How to manage poor-performing employees

Employees who don’t fufill the requirements of their job can place a strain on any business. The effect is particularly acute in small businesses, where each person’s relative contribution, or lack thereof, is amplified.

This blog outlines the steps to follow to address performance problems – even before they start. It also provides guidance on what to do if you find – after a sustained effort to improve performance – nothing is working.

How successfully you manage your staff, and their performance ups and downs, largely comes down to the strength of your relationships with them.

Building close, positive working relationships requires regular, effective communication. On a practical level, an ideal way to ensure this happens is by scheduling weekly one-to-one meetings to catch up with each of your team members.

These meetings allow you to reflect on the past week’s work, talk about what went well and not so well, and focus on how your employee can be set up for success in the coming week. Checking performance against concrete goals (more on these below) from time-to-time (e.g. monthly) in these meetings is worthwhile, too.

Weekly catch ups are also a chance to reward and encourage the employee, or to provide support if their performance isn’t where you want it to be.

They go a long way towards ensuring you avoid a situation where staff performance dips so much, for so long, you are forced to take formal action.

Of course, checking with staff about how they are going needn’t just happen in the weekly catch up. Less formal conversations can take place at many other times. For example, when you say ‘hello’ on your arrival in the morning; when you ask ‘how are you?’ in the corridor; and when you’re having other meetings with them.

All this communication not only gives you an up to date picture of how your employee is faring, it shows you care about them as well. And by helping build a strong bond with them, it makes any tricky conversations about under performance a lot less daunting.

It goes without saying that, for your employees to understand what they are expected to do every day, they need clear individual goals. A good way to define them is by using the SMART (Specific, Measurable, Achievable, Realistic, Timely) format. For example, “Johnny will reply within 48 hours to all queries received by him.”

Try to link these goals to your organisational goals, so your people feel connected to your business’s purpose and can see how they help to fulfill it. We’ve found this to be genuinely motivating to our employees.

Individual goals should be linked to key performance indicators (KPIs), which can cover a host of things – such as amount of work done or quality of output – depending on what your business does. For Johnny, a KPI would be his response times.

Such quantitative analysis is really helpful because it provides a rich source of data for understanding how people in the organisation are working. But it’s best to assess your staff’s performance using a mix of quantitative and qualitative measures.

A helpful way of setting up qualitative measurement is to refer to your business values (or define them, if you haven’t already), and figure out what behaviours reflect them. For example, a high-growth business might put strong emphasis on staff winning new customers through excellent people management.

Clearly list these behaviours in the same goal-setting document as your quantitative measures. When they are exhibited by your employee – as noticed by you, their colleagues, customers or even suppliers – you can recognise that person.

(On goal setting in general, I recommend The Ideal Team Player, by Patrick Lencioni as a great source of inspiration.)

If you see an employee starting to struggle in their job, ask yourself ‘how long has this person been doing these tasks?’ This will help you figure out if they have had the appropriate training for their role.

Maybe the person is juggling the equivalent of two roles, and isn’t as well versed in one of them. Or maybe the employee has missed out on key training days.

If lack of knowledge or skills isn’t the issue, then maybe a personal reason is behind the dip in performance.

In any case, before making any conclusions about what is causing the poor performance, you should ask the individual.

Listen to what they say and make an effort to understand where they are coming from.  Once you have the full picture it becomes easier to decide which steps to take next.

How long should you wait before saying something? The general principle is the sooner the better – but it does depend on the situation.

If the dip in performance is gradual and not yet serious, then use your weekly catch up to talk about it.

• Be positive and supportive and explain what you have noticed.
• Be clear about what has gone wrong, so they know what is acceptable now and expected in the future.
• Ask what you can do to help your employee to be the best they can be.
• Ensure that you follow through with whatever support you agreed to give them.

If, however, the behaviour is of immediate concern – such as a team member yelling at someone in a meeting – then asking for a catch up straight afterwards would be appropriate.

Give your employee a reasonable opportunity to improve work performance. Check that:

• You have been clear with what the team member is required to do (i.e. given them SMART goals and KPIs)
• You have had ongoing conversations about their performance (over a minimum of two months with no improvement)
• They have had the support to do the job they are required to do

Keep a record of all of the above, too, in case you need to show how you handled things at a later date. For example, you should file all your email correspondence.

If there is no improvement over this time, the next step is to introduce a Performance Management Plan.

This is a supportive document that shows clearly what the expectations are, what the team member needs to have completed, and by when, and how this will be measured.

Some helpful tools and templates for performance management plans can be found on business.govt.nz.

If you believe that there is nothing more you could do to help lift an employee’s performance, and you have been through the Performance Management Plan process, then you need to invite them to a formal meeting. Encourage them to bring along a representative, such as a lawyer or trusted friend.

At the meeting, clearly state your concerns and then listen carefully to their responses so you can further understand what is going on. Document the conversation so you both have a clear record of the event.

Hopefully this meeting will enable you both to find a solution to the problem.

At this stage, I would strongly urge you to get some expert advice from an employment lawyer. They will take you through the next steps.

Crucially, you need to be able to show through documentation that you have done everything you reasonably could to support that team member to be effective in their role.

You also need to show you have no confidence in your team member’s ability or willingness to improve.

Firing an employee is almost never the best option. We all want the people we hire to have long and meaningful careers within our businesses. The reality, however, is that it’s sometimes necessary. I hope this article helps you to avoid reaching this stage with any of your employees.