Managing Underperformance: A Practical Guide for Managers

A manager's first responsibility is to understand the problem, not assume its cause. This guide explains how to diagnose performance gaps, hold fair conversations, provide appropriate support and, when necessary, build a measurable performance improvement plan. The goal is lasting improvement without sacrificing accountability or fairness.

Start with evidence, not impressions. Employee underperformance means there is a demonstrable gap between reasonable, communicated expectations and actual results. Before deciding what needs to improve, establish three things: the required standard, the work delivered and the evidence supporting the difference.

Consider this fictional customer service example:

These figures are illustrative. Confirm that the 95% standard was communicated beforehand and that the audited requests represent comparable work. Unusually difficult cases or a temporary workload spike could distort the picture.

What is causing the gap?

An underperforming employee may face several barriers simultaneously. Capability and conduct should not be treated as mutually exclusive explanations, and health or disability-related circumstances may require appropriate support or adjustments.

As Acas advises, understanding the underlying issue matters because capability and conduct require different responses.

The answers should shape your response before you prescribe a solution.

Managing poor performance requires a conversation that is honest about the gap without making assumptions about the employee's attitude. Arrange a private meeting promptly, once you have reliable evidence, rather than allowing frustration to build.

For managers wondering how to manage an underperforming employee, five steps keep the discussion constructive:

1. 1
   Explain the purpose: State which aspect of performance needs attention without labelling the employee.
2. 2
   Present the evidence: Refer to specific results and previously communicated standards.
3. 3
   Listen before concluding: Invite the employee's perspective, including any circumstances or inaccuracies you may have overlooked.
4. 4
   Agree on expectations and support: Clarify what improvement looks like and what assistance you can provide.
5. 5
   Confirm the next steps: Agree on actions, a review date and a factual written summary.

For example, a manager might say:

“In the last 40 audited requests, six needed rework, against our agreed standard of no more than two. I'd like to understand what's contributing to that gap and what support would help you meet the standard consistently.”

The manager remains accountable for addressing the problem while giving the employee a genuine opportunity to respond.

As Acas advises, appropriate informal support and documented conversations can help resolve performance concerns before formal procedures become necessary.

When Should a Manager Use a Performance Improvement Plan?

However, not every performance issue warrants a formal plan. If an employee struggles with an unfamiliar procedure, additional training, clearer instructions and regular feedback may resolve the problem.

If significant underperformance continues despite appropriate support, a documented plan can establish measurable expectations and accountability. As Acas advises, a PIP should include specific objectives, a reasonable timeframe and the support needed to achieve them. Formal arrangements should follow organisational policy, with HR involvement where appropriate.

Performance Improvement Plan Example: Customer Service Quality

Consider the same employee whose customer request accuracy has fallen below the agreed standard. This fictional performance improvement plan example translates that gap into clear actions and measurable outcomes.

The 95% target and six-week period are illustrative, not universal benchmarks. In practice, agree achievable performance improvement goals that reflect the role, workload and time genuinely needed to develop the required capability.

The manager's commitments matter equally. If promised training, resources or guidance are not delivered, the assessment must account for that before judging the employee's progress.

A Reusable Performance Improvement Plan Template

Use this simplified performance improvement plan template to structure a discussion and record agreed commitments.

The CIPD's guidance on writing performance improvement plans also emphasises learning needs, monitoring methods and clear review arrangements. For a formal PIP, document potential next steps under the applicable HR policy and ensure the employee understands them.

Review progress against agreed evidence throughout the plan, not simply when its deadline arrives. Managing underperformance effectively means checking whether results are improving and whether the promised support has been delivered.

In our customer service example, use regular quality checks alongside three scheduled review meetings:

Assess comparable weekly samples between meetings, including the two consecutive samples required by the example plan. A single good result does not establish sustained employee performance improvement.

At the final review, distinguish between three outcomes:

• Improvement achieved: The employee consistently meets the agreed standard. Return to routine performance monitoring.
• Partial improvement: Progress is evident, but the target remains unmet. Review the remaining gap, support and appropriate next steps.
• Insufficient improvement: Reassess the evidence, barriers and assistance provided before consulting HR about further action.

An extension is neither automatic nor necessarily punitive; it must reflect the circumstances and organisational policy.

Importantly, review the manager's commitments too. Was coaching provided? Did workload or task complexity change? Were the performance improvement goals consistently applied?

As the CIPD's guidance for people managers emphasises, effective performance management depends on clear expectations, regular conversations and timely action.

Managing poor performance is a line manager's responsibility, but some situations require HR involvement before further decisions are made.

Seek guidance when:

• Health or disability-related circumstances may require workplace adjustments, specialist support or a different approach.
• Conduct or misconduct concerns emerge and may need a procedure distinct from capability management.
• Formal action is being considered, including a formal performance improvement plan, warning or other employment-related decision.
• Significant underperformance persists despite reasonable support and documented reviews.

The manager should continue providing accurate evidence, clear expectations and appropriate support. HR can help ensure that decisions follow organisational policy and relevant employment requirements.

As Acas explains, capability and conduct issues require appropriate responses, and employers should support improvement before considering formal action where suitable.

Legal obligations vary by jurisdiction, so managers should follow applicable local requirements rather than assume one procedure fits every workplace.