16 Feb 2023

6 Causes of employee underperformance and how to fix them

On average, an underperforming employee costs UK SMEs up to £39,500 per year in lost productivity and increased hiring and training costs. The main cause is the unexpected skills gap of new hires.

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89% of UK SMEs reported that new employees need more training than initially expected. This blog post is a collaboration between myself and Zelt. We aim to share some top tips for managers and people teams looking to get ahead of underperformance, avoid unnecessary costs and set their companies and employees up for success.

Victoria Johnson - Green Jay

Vic Johnson is an experienced coach and consultant who via Green Jayworks primarily with start-up and scale-up exec teams within technology, science, engineering and fintech organisations to enhance their leadership potential.

What are the six possible causes of performance problems?

When a person is underperforming, it’s essential to remove assumptions as a person could be under-performing for a number of reasons:

  1. They need extra training/support. 89% of SMEs report that new hires need more training than initially expected.
  2. They lack the skills required to do the role
  3. They have an illness or medical condition that is affecting their time at work
  4. They have personal issues that are affecting their time at work
  5. They are bored in their role and need more challenge
  6. They are suffering from low morale and need more development

How to identify causes of underperformance

Setting clear expectations is key to identifying and managing performance.

You can set these expectations in a number of ways:

  1. Writing clear and transparent job specs/job descriptions that outline the core responsibilities of a role helps to ensure that your people understand the remit of their role
  2. Arranging regular 121s with each member of your team where you focus on the individual’s morale, objectives and development rather than their day-to-day work to understand what external factors may be impacting their time at work
  3. Setting goals/objectives that are purposeful, specific, achievable and measurable will ensure that both of your expectations are aligned and meeting regularly to review these goals/objectives to ensure that they are on target.

How to give feedback to underperforming employees

Giving feedback to underperforming employees can be challenging, but it’s an essential part of addressing performance issues.

Here are some tips for giving effective feedback:

1. Prepare

Plan out what you want to say before you meet with the person. Create a script, and then, if you feel more comfortable, you can read from the script in the meeting.

2. Communicate

Set the right tone: begin the conversation in a professional and non-threatening manner. Introduce the conversation, so the other person knows what to expect, and empathise so you both feel as comfortable as possible.

3. Explore

Describe the observed behaviour, so the other person can picture a specific, recent example of what you are referring to, as generally, people will be less defensive if you can give specific examples.

Share the impact or result so that the other person can understand what has happened due to their actions.

4. Actively Listen

Open up the conversation to ensure that it is not one-sided, as good feedback conversations are dialogues during which the other person can ask questions, share their point of view and explore the next steps together.

5. Agree on a plan

Make a behaviour change suggestion or request, so the other person has an alternative way to approach the situation or task in the future.

Agree on the following steps to ensure that there is a plan for what the person will do going forward and ensure accountability at this stage.

End with a ‘thank you’ to close the meeting and express appreciation for the two-way dialogue.

By approaching feedback in a constructive and supportive manner, you can help underperforming employees improve their performance and contribute to the success of your team.

How do you fix an underperforming team?

Fixing an underperforming team requires a multi-faceted approach. Here are some steps you can take:

1. Foster open communication and collaboration within the team.

Don’t be afraid to talk to someone if their performance isn’t up to scratch. It is fairer to them for you to address it quickly and with understanding and compassion.

One-to-ones are an excellent early warning mechanism for identifying low morale, increasing sickness absence and understanding personal issues that might start to affect their work.

If you don’t speak to them about it, you’ll never understand the root cause, and you could waste time trying to solve the wrong problem.

2. Identify the root causes of underperformance within the team.

Try to avoid making assumptions about the root cause, as it could be due to a number of factors. It may be that priorities/goals/objectives in the business have changed, and this shift has not been communicated to the team; it may be a new team which is still finding its feet, or it may be that some historic skills gaps have not been addressed.

3. Use your organisational goals and values as a sustainable way to encourage and embed new behaviours in the team.

Cascading your organisational goals will ensure that everyone is working towards the same outcomes and will give your team a sense of purpose as each person will understand how they are contributing to the overall success of the organisation.

Shared values create a unified belief system to ensure everyone pulls in the same direction. These values act as a framework to guide how you do something as an organisation rather than what you do.

4. Provide training and coaching to team members as needed.

You don’t necessarily have to ring-fence a huge training budget to invest in your people. Instead, you can look at more cost-effective, organic ways to increase the skills in your organisation, such as the introduction of a mentoring programme to utilise the existing skills you have. Knowledge sharing like this is a great way to future-proof your organisation, as knowledge isn’t locked in the heads of one or two key individuals.

Reverse mentoring, where less experienced individuals provide a different viewpoint and sounding board to more senior ones, is also a great, low-cost option as it shows less experienced members of the team that you trust them to take a role in leading the organisation into the future.

By taking a comprehensive approach to addressing underperformance, you can help your team reach its full potential and achieve long-term success.