HR · 23 October 2019

Quick advice on dealing with an underperforming employee in the workplace

underperforming employee

Understanding your legal rights as an employer when dealing with a member of staff who just isn’t pulling their weight is one of the less palatable aspects of business leadership. Not only is it an awkward and confrontational situation to manage, but employers are also aware that they don’t want to face any legal action from the employee should they feel unfairly dismissed. Another issue is when the employer makes a mistake with the disciplinary or firing process and lands themselves in hot water that way.

The delicacy of the situation is even greater in small to medium businesses. Not only would an SME be more financially threatened if a costly legal action was brought by a dismissed member of staff, but any sort of unproductivity in the workforce is more obvious and damaging in small businesses where employees are expected to ‘band together’ and help each other out.

Underperformance affects SMEs the most

Either way, having an underperforming employee in a small business is more dangerous and costly than in larger businesses with various lines of process and management, and legal teams.

With smaller businesses especially, it’s often the owner-drivers themselves that have to deal with this issue. This makes it even more important that they know their legal rights and obligations before dealing with the employee in question.

Here’s the advice that two legal and HR experts have given exclusively to Business Advice readers on what to do when faced with this tricky situation…

David Bradley, Head of Employment Law and Chairman, Ramsdens Solicitors

All SME employers know this situation can be tricky. The business is lean, no passengers allowed, and colleagues and bosses can find out pretty soon who isn’t pulling their weight. So, how do you respond? Will it take forever to deal with the situation? But firstly, a reasonable conversation is likely to uncover whether the employee has a problem or whether the employee is the problem.


  • Find out the facts – is this a performance or conduct issue, or both?
  • Is there an underlying health issue – be mindful of disability issues
  • Be consistent in the application of your knowledge – compare the situation with other similar employees
  • Examine the contract and any relevant policy and apply them
  • Establish whether the employee has more than two years’ service

Do not

  • Jump to conclusions; Or rely on the views of persons who may have an axe to grind
  • Ignore special circumstances that may lead to a claim for discrimination
  • Leave matters hoping they will go away

Sue Andrews, HR & Business Consultant, Kis Finance

Having overseen workforces across a range of organisations, I have a great deal of experience in managing employee performance issues, so here are key tips for successfully handling this often tricky process:

If informally addressing concerns has no impact, then move to your formal performance procedure. Basing these next moves on the ACAS Code of Practice will also reduce the risk of an unfair dismissal claim.


  • Hold an investigatory meeting to explore why their performance is falling short of standards
  • Check they have a clear job description and have received all relevant training before taking any further action
  • Invite them (if appropriate) to a disciplinary hearing, where the usual rights for the employee to be accompanied and to raise an appeal against the outcome still apply

Also, remember…

It’s usual to commence with a written warning first, along with clear guidance on required improvements and expected timescales for this to be achieved. Ensure they understand that failure to improve could ultimately lead to their dismissal.

If their poor performance is damaging business and you want to avoid a drawn-out process you could consider a Settlement Agreement to bring the matter to a swifter conclusion.

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Annie May is the Features Editor at Real Business and Business Advice. Following her graduation from LSE, she embarked upon a freelance career in current affairs journalism. Annie has written on subjects varying from African history and contemporary politics to community business and current affairs news in London. At Real Business and Business Advice, Annie is passionate about highlighting inclusive and diverse business disruptors and organisations for our evolving readership. Annie believes in fostering community inclusion and has volunteered for organisations such as Fairfield House, a UK based Rastafari centre and a senior citizen association for ethnic minority men and women.

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