Employee performance problems are common; an employee's performance will not always meet an employer's expectations. When issues arise, a manager should address them promptly and fairly to maintain a healthy workplace, protect productivity, employee morale, and overall business success, and comply with legal obligations.
A manager has several options to address an employee's poor performance. Depending on the circumstances, an employer may choose to resolve the issue using informal, non-corrective action measures, such as training or coaching. Performance issues related to a disability or medical need or external factors (such as financial or family concerns) may need to be addressed through a reasonable accommodation or by referring the employee to an Employee Assistance Program (EAP). More persistent or serious performance problems may require formal actions, such as a performance improvement plan (PIP) or termination.
Since every performance problem differs by employee and situation, a manager should follow the organization's internal policies when determining how best to address poor performance. The choice may also be affected by collective bargaining agreements and state and local laws. Regardless of the approach taken, the initial focus should be on understanding the root cause of the performance issue using fair, objective criteria. Failing to do so can expose an employer to discrimination, retaliation, or wrongful discharge claims.
The following steps provide a progressive approach to addressing poor performance. However, a manager may skip steps in sequence when circumstances warrant more immediate action.
Step 1: Recognize and Assess the Problem
When a manager notices an issue with an employee's performance, the first step is to identify the root cause so it can be properly addressed.
First, clearly define the performance issue. Identify the gap between expected and actual performance, determine how often the issue occurs, and assess its impact on productivity, team goals, and morale. Objective data—such as key performance indicators (KPIs), deadlines, and metrics—should be paired with qualitative observations and peer feedback. Review past evaluations to identify any patterns or changes that may explain the issue.
The manager should ensure the information collected is directly related to the employee's job role and the performance standards set for the employee. It is critical to avoid assumptions based on protected characteristics and to apply consistent standards that do not disproportionately affect protected classes. Missteps can create significant legal risk of discrimination or retaliation claims.
Keep detailed records at this stage and throughout the process of addressing a performance problem. Include notes on all information gathered, discussions, feedback provided, and agreements on next steps. This is crucial for organizational accountability and future reference.
Understanding the performance issues allows a manager to tailor solutions to the problem, support an employee who is struggling, and maintain or improve overall team productivity.
Step 2: Discuss the Issue with the Employee
Once a manager gathers enough information to make an initial assessment, they should meet with the employee to discuss the performance concern and understand what may be driving it. The meeting's purpose is to understand the employee's perspective and ensure they clearly understand the performance gap and its impact on productivity, team goals, and workplace standards.
The manager should:
- Ask open-ended questions to uncover obstacles the employee may be facing, such as unclear expectations, insufficient training, limited resources, shifting responsibilities, or other workplace dynamics. This approach promotes honest communication and supports a respectful, problem-solving environment.
- Describe what successful performance looks like and work with the employee to set achievable, specific objectives—potentially broken into manageable next steps. The conversation should identify any needed support, including training, coaching, workload adjustments, or help with prioritizing tasks.
- Clearly remind the employee of relevant policies, work rules, and performance standards. Feedback should focus on execution and outcomes, not on personal characteristics, and the manager should remain open to employee input.
The information gained from this meeting will enable the manager to make informed decisions and determine next steps that best address the performance problem while reinforcing fairness, accountability, and a supportive workplace culture.
Step 3: Take Informal Steps to Improve Performance
Using an informal approach with an underperforming employee can be appropriate and effective in some situations, particularly when the performance issue is not severe enough to warrant formal corrective action, the employee shows a willingness to improve, or personal circumstances affect performance. Informal approaches include:
- Training. Training can be an effective course of action when an employee's underperformance is related to a deficiency in skills essential to their role or is due to new tasks or responsibilities being added to their job. Consider the most effective delivery method for the training, such as workshops or online modules, and hold follow-up meetings to evaluate progress and monitor how the employee is using their new skills.
- Coaching. Coaching is ideal when performance issues require a tailored approach. Coaching focuses on improving how an employee works day-to-day by building judgment, confidence, and problem-solving skills through ongoing guidance. It differs from training, which focuses on teaching employees specific skills and knowledge. Through insightful questioning and feedback, a coach can help an employee explore different perspectives, discover their own solutions, and take ownership of their development.
- Flexible working arrangements. Flexible work arrangements can help address poor performance when personal or health issues affect an employee's work. Adjusted hours, remote days, or a compressed schedule can ease conflicts related to caregiving or medical needs. Flexibility can also give stressed or burned-out employees space to recover, and allowing someone with a long commute to shift start and end times can reduce fatigue and improve focus. A manager should provide clear expectations and guidelines for flexible work arrangements, including working hours, availability requirements, goals and objectives, and communication.
- EAP referral. An EAP referral may help when performance problems stem from significant personal or family pressures, mental health concerns, work-life balance struggles, or major life events (such as the death of a loved one or a divorce). An EAP offers confidential counseling and support that can help employees regain stability and refocus at work. A manager should raise the option with empathy and discretion to encourage—but not pressure—the employee to seek support they may need and to follow up appropriately.
- Reasonable accommodation. When an employee's performance issue relates to a disability or medical condition, a reasonable accommodation may be required under the Americans with Disabilities Act (ADA) or similar state laws. The manager and employee should work together in an interactive process to identify accommodations that enable them to perform their essential job functions. Continued monitoring is important to ensure the accommodation supports improved performance.
Sometimes, multiple informal measures will yield the best results in boosting an employee's performance or productivity. For example, an underperforming employee may benefit from a combination of one-on-one coaching and additional group training. Consider all options.
Step 4: Implement Formal Improvement Actions
If informal efforts have not improved an employee's performance, a manager may need to move to formal corrective action steps. When doing so, a manager needs to take a structured, transparent approach to ensure fairness and reduce the risk of discrimination claims.
The manager should first compile relevant documentation—performance reviews, prior conversations, and written follow-ups—to establish a clear record of the issues and earlier attempts to resolve them. Then the manager and employee should meet privately to focus on specific performance problems, the need for formal action, and the support available to help the employee meet expectations. Ensure the communication is clear, objective, and focuses on performance rather than personal attributes.
If the organization uses progressive corrective action, the manager should follow each of the steps in sequence, reassessing performance after each stage:
- First Warning: Explain and document performance expectations, actions the employee needs to take, and the consequences of failing to meet expectations.
- Second Warning: Repeat the process, adding deadlines for achieving the required performance.
- Last Warning: This document repeats the previous expectations with updated deadlines but also advises the employee that it represents their final chance to improve before termination.
Before issuing a final warning, a manager may choose to implement a performance improvement plan (PIP). A PIP outlines concrete actions, timelines, and milestones to guide improvement. Because employees sometimes assume that a PIP is a precursor to termination, it's important for the manager to emphasize that its purpose is to help the employee succeed and to remind them of the resources available to support their progress.
Step 5: Determine Whether Termination Is Required
If, despite sustained efforts, an employee still fails to meet performance standards, termination may be necessary. Because it is a last resort, the manager should first be sure they have taken all reasonable steps. However, some serious performance issues—such as illegal or unsafe conduct—may require immediate action rather than progressive steps. In limited situations, a manager may consider alternatives such as reassignment, administrative leave, suspension, or demotion.
Before finalizing a termination decision, the manager and a higher-level manager or HR representative should review the full record of actions taken. You can reach out to your FrankAdvice HR Consultant for guidance, and you can also consult with legal counsel.
Once the decision is confirmed, the manager should hold a private meeting with the employee to communicate the termination. The explanation should rely on documented performance issues, avoiding personal opinions or criticisms. Allow the employee time to process the information and be prepared to answer any questions honestly and respectfully. The employee should then be provided with information about their final pay, benefits, the return of company property, and any severance or outplacement services being offered (if appropriate). Throughout the meeting, the manager should remain professional, empathetic, and focused on maintaining the employee's dignity.