Managing underperformance: How to identify and address underperformance early

Managing underperformance in the workplace is a challenge that many Australian employers face. There is often a temptation either to avoid difficult conversations in the hope that issues will resolve themselves, or to move straight to formal disciplinary action without first understanding the root cause.

Understanding underperformance – Definitions

Identifying the nature of the issue is crucial, as it determines the most appropriate management response.

1. Underperformance – When an employee does not meet the reasonable standards required in their role, including:

• The quality of work
• The output
• Accuracy
• Productivity
• The achievement of targets and meeting deadlines.

2. Misconduct – Breaches of workplace behaviour or requirements.

3. Serious misconduct – May warrant immediate dismissal following due process.

Scenario: Identifying the problem at Bright Build Supplies

Alex has been in their role for over 12 months. Although there were no performance concerns initially, Alex’s manager notices recurring issues over the past few months. Customer invoices are issued late, account information is entered incorrectly, follow-up tasks are missed, and colleagues are frequently correcting Alex’s work. Frustrated, the manager considers issuing a final warning. However, Alex has not previously received clear feedback about their performance, and the business has not investigated the underlying causes.

Before taking any action, the manager reviews Alex’s position description, expected invoice processing times, specific examples of errors, previous instructions and training, any recent changes to systems or workloads, and how performance standards are applied across the team. He also reviews the company policies to ensure he is following the correct procedure. This preparation allows the manager to give precise feedback rather than general criticism.

Conducting the performance conversation

When facing a minor or emerging performance concern, especially if it has not previously been raised or expectations have been unclear, an informal process is often suitable. Common contributing factors include inadequate skills, insufficient training, or lack of guidance. The manager’s aim should be to support improvement, not to punish.

A constructive conversation involves:

• Explaining the issue using specific examples
• Identifying the relevant standard or expectation
• Providing the employee with a genuine opportunity to respond
• Listening for contributing factors
• Clarifying the improvement required
• Identifying reasonable training, guidance, or workload adjustments
• Setting a review point
• Documenting the discussion.

Hearing the employee’s perspective

At their meeting, Alex explains that a new accounting platform was introduced, but they missed part of the training due to approved personal leave. Additionally, the written procedure does not align with the new system. While this explanation does not excuse all errors, it highlights a possible skills and process gap that should be addressed before considering escalation.

Managers should not approach performance conversations as if the outcome is predetermined.

Listening to the employee’s explanation may reveal unclear expectations, incomplete training, workload issues, system defects, health or personal circumstances, or a simple failure to meet understood requirements. Gathering this context before deciding on a response is a key element of fair and effective people management.

Clarifying expectations and providing support

In response, Bright Build arranges for Alex to receive the missed systems training, provides the updated invoicing procedure, shares examples of correctly completed work, and reiterates the required invoice processing timeframe. A follow-up meeting is scheduled after an initial review period.

Support should be tailored to the specific performance issue; generic training will not resolve a specific capability gap.

Documenting the process

It is crucial to keep a factual, unbiased record of the discussion. Points to note include:

• Performance concerns discussed
• Examples provided
• The employee’s response
• Discussion around the standard required
• The assistance offered
• Agreed actions
• The review date.

What happens next?

Alex completes the additional training, but some concerns about accuracy and timeliness remain. The next article in this series will explore whether Bright Build Supplies should continue with an informal process or implement a structured Performance Improvement Plan.

How the Victorian Chamber can help

Victorian Chamber members can access support with informal and formal performance management through our Workplace Relations Advice Line. Where matters are more complex or require hands-on assistance, enquiries can be escalated for tailored advice and support. Contact the Advice Line on 03 8662 5222.