HR Management: How to Identify and Manage Underperformance
HR Management: How to Identify and Manage Underperformance

HR Management: How to Identify and Manage Underperformance

In this manager’s guide, you’ll get insights on low performance and how to resolve it

We recognise that informing a member of staff that they are underperforming may be a daunting prospect. You might be one of the many managers who dislikes — even avoids — possible conflict at all times. You might not even know where to start. In this HR advisory manager’s guide, we aim to facilitate this process and assist you by addressing the following questions and concerns:

  1. What is underperformance?
  2. What are the possible causes of underperformance?
  3. Creating an informal action plan
  4. Developing a formal Performance Improvement Plan using SMART objectives
  5. What if there is still no improvement in performance?
  6. Sanction or dismissal protocol

1. What is underperformance?

Underperformance, or poor performance, is a failure to perform the duties of the role or to perform them to the standard required by the business. Employers sometimes confuse underperformance or poor performance with misconduct or poor conduct. Here are the key distinctions:

underperformance vs misconduct table

2. What are the possible causes of underperformance?

When considering how to manage people, it is important to first identify the underlying causes of underperformance. This will dictate whether you will take an informal or formal approach to performance management. Consider the following questions:

  • Have you made your expectations clear?
  • Has the employee had sufficient training to carry out the work requirement?
  • Is the workload too high?

There may be other possible causes of underperformance, such as:

  • The wrong person was hired for the job
  • There may be personal outside influences restricting the person from performing the role
  • There is ineffective or limited communication between the person and staff structure/people/colleagues/clients in order to perform the role effectively

Once you have considered the above, you can set out a plan for improvement.

3. Creating an informal action plan

ACAS (Arbitration, Conciliation and Advisory Service) is an independent government organisation devoted to preventing and resolving employment disputes. It takes into account UK employment law when offering advice and guidance. ACAS guidelines state that before considering formal action, you should be able to demonstrate that:

  • The employee is clear as to what is expected of them
  • You have pro­vided feed­back on their per­for­mance
  • The employee is clear about the gap be­tween their per­for­mance and the re­quired per­for­mance
  • You have an agreed plan out­lin­ing what im­prove­ments you ex­pect of them and by when, and the sup­port you have pro­vided to help them im­prove
  • The agreed ac­tion plan has been in place for long enough for the employee to demon­strate some im­prove­ment
  • You have been clear to the employee about what will hap­pen if their per­for­mance doesn’t im­prove
  • You have a clear audit trail of all of the above

4. Developing a formal Performance Improvement Plan using SMART objectives

You should develop a formal Performance Improvement Plan before considering disciplinary action. PlusHR’s HR Manager can help you create a plan. You should clearly explain to your employee that the consequence of not meeting the objectives set in the plan may be formal disciplinary action.

Here are the key components that go into such a plan. While creating it, keep in mind the same criteria you would use to create traditional SMART objectives:

SMART objectives chart

5. What if there is still no improvement in performance?

If there is still no improvement in performance, you may proceed to the formal stage of a disciplinary process, which involves:

  • Inviting the employee in writing to a formal disciplinary hearing, giving reasonable advance notice
  • Allowing the employee an opportunity to be accompanied
  • Clearly setting out the reason for the disciplinary hearing
  • Allowing the employee to provide their feedback and any evidence before you make a decision on the level of sanction
  • Setting out the sanction at the end of the meeting and following up in writing
  • Allowing the employee the right of appeal within five days of receiving the decision in writing

6. Sanction or dismissal protocol

We want it to be the last possible resort, but UK employment law recognises that small businesses may not be able to sustain an underperformer for a lengthy period of time. For this reason, the guidance above has taken this into account.

An employee with less than two years of continuous service (employed after 1 April 2012) is not eligible to bring an unfair dismissal claim to a court, with the exception of cases that include discrimination or breach of contract.

If you are looking for further help and advice, take a look at PlusHR’s handy infographic and video on how to manage poor performance. Our CIPD-qualified team is always here to help your business navigate the minefield of underperformance. Get in touch now by calling +44 020 3820 3045 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

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