Date posted: 01/12/2023 8 min read

Managing poor performance

Poor performers bring productivity down, so how can you help improve someone’s performance before it’s too late?

Quick take

  • Low engagement in workplaces costs the global economy US$8.8 trillion and accounts for 9% of global GDP.
  • There are many reasons why someone may be performing poorly. It is usually not because they can’t do the job.
  • Performance-related conversations should be documented in case further steps need to be taken down the track. At the same time, improvements should be acknowledged and rewarded.

The term ‘quiet quitting’ emerged in recent years as a way to describe employees who are simply not engaged. Now, the phrase ‘loud quitters’ has also made an appearance, distinguished by their active disengagement at work. Between these two types of quitters, more than half of all employees report being relatively unproductive at work, according to research from McKinsey.

Gallup’s State of the Global Workplace: 2023 Report estimates both types of low engagement cost the global economy US$8.8 trillion and account for 9% of global GDP. It’s a compelling argument for employers to address the reasons people might underperform at work or choose to put in the bare minimum required.

The research findings also indicate that a rising proportion of the workforce is experiencing disengagement and resentment because their needs are not being met. This could be if a business is not providing flexible working arrangements, or because of dissatisfaction due to low pay and extended working hours, or employees may have lost confidence in their employers.

Whatever the reason, there are some steps managers take that can help bring employees back to capacity and head off a potentially time-consuming, expensive and frustrating process to end their employment, as well as further costs associated with replacing them.

Red flags

When problems start appearing – from missed deadlines and mistakes, to complaints from other team members or stakeholders – it’s time for a conversation, says Anna Marshall, director at leadership development consultancy, People Mastery.

“In my experience, nine out of 10 times the reason for poor performance is inappropriate behaviour in the workplace. It’s pretty unusual to see someone underperforming because technically they can’t deliver,” she says.

“It is more often the case that the person is not getting along well with others or acting out of alignment with company values and, as a result, disengaging from their work. I’d call that presenteeism – their body is there, but their mind is somewhere else.”

The best thing to do is address the inappropriate behaviour immediately, Marshall says.

“Start conversations by asking the person about their challenges and being supportive in finding solutions. If you make someone feel seen and understood, the likelihood of achieving a positive turnaround in performance is significantly enhanced,” she says.

“If you make someone feel seen and understood, the likelihood of achieving a positive turnaround in performance is significantly enhanced.”
Anna Marshall, People Mastery

It is a similar story for HR specialist Emily Jaksch, director at HR Gurus. When she meets clients who come to her with performance issues, she knows she is usually coming in long after the problem has manifested. The call for help comes well down the track, when managing the situation has become frustrating and stressful, she says.

“People avoid having difficult conversations. They don’t want to tell someone they are not performing but it’s the worst thing you can do, and I see this all the time, they save it up and then try and address it six months down the track,” says Jaksch.

“My advice is that every time somebody does something that is not acceptable, you need to have a discussion with them to find out why it is happening and work out ways
to address it.”

Set clear expectations

Often, people are perceived as poor performers because they are not delivering what their manager wants. The problem is, says Marshall, if you don’t make it clear what your expectations are then that person is bound to fail.

“They can’t deliver something if they don’t know what they are expected to do. Defining a role and explaining how the outcomes will be measured are preventative strategies that leaders put in place at the beginning of someone’s tenure that prevent a lot of problems occurring. I think many of the problems with performance are simply lack of clarity,” she says.

Documenting performance issues is also critical, but it doesn’t help matters to wait until things are dire and then try and have a conversation with a reluctant and disengaged employee, says Jaksch.

“It’s really unfair for a manager to save up six months of performance feedback and then dump it on someone and expect a really good result. You need to start working with them and help them overcome whatever the challenges are that are affecting their work,” she says.

That can include asking questions in an informal way, before taking steps to enter a performance plan. More often than not, there will be a reason why an employee who has historically been a good performer is suddenly demonstrating a decline in their performance, says Jaksch.

“Have a constructive conversation to say, ‘I’ve noticed that this happened. Do you need any support? How can I help you? What did you learn from that situation?’ It’s about having that courageous conversation with someone to say, ‘We all make mistakes, but let’s just have a chat about it’,” Jaksch says.

Managing poor performanceImage credit: Piranka

And if that doesn’t work?

The next step is performance management, before taking a drastic step and terminating someone’s employment, she says.

“You need to document all of the things that you’ve done for them up until that point, and then you’d have a sit down with them to say, ‘This has now escalated to a point where we need to help you understand how serious this is’.

“I would then recommend putting them on a performance improvement plan, which would have a very structured way of explaining all of the expectations that you have of them and all the areas where they’re not performing, and then you would work with them over a certain period to try and get them on track,” Jaksch says.

What the law says

Whether or not you can fire someone for poor performance depends on various factors, including the particular laws and regulations in different jurisdictions, as well as the employment contract or agreement in place.

Employment laws in New Zealand and Australia require specific steps to be taken before a person’s employment can be terminated because of performance issues.

“When terminating an employee’s employment, an employer needs to follow a fair process and have good substantive reason for the decision,” says Pele Walker, national manager of dispute resolution at New Zealand’s Ministry of Business, Innovation and Employment.

Those fair processes include following any procedures set out in the employment agreement, informing the employee of concerns about performance, providing support and training to address the concerns, undertaking a performance plan; and detailing expectations and potential outcomes if performance is not improved.

“Depending on the nature of the performance concerns the employer might consider warnings or, if the performance has undermined trust and confidence, the employer could consider termination. It’s important to give the employee the opportunity to have a support person present and to have time to consider their response,” says Walker.

In Australia, issues with employee performance are a challenge that almost every business is going to face at some stage, says Ashleigh Mills, special counsel at Holding Redlich. You can deploy various strategies to reduce the risk of ending up in a messy termination process.

“There are a number of misconceptions about how an employer can manage instances of poor performance and how they’re able to move through to termination, if that is required,” says Mills. “One of those misconceptions is that an employer can dismiss an employee simply because their contract of employment states that they are able to terminate for any reason on the provision of a specified period of notice.”

Instead, the employment relationship in Australia is regulated not only by the terms of an employee’s written employment contract or other industrial instrument, but also by various statutory schemes that are primarily provided for in the Fair Work Act 2009, Mills says.

“What this means in practical terms, is that just because a contract of employment may give an employer the ability to dismiss on the provision of notice, the employer is still required to take steps to ensure that the dismissal is not unfair and also that the reason or reasons for the dismissal do not include a reason that’s unlawful.”

Mills advises that regular and open communication with employees from the commencement of their employment is key to developing and maintaining a satisfactory level of performance.

“Communicating often and communicating early, as well as clearly documenting any performance concern that has been identified, are critical as taking these steps will best assist businesses to develop an objective basis for taking action to manage an employee’s performance at work,” she says.

“Be clear on what the requirements of the particular position are, including by way of a position description. Set structures around review processes on a regular basis to communicate with your employees and provide feedback on their performance,” she says.

Employers should also be aware that while poor performance may be a valid reason for dismissal where a proper process has been followed, they need to be able to show that there is not also another reason for their decision to dismiss that could be unlawful. For example, that the employee has carer’s responsibilities or a physical or mental disability.

“If an employee isn’t performing particularly well, but at the same time they have an attribute that the law designates to be a ‘protected attribute’, it is important to be very clear on the true reason for dismissal and ensure that this is able to be substantiated, including in documentation relating to the decision,” Mills says.

How to recognise improved performance

Both employers and employees benefit if a team member addresses their poor performance successfully. According to founder of HR Gurus, Emily Jaksch, acknowledging and rewarding improvements is critical for the employee in question, as well as the broader team. Here’s how to do it.

  • Regular and ongoing feedback is key to improving performance. If someone turns things around, give them praise using the following structure: what they did well specifically, why it is so important and what impact it made on the company or client. Be generous. Script what you intend to say if you feel uncomfortable.
  • Publicly recognise the employee to reinforce to them what you want them to continue doing. This will also give insights to the team about what they need to do. What gets rewarded gets repeated. Use language like: ‘I would like to acknowledge Katie for her persistence in developing her client intake skills. She has worked really hard to get the process right, be detail-focused and follow through with all the questions’.
  • Find out what motivates the individual and design a bonus around their preferences. A one-size-fits-all approach to rewards does not work! Do they like words of encouragement, personal time, or gifts?
  • Send the employee an email thanking them for their performance improvement. Explain specifically the refinements you are thankful for and why you are excited about their change for the better.

Take away

The Manager’s Handbook

'The Manager’s Handbook: Five Simple Steps to Build a Team, Stay Focused, Make Better Decisions, and Crush Your Competition' is a practical guide enabling managers to improve their ability to lead people.

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