investigate their comments further before proceeding.

Consider the employee’s responses and determine if any underlying personal or workplace issues may be impacting their performance.

If their answers to the issues are unsatisfactory, then tell them that, in your view, the responses do not justify the poor performance.

Develop a performance improvement plan

Work with the employee to develop a performance improvement plan that outlines the specific actions the employee needs to take to improve their performance.

This can include setting clear performance goals and timelines, identifying training or development opportunities, and providing support and resources to help the employee succeed.

Make it clear that failure to meet the required standards will result in further action being taken.

Let the employee know when and how you will review their performance with them.

Following the meeting, give the employee a memo confirming the discussion and have them sign a copy to indicate receipt.

Follow up and provide feedback

Monitor and track the employee’s performance against the agreed performance improvement plan.

Follow up regularly with the employee to monitor their progress and provide regular feedback on their performance, both positive and constructive. This can help ensure that the employee stays on track and is making progress toward their performance goals.

Review the employee’s performance at the end of the agreed review period or earlier if other serious matters arise.

Monitor progress and take further action

If the employee has been given reasonable opportunities to improve and has not done so, have a final counselling session and issue a final warning that failure to improve may result in termination.

Know when to escalate

If the employee’s performance does not improve despite your efforts, you may need to escalate the matter. This could involve involving an external HR consultant, seeking legal advice from a workplace relations lawyer, or taking disciplinary action.

We also recommend discussing any proposed termination with a local HR Consultant or Workplace Relations lawyer before taking action to ensure legal compliance before you act.

Document everything

Document all discussions and actions related to the employee’s performance. This can include meeting notes, performance improvement plans, and any other relevant documentation. This can help ensure that everyone is on the same page and that you have a record of all actions taken in case of any disputes or legal issues.

Be fair and consistent

Be fair and consistent in your approach to managing underperforming employees.

Throughout the process, remember that the employee is entitled to have a support person of their choosing present, but their role is to provide support for the person and act as a witness to proceedings. Unless the person is a Union Delegate, their role is not to advocate on behalf of the person.

Ensure legal compliance

If you are in small business, remember to review and comply with the processes set out in the Small Business Fair Dismissal Code https://www.fairwork.gov.au/ending-employment/unfair-dismissal


Dealing with underperforming employees can be challenging, but it’s crucial to address the issues quickly and early. Don’t let them drag on and have a negative impact on the productivity of the entire team. By following these strategies, managers can effectively manage underperforming employees and improve overall team performance.

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HR Author and Lecturer with over 25 years' experience in human resources and workplace relations in Australia. Lead Author of Instant HR Policies & Procedures, NDIS Direct Employment HR Manual, and Employee Performance Reviews: Tips, Templates and Tactics.

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