When an employee is consistently underperforming, the first question many organisations ask is: What is wrong with the employee?
Sometimes, the employee is genuinely struggling with capability, attitude, commitment or accountability.
In many organisations, employee performance problems are symptoms of deeper issues. Employees may not understand what is expected of them. Managers may not be providing regular feedback. KPIs may exist on paper but have little connection to day-to-day work. Roles may have changed without their expectations being updated. Or employees may lack the skills, resources or management support required to perform effectively.
This is why improving employee performance requires more than telling people to work harder.
It requires leaders to examine the performance management system around the employee.
The Chartered Institute of Personnel and Development (CIPD) describes performance management as a broad process involving objectives, feedback, performance improvement, development, recognition and career progression. When these elements work together, employees are better positioned to contribute to organisational goals.
At Proten Advisory, we believe performance should be treated as a business issue, not simply an HR issue.
If people are not performing, leaders need to understand why before deciding what to do about it.
What Is Employee Performance Management?
Employee performance management is the structured process an organisation uses to align individual performance with business objectives.
It goes beyond an annual appraisal.
An effective performance management approach should help answer five important questions:
- What is this employee responsible for?
- What does good performance look like?
- How will performance be measured?
- What support does the employee need to succeed?
- What happens when performance falls below expectations?
CIPD identifies activities such as setting objectives, providing feedback, supporting development, improving performance and recognising contribution as important parts of performance management. It also emphasises that performance management should be an ongoing process rather than an isolated event.
That distinction matters.
If performance is only discussed during an annual appraisal, the organisation is reacting to performance rather than managing it.
Why Employee Performance Problems Are Not Always Employee Problems
Consider an employee who consistently misses targets.
It is easy to conclude that the person is lazy, incapable or simply not committed.
But before reaching that conclusion, a manager should ask:
- Were the targets clearly communicated?
- Are the targets realistic?
- Does the employee have the required skills?
- Have priorities changed?
- Does the employee have the right tools and resources?
- Has the manager provided meaningful feedback?
- Does the employee understand how their role contributes to the wider business?
- Are other employees in similar roles experiencing the same problem?
- Has the employee received appropriate training and support?
- Is the organisational structure creating unnecessary bottlenecks?
These questions help distinguish an individual performance problem from a systemic performance problem.
That distinction is critical because the solution depends on the diagnosis.
Training will not fix an unclear role.
A new KPI will not fix poor management.
A performance warning will not fix an unrealistic workload.
And hiring a replacement will not solve a structural problem that affects everyone in the same role.
6 Signs Your Performance Problem May Actually Be a Management Problem
1. Employees Are Not Clear About What Good Performance Looks Like
One of the most fundamental requirements for performance is clarity.
Employees need to understand their responsibilities, priorities, expected outcomes and measures of success.
If an employee is told to “improve performance” without being told what improvement actually means, the organisation has created an accountability problem without creating clarity.
For example, a sales employee may be told to increase sales.
But what does that mean?
Is the expectation based on revenue, number of new clients, conversion rate, average deal value or customer retention?
Clear performance expectations should translate business priorities into measurable individual or team objectives.
Proten Advisory perspective: Before concluding that an employee is underperforming, leaders should first confirm that the employee understands exactly what they are accountable for.
2. Managers Only Discuss Performance During Appraisals
A performance review should not be the first time an employee hears that something is wrong.
If an employee has been missing targets for six months and the issue only comes up during an appraisal, the organisation has waited too long to intervene.
Effective performance management involves regular conversations about progress, challenges, priorities and development. CIPD guidance similarly positions performance management as an ongoing process involving regular feedback and evolving objectives.
Managers should be asking questions such as:
- What is going well?
- What is getting in the way?
- Which priorities have changed?
- Where do you need support?
- What should we do differently next month?
These conversations make performance management more proactive.
3. Managers Avoid Difficult Performance Conversations
One of the biggest weaknesses in performance management is not the absence of a process.
It is the reluctance to use the process.
Some managers avoid addressing poor performance because they do not want to appear confrontational. Others wait for HR to intervene.
This creates a dangerous pattern.
The employee continues underperforming, the team becomes frustrated, high performers may feel that poor performance is being tolerated, and the manager loses credibility.
Performance conversations do not have to be aggressive.
They need to be clear, evidence-based, fair and focused on improvement.
The conversation should address the gap between expected and actual performance, understand the reasons for the gap, agree on the required improvement and establish how progress will be monitored.
4. KPIs Exist, But Nobody Uses Them to Manage Performance
Many organisations have KPIs.
Fewer organisations use them effectively.
A KPI should not simply appear on a performance appraisal form. It should help managers and employees make decisions throughout the year.
For example, if a customer service team has a target for response time, customer satisfaction and resolution rate, managers should be reviewing those indicators regularly.
When performance begins to decline, the data should trigger a conversation.
This turns KPIs from measurement tools into management tools.
A strong performance system connects:
Business goals → Team objectives → Individual responsibilities → Performance measures → Regular reviews → Improvement actions
When those connections are missing, KPIs can become administrative rather than strategic.
5. HR Owns Performance Management While Managers Stay on the Sidelines
HR may design the performance management framework, but managers are the people closest to day-to-day performance.
CIPD notes that people managers are central to performance management because they are responsible for connecting individual objectives to organisational goals, providing feedback and holding employees accountable. HR practices and processes should support managers rather than replace their responsibility.
This means performance management cannot be an annual HR exercise.
HR should provide the framework, tools, guidance and governance.
Managers should own the day-to-day conversations.
Leadership should ensure the system supports business priorities.
Employees should understand their responsibilities and take ownership of their performance.
6. Employees Receive Feedback, But It Is Not Useful
“Do better.”
“Be more proactive.”
“You need to improve your attitude.”
These statements may communicate dissatisfaction, but they do not necessarily help someone improve.
Useful feedback should be specific.
Instead of:
“Your communication needs improvement.”
A manager might say:
“In the last two client meetings, the project updates did not include the agreed timelines. Going forward, every client update should include the current status, outstanding actions and expected completion date.”
The second statement gives the employee something they can act on.
Effective feedback should help an employee understand:
What happened → Why it matters → What needs to change → What good performance looks like → When progress will be reviewed
That is how feedback becomes a performance management tool rather than simply criticism.
How to Improve Employee Performance in Your Organisation
If employee performance needs to improve, organisations should resist the temptation to immediately introduce another training programme or disciplinary process.
Start with diagnosis.
Step 1: Clarify the Performance Expectation
Review the employee’s job description, objectives and KPIs.
Ask:
- Are responsibilities clear?
- Are targets measurable?
- Are priorities aligned with the current business strategy?
- Are expectations realistic?
If expectations are unclear, fix that first.
Step 2: Identify the Performance Gap
Define the difference between expected and actual performance.
For example:
Expected: 95% of customer requests resolved within agreed service levels.
Actual: 76%.
This creates an objective starting point for the conversation.
Step 3: Understand the Cause
Performance gaps can have different causes.
A useful diagnostic framework is:
Capability: Does the person have the required knowledge and skills?
Clarity: Do they understand what is expected?
Capacity: Do they have enough time and resources?
Context: Are processes, systems or organisational structures creating barriers?
Commitment: Is there an issue with motivation, attitude or accountability?
This prevents leaders from automatically treating every performance problem as a training problem.
Step 4: Provide the Right Intervention
The intervention should match the cause.
| Performance issue | Possible intervention |
| Skills gap | Training, coaching or mentoring |
| Unclear expectations | Role clarification and revised objectives |
| Manager capability gap | Manager coaching or leadership development |
| Process problem | Process redesign |
| Workload issue | Resource or workload review |
| Capability and accountability issue | Performance improvement plan |
| Structural problem | Organisation design or role restructuring |
The important principle is simple: Diagnose before prescribing.
Step 5: Set Clear Improvement Expectations
If performance needs to improve, define what improvement means.
A performance improvement plan, where appropriate, should clearly establish:
- The performance issue
- Expected standard
- Actions required
- Support available
- Review dates
- Measures of success
- Consequences if improvement does not occur
This creates transparency for both the employee and the organisation.
Step 6: Review Progress Regularly
Performance improvement requires follow-through.
Managers should establish regular check-ins rather than waiting until the next formal appraisal.
The frequency will depend on the situation, but the principle remains the same:
Set expectations → Support improvement → Monitor progress → Give feedback → Adjust where necessary → Hold accountable.
The Manager’s Role in Improving Employee Performance
A performance management system is only as effective as the managers who use it.
This is increasingly important as organisations rely on managers to translate strategy into everyday execution.
Gallup’s latest global workplace research found that global employee engagement fell to 20% in 2025, its lowest level since 2020. Manager engagement has also declined significantly, with manager engagement falling to 22% globally in 2025. Gallup identifies declining manager engagement as a major contributor to the broader decline in employee engagement.
For business leaders, the implication is important.
You cannot build a high-performance organisation while treating managers as an afterthought.
Managers need the capability to:
- Set expectations
- Translate business objectives into team priorities
- Give constructive feedback
- Coach employees
- Address underperformance
- Recognise strong performance
- Manage difficult conversations
- Develop team capability
- Hold people accountable
Promoting someone into management does not automatically give them these skills.
A strong individual contributor can become a weak manager if they are not equipped for the role.
That is why manager capability should form part of an organisation’s broader performance strategy.
What Should an Effective Performance Management System Include?
There is no universal performance management model that works for every organisation.
The right approach depends on the organisation’s strategy, structure, workforce and operating environment.
However, an effective system should generally include five connected elements:
1. Clear Objectives
Employees should know what they are responsible for achieving and how their work contributes to organisational priorities.
2. Relevant Performance Measures
KPIs should measure outcomes that actually matter to the role and the business.
3. Continuous Feedback
Performance conversations should happen throughout the year, not only during formal appraisal periods.
4. Development and Support
Employees should have access to the skills, resources, coaching and support required to perform effectively.
5. Accountability
Good performance should be recognised, while persistent underperformance should be addressed fairly and consistently.
CIPD similarly emphasises alignment with organisational goals, regular feedback, development and appropriate management of underperformance as key aspects of effective performance management.
How Business Leaders Can Review Their Performance Management System
For CEOs, founders and senior HR leaders, the question should not simply be:
“Are our employees performing?”
A more useful set of questions is:
- Are our organisational goals translated into clear team and individual objectives?
- Do employees understand what success looks like in their roles?
- Are managers equipped to manage performance?
- How frequently are performance conversations taking place?
- Are KPIs actually being used to manage performance?
- Do employees receive timely and actionable feedback?
- Can managers identify performance problems early?
- Are we distinguishing skills gaps from motivation or accountability issues?
- Are our performance processes consistent across teams?
- Does our performance management system support the business strategy?
The answers can reveal whether the organisation has a genuine performance management system or simply an appraisal process.
Performance Management Is a Business Issue
Employee performance directly affects execution.
When people understand their roles, have the capability to perform, receive useful feedback and are held accountable, the organisation is better positioned to execute its strategy.
When those conditions are absent, leaders may see the consequences in different forms:
- Missed targets
- Poor customer experience
- Low productivity
- Repeated errors
- Management frustration
- Employee disengagement
- High-performing employees carrying underperformers
- Increased employee turnover
- Delayed business priorities
This is why performance management should not sit in isolation from business strategy.
The real question is not simply:
“How do we get employees to perform better?”
It is:
“Have we created the organisational conditions that enable people to perform at the level the business requires?”
That is a leadership question.
The Proten Advisory Perspective
At Proten Advisory, we approach employee performance from a business and organisational perspective.
When a client tells us that employees are not performing, our starting point is not to immediately recommend training, recruitment or disciplinary action.
We first seek to understand the system around the performance problem.
Is the organisation structured appropriately?
Are roles clearly defined?
Are managers equipped to lead?
Are performance expectations aligned with business objectives?
Are KPIs meaningful?
Are employees receiving the right support?
Are performance conversations happening consistently?
And where there is genuine underperformance, is the organisation equipped to address it fairly and effectively?
This diagnostic approach matters because the wrong intervention can cost an organisation time and money without solving the underlying problem.
Sometimes the answer is capability development.
Sometimes it is management development.
Sometimes the organisation needs clearer performance systems.
Sometimes roles or structures need to change.
And sometimes the employee does need to be held accountable.
The objective is not to find someone to blame. The objective is to understand what is preventing performance and address it at the right level.
Final Thoughts
Improving employee performance is rarely about simply telling employees to work harder.
Sustainable performance comes from the interaction between people, managers, systems, structure and strategy.
If your organisation is experiencing persistent performance problems, start by looking beyond the individual.
Ask whether employees have clear expectations.
Ask whether managers are equipped to lead.
Ask whether your KPIs actually support business priorities.
Ask whether feedback is timely and useful.
Ask whether your systems enable people to succeed.
And when genuine underperformance exists, address it clearly and fairly.
Because effective performance management is not about waiting for employees to fail.
It is about creating the clarity, capability, support and accountability required for people to succeed.
At Proten Advisory, we help organisations examine the people and organisational factors that influence business performance, from performance management and leadership capability to organisational structure, workforce strategy and broader people advisory needs.
Frequently Asked Questions
How can I improve employee performance?
Start by identifying the reason for the performance gap. Review role clarity, objectives, skills, workload, resources, management support, processes and accountability before deciding on an intervention. The appropriate solution may involve coaching, training, process improvement, clearer expectations or stronger performance management.
What is the best way to manage employee underperformance?
Begin with evidence and diagnosis. Clearly communicate the performance gap, understand the underlying cause, agree on the required improvement, provide appropriate support and establish regular review points. Where underperformance persists, organisations should follow a fair and consistent process.
How often should employee performance be reviewed?
Performance should be discussed continuously rather than only during an annual appraisal. Formal review frequency can vary by organisation, but managers should have regular conversations about objectives, progress, challenges, feedback and development.
What is the role of managers in performance management?
Managers are central to day-to-day performance management. They translate organisational objectives into team priorities, set expectations, provide feedback, support development and address underperformance. HR should provide the framework and governance, but managers must own the everyday performance conversation.
Is employee training enough to improve performance?
Not always. Training is appropriate when the problem is a genuine knowledge or skills gap. If the underlying issue is unclear expectations, poor management, inadequate resources, ineffective processes or organisational structure, training alone is unlikely to solve the problem.
Why is performance management important for businesses?
Effective performance management helps align individual contribution with organisational goals, identify performance gaps, support employee development and create accountability. It can also help organisations identify problems earlier rather than waiting for them to become significant business issues.
Sources
- Chartered Institute of Personnel and Development, Effective Performance Management: Guide for HR Professionals.
- Chartered Institute of Personnel and Development, People Manager Guide: Effective Performance Management.
- Chartered Institute of Personnel and Development, Performance Management Factsheet.
- Gallup, State of the Global Workplace 2026.
