Performance management strategy: Rethinking poor performance
9 July 2025
Continuing our series on employee performance, this blog delves into the ins and outs of performance management. From how to get it right to why it matters, this is a deep dive into the topic. We’re also exploring the ‘poor performance’ label, calling on employers and managers to consider how they determine poor performance, the impact being labelled a low performer can have, and how to consistently improve performance across your business.
In a rush? Here are some key takeaways...
- Continuous collaboration: Rather than being a reactive process, performance management should be integrated into the company culture, involving regular feedback, support, and open communication among employees, managers, and HR.
- Traditional KPIs may overlook real value: Measuring performance solely through rigid KPIs can lead to unfair labelling of “poor performers.” A more holistic approach that considers individual contributions, learning styles, and role-specific impact can drive better engagement and outcomes.
- The performance cycle requires structure and empathy: Effective performance management follows a cycle—planning, monitoring, reviewing—with a focus on clarity, regular check-ins, and timely interventions. The goal is performance improvement, not punitive action.
- Businesses must first look inward: Before addressing underperformance, companies should assess internal factors, such as onboarding quality, workplace environment, and training gaps, that may be contributing to the issue. The responsibility is shared.
- Benefits extend beyond productivity: When implemented effectively, performance management reduces workplace stress, enhances engagement and retention, identifies skill gaps, fosters role alignment, and strengthens workplace culture, ultimately creating a more resilient and motivated workforce.
If you've got time to stick around, let's dive a little deeper.
Have you read our blog, ‘Building a sustainable, future-focused, high-performance culture’? Following on from that, here, we explore the importance of performance management, how to implement an employee improvement plan, and why it’s crucial for your business. While we acknowledge that there are employees whose performance will genuinely be lower than expected or needed, we're also exploring the idea that some performance measurements and key performance indicators (KPIs) overlook essential elements and why managers should consider a more holistic approach to assessing performance.
What is performance management?
Performance management is a process that leaders and HR work through when an employee's performance needs improvement. It’s a structured process that runs over a specific timeline, with collaboration between the employee and their manager.
This definition refers to a performance management strategy that can be implemented when you need to improve performance. However, performance management should be an integral part of your culture, providing regular and timely feedback.
You don’t need to wait until performance becomes an issue. Keep on top of it every day of the year.
How performance management works
As we’ve mentioned, the performance management process is structured, and it’s an agreement between the employee and the business. Facilitated by HR and the appropriate manager, the employee agrees to work through the process to reach the desired outcome.
It’s a collaborative exercise where managers also commit to providing employees with the necessary tools and resources to succeed.
The performance management cycle
There are three main stages of the performance management cycle: planning, monitoring and reviewing.
Employees are 57% less likely to consider the performance management cycle successful (Better Works) than their managers are. Morale is one reason for this. Understandably, an employee may feel deflated by it, but the process doesn’t have to be negative. It’s an opportunity for employees to advocate for their needs and training requirements.
Planning
The planning stage occurs first between HR and the manager to identify the required KPIs for measuring performance improvements and to determine the necessary support and training to include in the process. Once aligned, the next stage is to get employee buy-in.
It’s vital that all parties are on the same page and understand expectations and responsibilities to give the employee every chance to complete the process with a positive outcome.
Monitoring
As we’ve mentioned, collaboration is key to a successful performance management plan. You don’t just send an employee away with a list of things they need to do. Managerial support is essential, and that involves regular check-ins and performance monitoring.
As part of the planning stage, agree on the review and feedback intervals and ensure the lines of communication are always open.
Reviewing
Don’t wait until the end to review the results. If you’re monitoring the process, you’ll be able to see how the employee is tracking against their targets. If they need to do more, ensure they’re aware and given the opportunity to do so.
The aim should be to get an employee on track and performing well rather than managing them out of the business. It’s true that this can be how a performance management process ends, but when you’ve already invested so much time and money in an employee, it really is a last resort.
It’s more cost-effective to invest in improving performance than it is to recruit and onboard someone new.
Whose role is performance management?
Ultimately, it falls on management and HR to oversee employee performance and any formal workforce performance improvement plan. Ensure you’ve explored performance management training for managers who may be new to the process. However, as we’ve suggested, performance management is an ongoing process, and every employee plays a role.
Formal or informal mentoring helps improve performance, as does breaking down siloes and knowledge sharing. It’s not performance management in the strictest sense, but it all plays a role.
Personal Development Plans (PDPs)
Creating a culture of learning and encouraging employees to outline a PDP each year puts the onus on employees to take responsibility for their development. Help employees identify areas they want to improve or new areas they want to learn more about, and provide them with a learning platform or a budget for enrolling in courses.
Why performance management is important
Why is performance management important? To create a high-performing workforce, you need a baseline measurement and a process in place for making improvements.
As we share in our blog, 'Building a sustainable, future-focused, high-performance culture’, there are many benefits of a high-performing workforce. It doesn’t happen by accident. It takes work and getting fundamental elements in place, but it also means tackling performance issues.
Before we delve into the benefits of performance management, we’ll sidestep into the topic we presented at the beginning of this blog – the problem we have with the poor performance label.
The problem with the poor-performer label
Why do we have a problem with the poor-performer label? Two reasons.
- If you're using the label because the measurements for success aren’t inclusive of the ways other roles contribute to the business, it’s an unfair assessment.
- Labelling an employee as a poor performer can be detrimental to their confidence, engagement and motivation unless handled correctly.
This risk with solely tying performance-based recognition, especially monetary rewards, to select targets and KPIs is that you isolate and demoralise those whose value you measure differently.
Being labelled a poor performer because the KPIs the business links to performance don’t align with your role can create disengagement. For employees with the same job and targets, a purely points-based KPI may overlook other activities and growth layers that provide value, leading to competitiveness and a potentially toxic culture.
Nance L. Schick, Esq., from Third Ear Conflict Resolution, shares her opinion on the 'low-performer' label.
It’s a shift in responsibility from employer to employee. Yes, employees have a responsibility to perform more than the bare minimum duties to be considered high performers. It’s up to the employers to hire employees who can perform the essential functions of posted jobs, train those employees to perform their jobs to the employer’s specifications, including each time there is a change, and provide employees with the tools and mentorship necessary to become high performers.
Managing poor performance
We're calling for a rethink on how we determine poor performance, to create an inclusive approach that looks beyond traditional KPIs. As Giovana M, International Development & Sustainability Consultant and People & Inclusion Advocate states;
Rewarding high achievers more significantly is not a new concept. It’s a well-established principle in many pay-for-performance models. However, the current economic and cultural climate is forcing us to examine its long-term sustainability and unintended consequences. While it’s crucial to recognise exceptional contributions, a sharp divide in rewards, especially if not transparently managed, can create disengagement among solid, reliable performers whose contributions may be less visible but are critical. It also risks fostering short-termism, where high performers chase immediate wins over longer-term capability building.
Still, there will be times when HR and management must tackle genuine poor performance.
How to manage a poor performer
One of the most crucial steps in managing poor performance is identifying its cause. Lack of training, poor engagement or motivation and even burnout will all affect employee performance, and the business must take some responsibility for areas where they need to improve.
84% of managers agree that burnout needs to be addressed through performance management (Employee Benefits).
As Nance suggests, the employer has a responsibility to ensure employees can perform well, have the right tools, training, and are a good fit for the role from the beginning. Before you embark on the performance management process, you must do two crucial things:
- Assess potential causes, including training shortfalls and the workplace environment – is there conflict, stress, or are you understaffed – to ensure you’ve identified any factors beyond the employee’s control that are affecting performance.
- Was the onboarding experience sufficient? Were they given appropriate training? Do they have all the access, support and systems they need to do their job properly?
The point we’re coming to is that before you start the process of managing a poor performer, you first look inward to ensure you’ve identified any business shortcomings before placing the responsibility to improve on the employee.
More plainly speaking… get your ducks in a row first.
9 benefits of performance management
What are the benefits of performance management? We’re exploring nine key areas: reducing workplace stress, increasing engagement and motivation, creating a sense of ownership, improving employee retention, identifying skills gaps and onboarding improvements, enhancing productivity, and fostering a positive workplace culture.
1. Reduce workplace stress
How can performance management reduce workplace stress? It’s a valid question, as the performance management process can be stressful for everyone.
Consider this. What impact does an underperforming employee have on the rest of their team? It can be an extra weight to carry and cause stress. Let’s also show empathy for the employee who has the best intentions, but the elements needed to perform well aren’t there – things just aren’t lining up.
What about the manager pushing to get the best from their team but always falling short? Assessing the cause of the issue and taking measures to make improvements will reduce workplace stress.
2. Increase employee engagement and motivation
If you approach performance management as a collaborative exercise whereby the manager and employee recognise their mutual responsibility in performance improvement, you’ll increase their sense of belonging. If they feel like the performance management process is something you’re doing with them rather than to them, they’ll be more engaged in the process.
Leave the ego at the door and recognise where the business or manager needs to do more, and the strategy shifts from one that could cause unease to one that adds value and motivates the employee to succeed.
3. Create a sense of ownership
Collaboration is key. Rather than bringing targets to the table, presenting the employee with a selection of boxes they must tick by the end of the process, allow them to express what they need.
That could be training, flexibility or mentorship. By giving employees a sense of ownership over the performance management process, they’re more likely to see how it can succeed, which gives them the confidence and boost they need to reach the desired results. The seeds planted during the process will feed into their ongoing work ethic.
4. Improve employee retention
A performance improvement plan requires additional work for managers and HR, but let’s be honest, it’s far less hassle and expense than it is to recruit someone new. Talent acquisition is expensive. Employers often end up offering a higher salary than anticipated to secure top talent. Then, there are potential agency fees and the cost of onboarding and training.
Investing time with someone already embedded in your business is far more cost-effective, as it adds value to the relationship and secures their loyalty.
5. Identify skills gaps
Managers may have made assumptions about the skills and capabilities within their teams. Performance management – through a structured process or by ongoing review and feedback – helps managers identify skills gaps.
The next stage is to create a training programme to help employees upskill, creating a robust and high-performing team.
6. Discovering untapped skills and abilities
When you sit down to have a conversation with an employee about performance concerns, please don’t just highlight where they’re lacking. It will start the whole process on a negative note. As well as highlighting what you consider to be their strengths, ask them what they think they’re good at.
Better still, ask them what they enjoy. Employees often move into completely different roles within the same business due to their interests evolving or because their skills are better placed elsewhere. You may discover that the poor-performing salesperson is better suited for client relations or support.
The performance management process could conclude that while an employee isn’t right for one role, they could thrive in another.
7. Highlight onboarding improvements
There are times when a structured performance improvement plan doesn’t have a happy ending, and people part ways. Use this situation as a learning experience. If the employee wasn’t the right fit, at what point in the recruiting and onboarding process was this missed? Were there any gaps in the new employee training programmes?
It’s not a blame game but an opportunity to make improvements to avoid being in that situation again.
8. Improve productivity
Perhaps we should have started with this, as it’s the most obvious and desired outcome. The performance management process improves the quality of work, productivity, and client satisfaction – everything you need for revenue uplift and sustainable growth.
Flip the narrative. View performance improvements as an opportunity to help shape employees into who you need them to be, to adapt better working practices and a growth mentality.
9. Foster a positive workplace culture
We’ve touched on the conflict and stress that other employees may experience when a colleague's performance becomes an issue. It can create an unhappy working environment, which could negatively impact wider workplace performance.
Re-thinking how to approach performance metrics and working through the process collaboratively will achieve better results, improving performance and workplace morale.
A holistic approach to performance management with Pluxee UK
We’ve been through a lot to get to this point, and we appreciate you sticking with us for this in-depth review of performance management. From what it is, why it matters and the importance of thinking differently – even having an open mind, there’s plenty of food for thought.
At Pluxee UK, we’re on a mission to make work not just a place to be but a place to belong. We improve the employee experience with our range of perks and rewards, as well as resources like this blog.
Together, we can create a sustainable, high-performing culture where every employee has the chance to shine.
Sources: Betterworks, Employee Benefits, Giovana M
