Leading a team can bring a lot of joy to managers. Seeing your team members grow in their roles, achieve goals and work collaboratively is both rewarding and motivating. However, from time to time, team members might show signs of underperformance. As a manager, it is important to intervene quickly to get your direct report back on track with performance management.

This article sets out the four key steps for performance management, including how to:

  • identify signs of underperformance;
  • put a plan in place to improve performance; and 
  • take reasonable disciplinary action should your team member fail to turn things around.

1. Identify Signs of Underperformance

Identify the Performance Issue

The first step of managing underperformance is to identify the actual issue. Whether it is:

  • making mistakes;
  • missing deadlines; or 
  • arriving late to work;

underperformance can take many forms. You might see the issue first hand, or someone else may bring it to your attention. Take some time to understand more about the issue before discussing it with your direct report. 

For example, if another manager tells you that your direct report produced a poorly written report for them, ask to see the report and have the other manager talk you through the issues. Determine how complex the task was, and how the final product differed to what you expected.

Provide Feedback

Once you have the information you need, arrange a time to speak with your direct report about the issue. When sharing your feedback:

  • start with the facts;
  • explain the impact of their actions or behaviour; then 
  • articulate the way forward. 

Back to the example of the poorly written report, you should inform your direct report that their work was not up to scratch as it included a lot of spelling and grammatical errors. Then explain that the other manager had to spend two hours editing the report before it was able to be sent to the client. Finally, let your direct report know that they need to improve their attention to detail moving forward.

2. Implement a Performance Improvement Plan

Often providing effective feedback to your direct reports will get them back on track, but that is not always the case. Ongoing underperformance needs to be addressed, and quickly. This is where proper performance management can aid your efforts.

Informal Performance Improvement Plan

If your direct report continues to show signs of underperformance, you should consider implementing an informal performance improvement plan. This involves meeting with your direct report again to share your concerns, and explaining that you are going to put a plan in place to help them improve their performance. 

The plan should clearly outline in writing:

  • what the issues are;
  • the actions that they need to take to improve their performance; and 
  • the timeframe for improvement. 

Involve your direct report in creating the plan, as this will make them feel more involved and supported in the process. You need to inform your direct report that if their performance does not improve within the required timeframe, you may have to move to a formal performance management process.

Formal Performance Improvement Plan

If your direct report does not improve their performance by the conclusion of their informal performance improvement plan, you will need to implement a formal performance improvement plan. The main difference between an informal and formal performance improvement plan is the consequences: 

  • informal performance improvement plans do not lead to disciplinary action if the employee does not improve their performance to the required level; while 
  • formal performance improvement plans may result in disciplinary action, such as an extension of the plan, issuing formal warnings, or ultimately, termination of employment.

Commencing a formal performance improvement plan requires a formal meeting. Forewarn your direct report about the meeting and what you intend to discuss. This will allow your direct report to come prepared, and allows them to identify a support person, should they wish to bring one.

If you have a Human Resources team in your business, it is a good idea to involve them in this meeting as a witness and notetaker.

In the meeting:

  • clearly state the issues, and provide examples;
  • offer your direct report the opportunity to respond before launching into next steps;
  • explain that you will be introducing a formal performance improvement plan to assist your direct report to meet the expectations of their role; and 
  • make clear that if their performance does not improve to the required level by the end of the allocated timeframe, you may take disciplinary action.

Like with the informal plan, work with your direct report to create their formal performance improvement plan. Their ‘buy in’ is important, and will increase the chances of them taking the plan seriously. Agree on how often you will meet to review their progress, and diarise the meetings accordingly. The more regular the meetings, the better.

3. Monitor Performance

Formal performance improvement plans are not ‘set and forget’ processes. It is important that you are:

  • diligent about providing regular feedback to your direct report; and 
  • ensure your review meetings take place as originally planned. 

As a manager, it is critical that you have evidence, such as calendar invites, meeting notes and the performance improvement plan itself. These show that you provided feedback and support to your direct report and gave them ample opportunity to improve their performance and meet the role’s expectations.

At the end of the performance improvement plan timeframe, arrange a formal meeting to review your direct report’s overall performance. If you have provided regular feedback to your direct report throughout the plan timeframe, there should be no surprises in this meeting.

Your direct report might improved their performance to the required level. In this case, this achievement and congratulate them on turning things around. If your direct report is showing signs of improvement, but there are still issues, or if they have shown little to no improvement, then disciplinary action may be appropriate.

4. Disciplinary Action

Disciplinary action should be commensurate with the level of underperformance your direct report is exhibiting. 

For example, if your direct report has shown signs of improvement, but is not quite at the level you need them to be, it could be deemed unreasonable to terminate their employment without giving them another opportunity to improve. 

In such circumstances, a fairer and less risky course of action would be to issue a written warning to your employee, and extend their performance improvement plan for a further period. On the other hand, if your direct report has had ample opportunity to improve through formal performance improvement plans and they are simply not making progress, terminating their employment on the basis of underperformance could be considered fair and reasonable.

Deciding to terminate a person’s employment should not be taken lightly. There is a lot of risk and employers can get themselves into trouble if you do not take the right steps to ensure a fair, just and reasonable process. 

It is worth seeking legal advice when considering terminating an employee to ensure:

  • you have covered all your bases; and 
  • are clear on what entitlements will be owed to your direct report if you dismiss them.

Key Takeaways

If an employee is underperforming, it is in everybody’s interest to see this turnaround. This can be achieved with diligent performance management. Start by identifying the performance issues and communicating these, along with examples, to the employee. Then put in place a performance improvement plan and monitor the direct report’s progress. If ultimately performance does not improve, you will need to consider terminating your direct report’s employment. It is worth seeking legal advice before doing so. If you need assistance with employment-related issues, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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