Underperforming Employees: How to Handle Them?


Underperforming employees is a major concern for any organization as it impacts its growth and development. Employee underperformance needs to be given special care so that his/her performance would be improved.

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Underperformance is when an employee is performing below the set limits or below the set targets. Underperforming Employees are a major concern for any organization as it impacts its growth and development. Underperformance might occur due to many reasons such as job likeability, organizational culture, personal problems, work-related stress, and many other reasons.

Underperforming employees if left alone could create great damage to the organization as they would hinder the progress of the organization. Employee underperformance needs to be given special care so that his/her performance would be improved and reach an optimum level. 

How to deal with underperforming employees?

Identify the issue:

The first thing to do for the organization is to identify the issue behind an employee’s underperformance. There might be one or more issues which are the causes of underperformance of an employee. Classify the issues into Key issues and Supporting issues that are leading to the underperformance of an employee.

The key issues should be addressed first and then the supporting issues would follow. Key issues can be personal problems of the employee, lack of growth opportunities in the current organization, lack of recognition etc. 


The next step in dealing with the underperforming employees is to provide continuous feedback to the employees. The feedback should be constructive and destructive to the career of the employee.

Constructive feedback can act as an intrinsic motivation leading to performance improvement whereas destructive feedback would motivate the employees and further deteriorate the performance. 

Continuous Monitoring:

Then in the next step the employee should be monitored continuously to evaluate the performance. The monitoring can be done on a daily basis or weekly basis or monthly basis to evaluate the performance of the employee.

The task should be divided in such a way that the performance can be evaluated and monitored in parts. If the performance in the mini tasks is not satisfactory then the feedback can be given to the employee immediately so that the issues can be rectified and performance can be improved. 


The other step is to provide required training to the employees. Training should be 360 degrees to improve the overall performance of the employees. The training should include the personal and professional growth factors of the employee.

Once the training is given then the performance of the employee should be monitored continuously and feedback regarding the training should be given to the employees.  

Setting achievable goals:

ˀThe major important thing to be considered is to give targets or set goals that can be achievable by the employees. There might be high performers, average performers and low performers in an organization and the targets should be given accordingly.

Low performers should be taken to the next stage gradually i.e. average performer stage. The same is with the average performer and top performer. Top performers should be maintained in such a way that the performance is on the top every time. 

Reasons for underperformance:

Mis-fit of Job:

The main reason for underperformance could be the misfit of the job. If the person-job fit is missing then the employee is certain to under perform. Person-job fit is when the characteristics of the job are matching with the nature of the person.

For example a person interested in sales if deputed to work on a system may underperform as that person likes to interact with people and close the deals rather than working on a system entering the data. 

Organizational culture:

Organizational culture may act as a reason for underperformance among the employees. This is known as the Person-Organisation fit in which the culture of the organization does not match with the culture of the person.

For example, if the organization has a culture of teamwork with less autonomy but the person requires autonomy to be efficient, then in such cases the performance of the employees would come down  leading to underperformance. 

Lack of recognition:

Lack of recognition and growth opportunities in the current organization can also lead to underperformance among the employees. If an employee perceives that there is no recognition for work and the growth opportunities are also dry then the employee would not be willing to work. 

Unclear goals or changing goals:

The other reason for underperformance could be unclear goals or rapidly changing goals that are given to the underperforming employees. If an employee is given an unclear goal or a rapidly changing goal, the employee may not be able to adjust strategies accordingly. 

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Susheel Agarwal

Namaste. I'm Abhinay Nedunuru, a Fellow of the Insurance Institute of India with a passion to make insurance simple and crisp. I write on insurance and investment. I have a passion for teaching and training in particular to insurance. I'm currently doing my PhD from IIM in Management.