Introduction
Managing poor performance is one of the trickiest challenges a leader is faced with, and you can’t avoid when you are leading a team or running a business. No one enjoys these conversations, they’re awkward, often emotional, and if handled poorly, can leave lasting damage on morale and trust.
Let’s be honest, even those of us who are trained to do it well find it challenging, but here’s the good news: we can get better at it and it doesn’t always have to be as hard as we think. With the right framework, leaders can address underperformance constructively, uphold accountability, and maintain, even strengthen team morale.
Why the Old School Approach Fails
What typically goes wrong?
Performance issues are usually a symptom, not the disease. Many managers jump straight into formal processes, written warnings, rigid Performance Improvement Plans (PIPs), or disciplinary action, without first exploring the root cause. This reactive approach often:
- Damages trust and team culture
- Feels punitive rather than productive
- Fails to resolve the actual issue
Instead, poor performance management should be seen as a leadership opportunity, to coach, realign, and build a better workplace for everyone.
If your team member is surprised at the point of turning up for a formal meeting to discuss their performance, then you haven’t done your job right! No staff member should show up to a formal meeting and be surprised, if you haven’t set clear expectations, planted the seed early, advised them clearly what they need to improve on and what you need them to change, then that is on you.
When you have taken these steps, your team member will see it coming, they will make an effort to improve or they may even stay stuff it – I’m out, and resign, sometimes that isn’t a bad thing.
A Five-Step Framework for Managing Underperformance with tact
Step 1: Catch it Early and Ask Questions
Don’t wait for review season or repeated complaints. If performance dips or behaviour changes start by checking in informally.
Try asking:
- Where do you think you’re meeting expectations right now, and where do you think there’s a gap? “I’ve noticed a few challenges, is there anything getting in your way?”
- “What kind of support from me would help you do your best work?”
These conversations build psychological safety and signal that support is available before problems escalate – a key aspect of human resources performance evaluation.
Step 2: Clarify Expectations, Together
Misaligned expectations are a common root cause of employee performance issues. Revisit:
- Role descriptions and KPIs
- Behavioural expectations and team values
- Priorities and deadlines
Step 3: Identify Barriers and Offer Support
Before jumping into a performance management plan, assess what might be standing in the employee’s way:
- Lack of resources or tools
- Gaps in training or clarity
- Personal wellbeing or external stressors
Support might include mentoring, peer check-ins, or tweaks to workflow.
Step 4: Create a Plan (before it gets to a formal process)
If the issue persists, consider a coaching plan before any formal performance improvement plan is implemented. This is particularly useful when you have a team member that has a great attitude but needs to get up to speed technically. If you have an employee with a bad attitude on the other hand, looking at building a carefully considered PIP more formally might be necessary.
A good coaching plan or PIP includes:
- Clear goals
- Specific timelines and check-ins
- Active coaching and feedback
- Openness and flexibility in the document and the plan itself.
- Documented steps and clear outcomes
Step 5: Communicate Carefully with the Wider Team
Even confidential performance issues affect culture. Silence can lead to gossip and fear, so reinforce shared standards subtly and positively.
You might say:
- “We’re supporting some team members with their goals, and we all benefit when we lift together.”
- “Everyone faces challenges, but we back our people to succeed.”
Transparency (without oversharing) helps maintain morale across the board.
When It’s Time to Make a Hard Call
Sometimes, despite best efforts, the fit isn’t right. If ending employment becomes necessary, it must be handled with compassion, clarity, and legal rigour.
Always follow best practice under the Employment Relations Act 2000 and seek legal advice if needed. TPP’s experts and our legal partners can help you get it right — reducing risk and protecting your employer brand is critical when you are navigating these serious employment grievances.
Final Thoughts
You don’t have to choose between performance and people. With the right approach, you can build a high-performing team that thrives on trust, clarity, and support.
At The People Project, we believe performance conversations can be a catalyst for growth, not a culture killer.
We support leaders and managers to build skills in conflict resolution, performance reviews, and coaching and leadership to create sustainable success.