How to Manage Underperforming Employees: A Guide for Managers

Sometimes, your employees struggle to meet your organizational expectations, and your managers may quickly jump to conclusions. Underperformance is often conflated with laziness or a motivational lack. However, the reality is that most underperformance does not relate to the intent. Instead, it is a sign that the system is not working correctly. This conclusion is not just ours. Several organizational psychology data points support these findings. Managing underperforming employees is a task. 

Talented people do not underperform overnight. Instead, their underperformance creeps in following misalignment between them, their role and their expectations. Sometimes, they might have unclear goals or miss some essential skills. They may also be struggling because of organizational breakdowns. Yet, several managers respond to them in a way that they do not want to engage in challenging conversations. Instead, they default to punitive performance improvement plans (PIPs). Some may assume the worst of their team members. This approach may not address the root cause. Moreover, it may result in mistrust or disengagement.

At Klaar, low performance challenges are not just fixable, they are also coachable. Addressing such challenges is one of the marks of a progressive manager. In this guide, we will explore a few tips on how to manage underperforming employees efficiently. 

Before You Act: Diagnose, Don't Assume

An effective management system always starts with a sense of understanding and not accusation. Before you take any action in favour of or against your underperforming team member, pause and ask: 

A. Is it a skill issue or a will issue?

There is a distinction between a lack of ability or skills and a lack of motivation or will. Understanding this distinction is essential. If someone cannot do their job, they might need training or mentorship. Sometimes, they may not be transparent about the process they are handling. If they want to get their job done, they might have issues with underlying motivation, engagement, or something personal. 

B. Is the role unclear or mis-scoped?

Did you check with your organizational managers on communicating the KPIs with their teammates? Sometimes, your employees may lack clarity on their key performance indicators (KPIs). Some may not know their new objectives and key results (OKRs). Check whether your employees know what looks 'good' in their roles or are still aiming in the dark. 

C. Is feedback too vague or too late?

It is striking to know how many low-performance cases exist in reality. Delayed or unclear feedback from your organizational managers may create confusion, leading to continuous Misalignment and mistakes. 

D. Are you seeing patterns—or just a rough patch?

There might be graphs of high and low performances in each employee's career path. One struggling month may not necessarily mean you have low performing teams or employees. How to manage underperforming employees should be sorted by looking at their trends. Check whether they have been consistently delivering below expectations. It might be a temporary slump triggered by external factors or one of their key projects. 

Klaar's lens: Our platform helps managers reflect on these questions with structured check-ins and feedback history before jumping to conclusions

{{cta-1}}

Step-by-Step Framework for Managing Underperformance

Let's break down the characteristics of managing underperforming employees into a proven five-phase process:

Step 1: Start with a Clarity Conversation

Before you act or judge, open a transparent dialogue regarding your expectations. Many managers start their verdict with "Your performance is unacceptable." This can instead be framed as a question. As a manager, you can revisit your employees' KPIs, KPAs, and other core responsibilities. 

Question them, "What is unclear to you?", "Do you feel stuck, where?" or "How do you see your contributions fitting into our team and organizational goals?" 

Klaar offers shared goals to enable transparent conversations that are easy to trace. This conversation is not limited to cornering your employees around admission. It is more about

Step 2: Surface Context and Barriers

In your journey to manage underperforming employees, we move on to step 2. We will now take a deep one-step digger. In this step, you will focus on the outcomes and explore what goes behind them. You can use data to figure out:

• Do your employees have skill gaps that require proper training or mentorship?
• Do they need personal motivators? Are there any demotivators around them, such as health issues, burnout, or personal blockers?
• Are they dealing with any organizational obstacles? Check for process clarity, resource limitation, or shifting priorities. 
• So, if someone asks you how do you manage underperforming employees, reply: We ask powerful questions to get to know our employees better.
• Several powerful questions exist, such as "What's getting in your way?" and "What would progress look like for you?" These questions are important for separating your assumptions from reality. They will form a base for you to map your next actionable steps. 

Step 3: Set a Short-Term Performance Sprint

Do not just overwhelm yourself with a six-month overhaul plan. The next step in managing your underperforming employees is narrowing your focus to just 1-2 key areas. Set these key areas for assessment for the next 30 to 45 days. The performance sprint will be your experiment in progress. What you can do is: 

• Co-create measurable short-term goals with your employees. 
• Ensure you check them first: "Let's set these targets together. Do you believe that we can achieve them in a shorter time?" 
• You can make these goals visible by using Klaar's goals and weekly check-in features. 
• Sprint is not just tracking your employee output. It helps demonstrate that you can drive the change through clarity and mutual commitment.

Step 4: Give Fast, Frequent Feedback

Do not wait until the last minute to communicate your feedback to your employees. It is one of the poor steps in managing underperforming employees. Your real progress will flourish in the soil of micro-feedback:

• Offer quick and actionable feedback to your employees to make progress
• Reinforce what is working well. Express your gratitude and praise your contributors for the same. 
• Rapidly correct when you find something going off track. It is essential, before your issues start piling up, to compound. 
• You can use comment threads, nudges and real-time reviews from Klaar's capabilities. These elements are essential to keep your feedback loop continuous. 
• All your small wins add up to make it big. Frequent feedback will not just support your growth. It will also reassure you that your individual contributors are making efforts and that their efforts are visible. 

Step 5: Decide the Path Forward

This is the last step in handling low performers in a team. At the end of your assessment period, review each employee's journey. 

If your underperforming employee improves, recognize their efforts and progress. Reset their goals by expanding their responsibilities as you feel appropriate. Continue extending your support to them. 

If there are insufficiencies in their improvement, reflect them with your underperforming employees. Is this a fit issue? Are we familiar with all reasonable interventions? Do you need to evaluate their roles or team?

Your follow-up action should be a formal performance process. You can either upgrade them under your guidance or part with them. Make sure that you do it objectively and transparently. The process should be clear and fair regarding organizational integrity. 

4. Characteristics of Low Performing Teams (And How to Shift Them)

How to Shift from "Low" to "Pro" with Klaar:

• Here are a few quick tips to shift your contributor from 'low' to 'pro' to manage your low-performing teams in a better way: 
• You need to establish clarity around each role. Instead of broadening duties, rely on using the specific KPAs or OKRs. This alignment is beneficial for your contributors in knowing what 'good performance' means. 
• Create a system of feedback. You can have a routine of daily standups, weekly retros, and quick nudges. These elements are ideal for sharing habitual feedback with your contributor, not as a Herculean event. 
• Ensure you replace blame games with curiosity. If something is not working in your team's or organization's favour. Do not make finger-pointing characteristics of low-performing teams a necessity. Encourage honest reflections of feedback. 
• Recognizing, celebrating, and rewarding micro-successes are so essential. Digital feedback platforms such as Klaar are popular for peer shout-outs and reinforcing the behaviours and changes you wish to see. 

What Not to Do When Managing Underperformance

Even the best intentions fade when the managers fall apart on outdated tactics. Here is something that you should avoid: 

Please do not hold back your feedback until it is time for your annual reviews.

Performance problems compound when ignored for months. Addressing concerns as soon as they arise is the key to effective performance management. 

Avoid generalizing your feedback  with "You need to be better."

Vague criticism has always been unhelpful and demotivating. Always see that you tie your feedback to specific behaviours of your employees or results. 

Avoid isolating or quietly offloading responsibilities. 

Moving a task away from your low-performing teams without transparent communication increases disengagement and confusion, and defaults to punitive PIPs without coaching. 

Performance improvement plans or PIPs should not be your first step. You should reserve them when coaching, clarity and feedback do not work. 

With Klaar, managers can break significant challenges into manageable, micro-actionable steps, using ongoing feedback instead of binary ratings.

Klaar's Role in Managing Underperformance (Without Losing Trust)

You need the right tools and good intentions to manage underperforming employees. Here is how Klaar powers your improvement: 

Real-time visibility of goals

Managers and employees view the same goals, KPIs, and objectives. As a result, it becomes easier for you to align with your teammates on your shared accountabilities. 

Feedback tools

Promote early interventions by surfacing blockers and efforts as soon as you witness them. Do not accumulate them until damage happens. 

Coaching-driven 1:1s

Rather than one-sided reviews, Klaar's system is based on 1:1 structures. These structures guide managers in effectively using coaching questions on how to deal with low performing team members. 

Transparent performance reviews

The Klaar tool helps you track the improvement journey of your individual contributors, not just the outcome. In this way, you and your team can easily see growth over time. Integrating tools such as Klaar into your workflow means making performance conversations a part of your team's culture.