5 Key Steps to Manage an Underperforming Employee

It is already hard enough to hire employees during a pandemic, and managing a team under pressure can really test your leadership skills. Sometimes, a small business owner has to do everything to keep the doors open, even if it means keeping a few bad apples around. This may mean being tempted to hold onto an employee who is underperforming, because addressing difficult situations during a hurricane of other problems can become overwhelming.

Dealing with an underperforming employee is never easy, especially in the case of a small business. It is easy to become attached to an employee who has committed their time to help your small business during a difficult time, but are they really helping your small business succeed if they are underperforming? For many managers, praising people they like can be easy, but disciplining people they like can feel difficult. Yet, even with this discomfort, managers need to put any personal connections aside and do what is right for the company. Avoiding this will not only harm the business and the other employees’ morale, but the underperforming employee’s career trajectory as well.

Underperforming employees deserve to receive feedback from managers to understand how to succeed at the company. Luckily, there are five steps to manage an underperforming employee that can help any manager of a small business do what is prudent to help both the company and employee succeed.

1. Resupply – Ask, “What additional tools does your employee need?” The first step is to check in with the employee to ensure they have all the tools they need to succeed. Ensure the employee can do their job as required, like access special systems, tools, places and information. A new team member may be too shy to ask for support initially, and it is the manager’s responsibility to see that they are set up properly.
2. Retrain – Ask, “What skills does the employee need to succeed?” If the employee continues to struggle with the job, the manager must check again to ensure the employee has the right skills to do the job. There are many workers who have pivoted careers during the pandemic, and the jobs of the 21st century require sharpening those skills to do well in today’s economy. This means many workers may not have all the skills needed for a job, but a manager should do everything possible to provide on-the-job training and resources for the employee to learn new skills. Labor studies show that when a company invests in an employee’s training to grow their skills, the employee will tend to stick around the company longer.
3. Refit – Try to refit the job to the employee and use a different combination of tasks. If the employee has their own skills for the job but struggles to do it the way it has always been done in your small business, then perhaps the job can be refitted to match the skills of the employee. Allowing wiggle room for innovation gives employees room to grow. Depending on the job assignment, an employee may have a different approach that fits their style better, and as long as it achieves the objective, a manager can benefit from hidden talents within the team.
4. Reassign – Try moving the employee to a different work area or team environment. Sometimes, moving an employee to a different team or work area can help inspire the employee to perform better, but be strategic about the move. For people who are good at their job, working with an underperformer is frustrating and discouraging. It may benefit the team to consider reassigning the employee to another position or department.
5. Release – When all else fails, release the employee from the company. If a manager has tried the first four steps and been unsuccessful in solving the problem, the final step is to release the employee from the company. As painful as it may seem to have to address an underperformance issue or, even worse, have a vacancy to fill, the short-term pain will be worth the long-term gain of hiring someone who will thrive in the role. Your team will thank you, and your bottom line will reflect it as well.

When dealing with an underperforming employee, it is important to remember that just because an employee is not right for their position, they may not be right for another company or role within your company. Managers have a special opportunity to help the underperforming employee figure out their strengths and weaknesses that can set the trajectory of their career. Remember, keeping an underperforming employee for too long can hurt the morale of your team and bottom line of your small business. (Nobody said management was easy.)

EDGAR RAFAEL OLIVO is a bilingual business educator, economic advisor, and contributor for several media outlets. He’s a nonprofit executive who is passionate about education. He is certified in finance and data analytics and holds a business degree from Arizona State University.

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