Employee performance is one of the biggest drivers of organizational success. However, not every employee meets expectations at all times. Underperformance can happen due to skill gaps, lack of motivation, unclear goals, or personal challenges. As a manager, handling underperforming employees effectively is not just about addressing the problem—it’s about guiding them toward improvement while maintaining team morale.

This guide will help managers understand the causes of underperformance and provide practical strategies to manage and support employees in becoming more productive.

Understanding the Causes of Underperformance

Before addressing the issue, it’s crucial to identify the root cause of an employee’s underperformance. Common reasons include:

• Unclear expectations – Employees may not fully understand their role or responsibilities.

• Lack of skills or training – Sometimes, employees struggle because they do not have the right tools or knowledge.

• Low motivation or engagement – Personal dissatisfaction, burnout, or lack of recognition can affect productivity.

• Personal issues – Family, health, or financial problems may influence workplace performance.

• Poor communication – Misalignment between managers and employees often results in incomplete or incorrect tasks.

By diagnosing the problem correctly, managers can tailor solutions instead of relying on a one-size-fits-all approach.

Open and Honest Communication

The first step in managing underperformance is having a transparent conversation. Schedule a private meeting and discuss your concerns without sounding accusatory. Use specific examples instead of generalizations. For example, instead of saying “You’re not committed,” say “I noticed the last two project deadlines were missed.”

Encourage the employee to share their perspective. Active listening not only builds trust but also reveals whether the issue is skill-based, motivational, or personal.

Set Clear Goals and Expectations

Employees often fail when expectations are vague. To resolve this, managers should:

• Define specific, measurable, achievable, relevant, and time-bound (SMART) goals.

• Outline what success looks like for the employee.

• Provide written instructions or checklists for clarity.

For instance, if an employee struggles with deadlines, instead of asking them to “work faster,” give them a structured timeline with milestone checkpoints.

Provide Training and Development

Skill gaps are a leading cause of underperformance. Offering training opportunities, workshops, or mentorship programs can bridge this gap. Managers should:

• Assign a mentor or senior team member for guidance.

• Encourage employees to attend industry-related courses.

• Offer hands-on training in areas where improvement is needed.

This investment not only improves employee output but also boosts confidence and job satisfaction.

Create a Performance Improvement Plan (PIP)

If informal feedback and training don’t work, a more structured approach may be necessary. A Performance Improvement Plan (PIP) is a written document outlining:

• The areas needing improvement.

• Specific goals and timelines.

• Available support resources.

• Consequences if performance does not improve.

A PIP demonstrates the company’s commitment to employee success while setting a clear framework for accountability.

Motivate and Recognize Progress

Motivation plays a key role in performance. Managers should focus not only on addressing weaknesses but also on recognizing progress.

• Celebrate small wins to build momentum.

• Use positive reinforcement when employees show effort.

• Show appreciation for improvements through verbal praise, recognition programs, or small rewards.

When employees feel valued, they are more likely to stay engaged and motivated.

Monitor Progress and Offer Continuous Feedback

Managing underperformance is an ongoing process. Regular follow-ups help managers track progress and adjust strategies if needed. Instead of waiting for annual reviews, provide weekly or monthly feedback sessions.

Constructive feedback should be timely, specific, and balanced—highlighting both improvements and areas that still need work.

When to Make Tough Decisions

Despite best efforts, not all underperforming employees improve. If performance does not change after clear communication, training, and formal improvement plans, managers may need to make tough decisions such as reassignment or, in some cases, termination.

This should always be a last resort after ensuring all possible support has been provided.

Conclusion

Managing underperforming employees is a challenge, but it is also an opportunity for growth—for both the employee and the manager. By understanding the root causes, communicating effectively, setting clear goals, and offering support, managers can help employees get back on track. When handled with fairness and empathy, performance management not only improves individual productivity but also strengthens the overall team dynamic.