How HR Handles Underperforming Employees: Effective Action Plan

What is Underperformance?

First, let's start by understanding what underperformance really is.

As an HR professional or a business owner, it's crucial that you're well-versed in the concept of underperformance to navigate how HR handles underperforming employees effectively.

Here's a quick summary of what underperformance might look like:

Regularly missing deadlines - Delaying tasks and meetings or constantly lagging behind the team.
Producing subpar quality of work - The employee's work is often error-prone or lacking in quality.
Demonstrating a negative attitude - Consistently showing a lack of motivation or negativity towards work or colleagues.
Not reaching target goals - Failing to meet specific objectives and targets set for the role or team.

What Causes Employee Underperformance?

Understanding the root of underperformance is key to figuring out how HR handles underperforming employees.

This issue, usually multifaceted, can come from both internal and external influences at work.

Let’s take a look:

1. Common Internal Factors Leading to Underperformance

Several internal factors directly linked to the workplace can lead to employees not performing their best. Some of these may include:

🔺 Lack of skills or inadequate training: If an employee is not properly trained or lacks the necessary skills to do their job, it can significantly hamper their performance. Continuous investment in skills training can be a solution to this problem.

🔺 Vague job expectations: If the job requirements or expectations aren't clearly defined, it's easy for employees to underperform. Clear, concise, and communicable job descriptions and standards can help tackle this issue.

🔺 Mismatched roles and responsibilities: When an employee's skills and interests don't match their assigned tasks, it could lead to underperformance. Regular check-ins to reassess job roles can be beneficial here.

Bonus: Using an internal chatbots to facilitate better internal communication among your employees.

2. External Factors That May Contribute to Underperformance

Underperformance is not always due to internal mismatches or inadequacies, external factors can also play a role:

🔺 Personal issues and health challenges: Events in one's personal life or health issues can impact an employee's performance.

🔺 Work-life balance and burnout: Excessive workload can lead to burnout, which in turn causes underperformance. Make sure to create a culture that promotes work-life balance.

🔺 Poor management and workspace environment: Unhealthy working conditions, bullying, or poor management can cause stress and lead to decreased productivity.

Bonus: Your company culture has a great impact on the performance of your employees. Therefore, a solid company culture is ensured. You can learn more with: How Company Culture Affects Employees

10 Actionable Tips for Handles Underperforming Employees

Step 1: Recognize and Acknowledge the Problem

The first step is to recognize and acknowledge the problem to handle underperforming employees effectively. Here's how you can do that:

Stay vigilant: Regularly monitor employee performance to spot any declines early.
Act promptly: Once you notice underperformance, don’t ignore it—address it immediately to prevent further issues.
Acknowledge internally: Accept that there is a problem that needs to be addressed and prepare to take action.
Set the stage: By recognizing and acknowledging the issue, you create a foundation for a constructive solution that benefits both the employee and the organization.

Bonus: By mapping the employee journey, you can observe where the employee is experiencing problems or decreased performance.

Step 2: Conduct a Private, One-on-One Meeting

After recognizing and acknowledging the underperformance, the next crucial step is to conduct a private, one-on-one meeting with the employee.

A man and woman engage in a one-on-one meeting at a table, discussing strategies for improving employee performance.

Here’s how to approach this step effectively:

Choose a neutral setting: Ensure the meeting takes place in a quiet, private space where you can have an open and honest conversation without interruptions.
Be clear and direct: Start the meeting by clearly stating the purpose and addressing the observed underperformance. Avoid ambiguity to ensure the employee understands the gravity of the situation.
Listen actively: Encourage the employee to share their perspective. Understanding their point of view can provide valuable insights into the root causes of their underperformance.

This step is about addressing the problem and showing your support and willingness to help the employee improve.

How HR Assistant AI Can Help

HR Assistant AI can play a significant role in facilitating these meetings by providing structured guidance and resources. Here's how:

Pre-meeting preparation: HR Assistant AI can help you prepare for the meeting by offering templates for discussion points and reminders about key issues to address.
Documenting the conversation: During the meeting, HR Assistant AI can assist in taking notes and documenting key points discussed, ensuring that everything is recorded accurately.
Follow-up actions: After the meeting, HR Assistant AI can generate a summary of the discussion and suggest next steps, helping you stay organized and on track with the action plan.

Step 3: Reiterate and Clarify Job Expectations

This step ensures that both you and the employee have a mutual understanding of what is expected in their role, which is essential for setting a clear path toward improvement.

Here’s how to effectively handle this step:

Review the original job description: Begin by revisiting the employee’s job description and the specific responsibilities outlined when they were hired. This serves as a baseline for the conversation.
Clarify performance standards: Clearly articulate the performance standards and benchmarks the employee is expected to meet. Be specific about what success looks like in their role.
Address any misunderstandings: Ask the employee if they have any questions or if there were aspects of the job they found unclear. Address any misunderstandings immediately to avoid future confusion.
Set realistic goals: Collaboratively set achievable goals that the employee can work toward. These should be specific, measurable, and time-bound to help track progress.

Step 4: Develop a Collaborative Action Plan

Once job expectations have been reiterated and clarified, developing a collaborative action plan is next. This step is essential for setting a clear and structured path to improvement that both you and the employee agree on.

Here’s how to approach this step:

Engage the employee: Involve the employee in creating the action plan. Ask for their input on what they think could help them improve and what support they need from you.
Set specific objectives: Clearly define the objectives that the employee needs to achieve. These should be directly tied to the areas where they have been underperforming.
Outline actionable steps: Break down each objective into smaller, actionable steps that the employee can take. This makes the process less overwhelming and easier to manage.
Establish timelines: Assign realistic deadlines to each step of the action plan. Timelines help keep both you and the employee accountable and provide a sense of urgency to the improvement process.
Agree on check-ins: Schedule regular check-ins to review progress and make adjustments to the plan if necessary. These check-ins ensure that the employee stays on track and that any issues are addressed promptly.

Step 5: Provide Continuous Support and Resources

This step ensures that the employee has everything they need to succeed and demonstrates your commitment to their development.

Here’s how you can effectively provide support:

Offer training opportunities: Identify any skill gaps that might be contributing to the employee’s underperformance and provide training or coaching to help them improve.
Assign a mentor or coach: Pair the employee with a more experienced colleague or a coach who can offer guidance, share knowledge, and provide regular feedback.
Ensure access to resources: Make sure the employee has access to the tools, materials, and information they need to meet the goals outlined in the action plan.
Be available: Let the employee know that you are available for any questions or concerns they might have as they work through the action plan. Regular check-ins can also help in addressing issues as they arise.
Encourage open communication: Foster an environment where the employee feels comfortable reaching out for help or discussing challenges they’re facing. Open communication is key to their progress.

Step 6: Offer Constructive Feedback Regularly

This step is vital for keeping the employee motivated and on track, as well as for making any necessary adjustments to their improvement plan.

Here’s how to provide effective feedback:

Be timely: Provide feedback as soon as possible after observing the employee's performance. Timely feedback helps reinforce positive behaviors and quickly corrects any issues.
Focus on specifics: When giving feedback, be specific about what the employee is doing well and what needs improvement. Avoid general comments and instead highlight particular actions or outcomes.
Balance positive and constructive feedback: Start by acknowledging the employee’s progress and achievements before addressing areas that need improvement. This balance helps maintain their confidence and motivation.
Use a supportive tone: Frame your feedback in a way that encourages growth rather than criticism. For example, instead of saying, “You’re not meeting expectations,” you could say, “I’ve noticed you’re facing challenges in this area—let’s work together on how to improve.”
Encourage two-way communication: Invite the employee to share their thoughts on the feedback. This can lead to a more open dialogue and may reveal insights into challenges they’re facing or areas where they need additional support.

Step 7: Recognize and Reward Improvement

As the employee begins to make progress, it’s important to recognize and reward improvement. This step not only reinforces positive behavior but also motivates the employee to continue striving for excellence.

A man and woman proudly display a certificate in front of a computer, symbolizing recognition and reward for employee improvement.

Here’s how to approach this step:

Acknowledge progress publicly and privately: Let the employee know that their efforts have not gone unnoticed. You can recognize their improvement during team meetings or through a private conversation, depending on what the employee would appreciate more.
Provide tangible rewards: Consider offering rewards that go beyond verbal recognition. These could include bonuses, additional time off, or other incentives that are meaningful to the employee.
Highlight specific achievements: When recognizing improvement, be specific about what the employee has done well. This reinforces the behaviors and actions that you want to see continued.
Encourage further development: Use this opportunity to discuss the employee’s future goals and how they can continue to grow within the organization. Encouraging further development shows that you are invested in their long-term success.
Maintain momentum: Keep the positive momentum going by setting new challenges or goals that the employee can work towards. This ensures that they remain engaged and continue to improve.

Step 8: Address Persistent Underperformance

If an employee’s underperformance persists despite your efforts, it’s crucial to take decisive action:

Reassess and document: Review the steps taken so far and ensure everything is documented, including feedback and support provided.
Hold a formal meeting: Clearly communicate the ongoing issues and the seriousness of the situation.
Consider alternatives: Explore options like reassignment or adjusting the employee’s role.
Outline consequences: Make the potential outcomes of continued underperformance clear, such as further disciplinary actions or termination.

Step 9: Foster a Healthy Work-Life Balance

Encouraging a healthy work-life balance is crucial for both employee well-being and overall performance. When employees feel balanced and supported, they are more likely to perform at their best and remain engaged.

Here’s how to foster this balance:

Promote flexibility: Offer flexible work hours or remote work options to help employees manage their personal and professional responsibilities.
Encourage time off: Ensure that employees take their full vacation days and discourage working during off-hours.
Support mental health: Provide resources such as counseling services, wellness programs, or mental health days to support employees’ well-being.
Model balance: Lead by example by maintaining your own work-life balance, which sets a positive standard for the team.

Step 10: Document the Entire Process

The final step in managing underperformance is to document the entire process. Proper documentation ensures transparency, accountability, and legal protection.

Here’s how to approach it:

Record every step: Document all meetings, feedback sessions, and action plans.
Be specific: Include detailed information such as dates, times, and key discussion points.
Maintain confidentiality: Store all records securely and ensure they are accessible only to relevant parties.
Use as a reference: Documentation serves as a valuable reference for tracking progress and making informed decisions.

How HR Assistant AI Can Help

HR Assistant AI simplifies the documentation process by automatically capturing and organizing all relevant information. Here’s how it can assist:

Automated record-keeping: HR Assistant AI can document meetings, feedback, and action plans automatically, ensuring accuracy and completeness.
Confidential storage: The AI provides secure storage for all documents, accessible only to authorized personnel.
Quick retrieval: Easily access and review documentation when needed, saving time and ensuring consistency in your approach.

The Impact of Underperforming Employees on Organizations

Underperforming employees can have a significant ripple effect on your organization, and as an HR professional or business owner, it is crucial to understand the breadth of this impact.

1. Decreased Productivity

When an employee is underperforming, their work output often slows down, causing delays in project timelines and reducing overall team productivity.

2. Lowered Employee Morale

High-performing employees can become demotivated if they perceive that their hard work is being undermined by a colleague's underperformance.

3. Financial Losses

Underperforming employees can directly impact your bottom line. Missed deadlines, errors in work, and decreased efficiency can lead to financial losses, whether through lost revenue, increased operational costs, or the need to invest additional resources to correct mistakes.

4. Damage to Company Reputation

Your employees are often the face of your business, especially in client-facing roles. When an employee underperforms, it can negatively affect customer satisfaction and, in turn, damage your company’s reputation.

5. Increased Workload for HR

HR professionals must invest time and effort in addressing the issue, which includes documenting performance, conducting meetings, developing action plans, and potentially managing the termination process.

6. Impact on Team Dynamics

Underperformance can disrupt the balance within your team. When one person isn’t pulling their weight, it can lead to resentment and conflict among colleagues.

7. Legal and Compliance Risks

Failing to properly manage underperforming employees can expose your organization to legal and compliance risks. If an employee feels unfairly treated or if proper procedures aren’t followed during disciplinary actions or terminations, your company could face legal challenges.

Wrapping Up

Effectively managing underperforming employees is a multi-step process requiring proactive problem recognition, open communication, and mutual understanding. As revealed in our step by step guide, the strategy doesn't conclude with short-term improvement but also involves bolstering long-term performance.

A constructive, solution-oriented approach, accompanied by adequate support and resources, paves the way for employee development and overall organizational growth.

Frequently Asked Questions

How do HR evaluate employee performance?

Set Clear Goals: Ensure employees have specific, measurable goals that align with company objectives.
Monitor Progress: Regularly check in on progress and provide immediate feedback.
Conduct Appraisals: Use formal performance reviews (annually or bi-annually) to assess performance against goals.
Utilize 360-Degree Feedback: Collect feedback from multiple sources (peers, supervisors) for a well-rounded view.
Document Everything: Keep records of evaluations, feedback, and any action plans.
Develop Action Plans: Create improvement or development plans based on evaluation results.
Reward Achievement: Recognize and reward employees who meet or exceed expectations with bonuses, promotions, or other incentives.

What are the 5 stages of performance management?

Planning: Set SMART goals with clear expectations.
Monitoring: Track progress and provide ongoing feedback.
Development: Identify skill gaps and offer training or coaching.
Reviewing: Conduct formal evaluations to assess performance.
Rewarding: Recognize achievements with appropriate rewards to reinforce positive behavior.

What is the difference between temporary lapses and chronic underperformance?

Temporary Lapses: Short-term dips in performance often due to external factors. Address with immediate support like flexible work arrangements or a discussion to identify quick fixes.
Chronic Underperformance: Ongoing, consistent failure to meet standards. Requires a structured response, such as implementing a Performance Improvement Plan (PIP), offering targeted training, or considering reassignment or termination if no improvement is seen.

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