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How to Deal With an Underperforming Employee

Ever held back on giving honest feedback to an underperforming employee because you were trying to be kind? Most of us have. But the last thing you want is for a team member to fail at their job because you didn’t let them know they weren’t meeting your expectations. That’s actually the opposite of kindness.

Here’s the deal: Great leadership requires a backbone. Your team members can’t do better if you’re too busy avoiding conflict to tell them there’s a problem to correct. What happens if you don’t speak up? There’s a good chance you’ll boil in frustration while they remain clueless that their job is on the line. In the meantime, everyone else on your team is confused about your standards and what winning even looks like.

To be unclear is to be unkind—to everyone.

We understand the struggle . . . having hard conversations is hard. Didn’t mama always say, “If you can’t say anything nice, don’t say anything at all”? She did. But even mama understood that sometimes the nicest thing you can do is tell people kindly what they need to hear for their own good.

All that tough love brings us to some good news: You can learn how to deal with an underperforming employee with kindness and truth. It really boils down to communicating your expectations regularly, clearly and directly. But before we get to what that looks like, let’s get clear on what underperformance is and why people underperform.

What Is an Underperforming Employee?

An underperforming employee is someone who consistently fails to meet the requirements of their job. Some examples are:

  • Falling behind on quotas for sales, production and customer care
  • Missing deadlines
  • Overspending their budget

Team members can also miss the mark in attitude and character issues, as well as in their commitment to your company values. Here are some outward signs of some inner struggles a team member may have:

  • Getting to work late, leaving early, or calling out repeatedly
  • Gossiping and throwing people under the bus
  • Deflating the team with a bad attitude and lack of teamwork

Related article: What Is Work Ethic (and How to Build a Strong One in Your Team)?

Why an Employee Might Be Underperforming

It’s tough to admit we don’t always bat a thousand with who we hire and how they develop. In a perfect world, every workday would be sunshine and rainbows, right? And every team member would excel as a high-performance sunshine-and-rainbow maker. But news flash: The world’s not perfect. And neither is any business or the people running it. Those real-life struggles and glitches create problems like the ones below—all with solutions you can put into action.

Lack of Proper Onboarding and Training

Without realizing it, you could throw a new team member into the job with no idea of standard operating procedures or who to go to with questions. That’s a surefire way to block their success and keep them from doing things the way you want them done.Solution: Retool your onboarding and training process to make sure new hires have the equipment, supplies and training they need to do their jobs well.

Related article: How to Create an Onboarding Plan Your New Employees Will Love

Lack of Role Clarity and Clear Expectations

The priorities that make total sense to you might be clear as mud to someone else. Or maybe you’ve tagged 25 functions within their role as urgent and important. Then none of them lands on top—and nothing gets focused on well. The result: Team members spin in circles, waste valuable time, and fail to gain traction.Solution: Help team members create Key Results Areas as a clear road map for what winning looks like in their role.

Related article: How to Create Role Clarity Using Key Results Areas

Free KRA Template

Want an easy way to create KRAs for your team members? Grab our free template, plus get a couple examples of completed KRAs for reference.

Get the Free Template

Lack of Consistent Communication

What’s the only way you and your team members can really know what’s going on in everyone’s minds? By telling each other. Yet most of us fail to prioritize regular, meaningful times to share, listen, instruct, give feedback and solve problems.

Solution: Set up regular communication rhythms through one-on-one meetings and a weekly team member report. (Hint: Consistent communication allows you to address a team member’s underperformance issues when they’re small and easier to solve. That’s much less scary than an out-of-the-blue “we need to talk” moment.)

Related article: How to Communicate Effectively

Temporary Personal Issues

Scary doctor’s reports, bad breakups, and other hard life events happen. And they can throw off productivity.Solution: Use one-on-one meetings and team member weekly reports to stay on top of what’s happening with your team. The sooner you know about a personal issue, the better you can support your team member and help them manage their work while they deal with it.  

Related article: Top Weekly Reports and the One You Can’t Live Without

Wrong Seat, Right Bus

Ever put an introvert in a people-heavy role or a creative in a numbers-heavy role? You might have a talented, excellent team member who’s simply not working in their sweet spot (aka they’re trying to fill a role that drains them).Solution: Learn where their strengths lie, and then move the team member to a new position that fires them up. It’s a win-win for you both. You get an employee who is performing well in their new role, and your employee gets to do work they love.

Wrong Seat and Wrong Bus

Sometimes you simply hire the wrong person. Then what? As psychologist and bestselling author Henry Cloud put it, “You have to bring an ending to something when you’ve lost hope.”

Solution: Get clear on how to fire someone the right way to ensure you handle it with dignity and respect. But before you lose all hope, make sure you’ve done everything in your power to manage your underperforming employee well.

How to Manage an Underperforming Employee

Whenever someone’s performance is lagging—and especially if their job is on the line—you owe them clarity and guidance. So take a deep breath now, and let’s tackle what to do if you have a team member who’s not working at the level you need.

Confront the poor performance.

The first thing you have to face about poor performance is that you actually have to do something about it. Sweeping poor work and wrong behaviors under the rug won’t make them go away, and it’s not fair to leave the team member clueless. So, well before you get to the point of letting someone go, be direct about the facts related to their underperformance. Remember: You want to season honesty with kindness and clarity. Never be harsh, disrespectful or passive.

Related article: How to Handle Difficult Discussions

Course-correct early and often.

It’s a lot easier for someone to get back on track when they’re just two feet off course rather than 200 feet. So, we’re beating the consistent conversation drum again: In your regular conversations and one-on-ones, make sure you’re clearly defining the change your team member needs to make. And if they need some extra guidance, let them know you’re going to call out the issue whenever they do it—not to nag or nitpick, but so they can correct it in real time. Just remember: Truth and kindness go hand in hand.

Pro tip: Don’t wait until a 90-day or annual review to flag team member issues. Show you’ve got their back by giving a quick redirect whenever they’re veering off track.

Correct in private.

Have you heard the saying, “Praise in public, correct in private”? That’s especially true in sensitive situations where a team member’s job is at risk. By having a hard conversation in a private, quiet setting, you protect their dignity—and that builds trust.

Pro tip: Have the team member restate to you what you’re asking them to change. That way, you can be sure you’re on  the same page and they understand your expectations.

Document repeated discussions and give a final warning.

The first time or two you talk with a team member about performance concerns, you probably won’t even know there’s a bad pattern developing. You’re just communicating early and openly to help them succeed. But if you’re course-correcting the same problems over and over, it’s time to formally document and date your conversations—especially your final warning.

Include the changes you require, by when, and what will happen if the conditions aren’t met. Have the team member sign it, acknowledging that they understand and agree to the conditions. Writing down your concerns, expectations and next course of action isn’t just a legality. It ensures the team member clearly grasps what’s happening.

Will you need to make uncomfortable eye contact during that final warning? Yes. Will you sweat a little more and have trouble breathing? Probably. But even in the discomfort, your message has to be clear and direct. Something like this: “For the next few minutes, this is going to be uncomfortable for me and you, but this has reached a serious point. I owe you clarity. I can’t keep you on our team if you don’t improve in these specific areas. [List the areas]. If these expectations aren’t met, your last day will be  [date].”

No matter what your feelings tell you, the kindest thing you can do is tell the truth. It’s up to your team member to choose what they’ll do with it.

3 Possible Outcomes for an Underperforming Employee

When you follow the guidelines outlined above, eventually your team member will realize you’re not going to back off the expectations you’ve laid out. With the writing on the wall, they’ll do one of three things:

  1. Improve their performance (which is always the goal).
  2. Leave on their own because the fit is wrong (which is second best and allows them to leave with dignity).
  3. Choose not to leave or get better (which means it’s time to let them go).

Can You Motivate an Underperforming Employee?

Is it possible for a team member’s performance to turn around? Absolutely. But keep in mind that they have to want to grow more than you want it for them. You can lead a horse to water, but you can’t make them drink from the high-performance trough.

What you can do is cast vision and lead with courage. In fact, as a business leader, you alone influence 70% of your team’s engagement at work.1 So if you’re wondering how to motivate an employee who is underperforming, start with these actions team members say matter most to them:

What’s Next: Do the Hard, Kind Thing

Uncomfortable conversations are called uncomfortable for a reason. But leaders lead—even when it’s uncomfortable. And when you talk with a team member about their performance, you show you’ve got their back—and spare everyone a lot of pain in the long run.

All great leaders need support as they mature through the stages of business. Check out the free EntreLeadership Stages of Business Assessment to find out which stage you’re in—Treadmill Operator, Pathfinder, Trailblazer, Peak Performer or Legacy Builder. Then you’ll know what to focus on most to lead even better and help your team and your business grow. Take the free Stages of Business Assessment now.

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Ramsey Solutions

About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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