Four Steps to Improve Employee Performance

According to Gallup, the cost of replacing an individual employee can range from one-half to two times the employee’s annual salary – and that’s a conservative estimate.

During tight labor markets, it’s even more important to retain existing talent. Last November 2021, 4.5 million workers – an astounding 3 percent of the workforce – quit their jobs, according to the Labor Department. And economists expect the war for talent to continue in 2022 as employers try to reduce turnover and attract new workers.

In light of this challenging labor market, how do you manage an employee who is not meeting expectations but who you still feel has potential? There are steps you can take to improve the situation. Here are four steps we often share with clients.

1. Identify the root cause of the employee performance issue. 

Few problems can be resolved without first identifying the root cause. Set aside time to speak directly with the underperforming employee to determine what circumstances are affecting their performance.

Is he or she dealing with personal issues that are taking focus away from work? Are they struggling with new responsibilities or a major shift in the organization? Are there gaps in training that can be addressed?

An experienced manager understands the benefits of fostering open lines of communication with employees and will be able to have a frank and compassionate discussion, should an issue arise.

2. Review the employee’s goals and expectations.

With a strong performance management system, managers conduct regular performance reviews with employees. During reviews, both parties agree on concrete goals, objectives and timelines for the forthcoming period.

Performance that is not meeting expectations can often stem from miscommunication of expectations. Take time to check in and review goals and expectations with the employee and clarify any grey areas.

3. Offer the employee additional training and support.

If the manager and employee pinpoint specific areas for development, these may be addressed through additional training. Identify the type of training that would be beneficial, perhaps an online project management course or job-specific training, and task the employee with researching options, registering, and seeing it through to completion. Though the organization will pay for it, this can be an effective way to determine if the employee is engaged and willing to put in the extra effort to improve.

4. Develop an employee performance improvement plan.

Many organizations adopt performance improvement plans (PIPs) for employees who are performing below expectations. A PIP defines what performance requires improvement, outlines what actions the employee needs to take to improve, identifies resources or training he or she can utilize and includes a target date for review. This is usually a 90-day plan and requires regular meetings between the manager and employee – usually every week or two. Sometimes additional “stakeholders” are identified who are familiar with the employee’s work and can monitor his or her progress and provide feedback. A representative from HR may attend performance meetings but most communication occurs directly between the manager and employee. Notes from each meeting are captured in the PIP. 

 If an employee does not achieve his or her goals, the PIP can serve as documentation for disciplinary action or termination. 

Improving employee performance requires commitment and effort on the part of both the manager and employee. The ARI team is available to help. If you would like to explore how we can develop and support your performance management system, please contact us and we will schedule a time to discuss your needs. 

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