Managing poor performance.

To deal with an underperforming team member, do four things in one conversation: describe the specific behaviour with examples and dates, explain the effect it is having on clients, colleagues or the business, ask for their side and actually listen to it, then agree what good looks like and the date you will both review it. Follow it up the same day with a short email confirming what was agreed. That is the entire mechanism, and it works because it converts a vague sense of disappointment into a standard, a deadline and a written record.

The reason performance problems drag on for years in small businesses is not that owners lack the framework. It is that the first conversation never happens, so the second one has to carry six months of accumulated frustration and lands far harder than it should. Everything below is designed to get you to that first conversation sooner, while it is still a small, ordinary piece of management rather than a confrontation.

Why do owners leave it so long?

Four reasons come up again and again. The conversation is unpleasant and there is always something more urgent. There is a fear of legal risk, which usually leads to doing nothing — the option that actually creates the risk. There is the hope it will sort itself out, which it rarely does. And there is not knowing what to say, which is fixable and is the bulk of this guide.

Meanwhile the cost is being paid by everyone else. Other people notice, and what they take from it is that the standard is optional. The strongest person in the team is usually the first to be affected, because they are the one absorbing the extra work. Left long enough, the owner becomes the only person who visibly cares about quality, which is an exhausting place to run a business from and a fair description of how a lot of owners end up as the bottleneck in their own business.

What are the early warning signs?

Poor performance almost always announces itself before it becomes undeniable. Work arriving late or incomplete more than occasionally. Output that is below the standard that was agreed rather than the standard you assumed. A change in how someone shows up in team meetings — quieter, more defensive, or noticeably less interested. Clients or colleagues raising things sideways rather than directly, which is often the earliest signal of all.

Deal with it at this stage and it is a five-minute conversation. Deal with it once a pattern of failure exists and it is a process. The practical rule: the second time you notice the same thing, say something. Not the fifth.

Step 1: Check it is a performance problem and not a management one

Before the conversation, ask honestly whether the person knows what good looks like, has been trained to do it, has the tools and time to do it, and has ever been told they are falling short. If the answer to any of those is no, part of this is yours. The will and skill model is the fastest way to sort it: low skill and high will needs training and closer direction; high skill and low will is a motivation or expectation problem and needs a different conversation entirely; low on both usually means the person is in the wrong role.

Getting this wrong is expensive in both directions. Training someone who is not willing is money spent on the wrong problem, and disciplining someone who was never properly shown the job is unfair and will be seen as unfair by everyone watching.

Step 2: Gather specifics rather than impressions

"Your work has not been good enough lately" is unanswerable and therefore useless. Write down three or four concrete instances with dates before you go in. Three of the last five reports arrived after the agreed deadline. Two clients had to chase for a response last month. The handover notes for the March job were not written and someone else spent a day reconstructing them.

Specifics do three things: they make the problem discussable, they stop the conversation becoming about character, and they protect you if the matter later becomes formal. If you cannot produce three examples, you are not ready to have the conversation — or the problem is smaller than the feeling you have about it, which is also worth knowing.

Step 3: Run the four-part conversation

Do it in private, sitting down, with the door shut and the phone away. Twenty minutes is usually enough.

• Describe the behaviour. Factually, with the examples and dates you prepared, and without interpreting motive. "Three of the last five reports arrived after the agreed deadline" — not "you do not seem to care about deadlines".
• Explain the impact. What it costs the client, the team or the business. This is the part most owners skip, and it is the part that makes the standard feel real rather than arbitrary.
• Ask for their perspective, then be quiet. There may be a reason you do not know about — a process that changed, a health issue, a problem with someone else in the team, or something at home. Listen properly. You cannot solve the right problem if you decided what it was before you walked in.
• Agree the standard and the date. What good looks like, in observable terms, by when, and when the two of you will sit down and review it. Put the review in the diary before you leave the room.

If you want a structure for the whole thing, the OARBED model is a useful frame for keeping the conversation above the line — dealing with ownership and accountability rather than blame, excuses and denial.

Step 4: Confirm it in writing the same day

Send a short email that afternoon: what was discussed, what was agreed, what the standard is, and the review date. Six lines is plenty. This is not bureaucracy. It removes the "that is not what I understood" conversation entirely, it gives the person something to work from, and it signals that you are serious — which by itself changes behaviour more often than anything else in this guide.

Keep the emails. If the situation ever becomes formal, a calm trail of specific, fair conversations is the single most useful thing you can have.

Step 5: Actually hold the review

The most common failure at this point is quiet relief. Things improve for a fortnight, the pressure comes off, and the review never happens — which teaches the person that the standard applies for about two weeks after a telling off. Hold the review on the date you set, whatever has happened. If it has improved, say so plainly and specifically; recognising the change is what makes it stick. If it has partly improved, name which part and reset the rest with a new date.

Step 6: What if it does not improve?

Then you are into a formal process, and this is the point to get proper advice rather than improvising. In Great Britain the Acas Code of Practice on disciplinary and grievance procedures sets out what a reasonable process looks like, and Northern Ireland has its own LRA code. An employment tribunal can adjust an award by up to 25 per cent where an employer has unreasonably failed to follow the relevant code, so the process is worth doing properly from the start.

Two things make the formal stage far easier: everything you did in steps three to five, and having started early. Owners who dread this stage are almost always the ones arriving at it cold, with no record and no prior conversation, having tolerated the problem for a year.

What does leaving it actually cost?

Put illustrative numbers on it, because the cost of doing nothing is invisible and the cost of acting is not. Take someone on £30,000 a year. With employer National Insurance, pension and the usual overhead, the fully loaded cost is roughly £36,000, or about £3,000 a month. Suppose they are producing around 60 per cent of what the role needs. That gap is worth in the region of £1,200 a month — call it £14,400 over a year of not saying anything.

That is only the direct part. Add the hours you or a senior colleague spend correcting the work, the client goodwill spent on late delivery, and the effect on the person quietly picking up the slack, and the twelve-month cost of avoiding a twenty-minute conversation is normally several times the number above. Run the same arithmetic on your own figures before you decide the conversation is not worth the discomfort.

The mistakes to avoid

• Waiting. Every week you wait makes the conversation bigger and your own tone worse.
• Being vague. If the person cannot repeat back what needs to change, you have not said it.
• Doing it in front of others. Correcting someone in a group buys you nothing and costs you their trust.
• Not following up. No review date means no conclusion, ever.
• Accepting the first flicker of improvement as resolution. Two good weeks is not a fixed problem.
• Promoting or reorganising around it. Moving someone sideways to avoid a conversation is the most expensive way of not having it.

Performance management is a leadership skill rather than an HR function, and like any skill it improves with practice and honest feedback. It is one of the areas leadership coaching works on directly, usually starting with the conversation you have been putting off for months. If the underlying problem is that too much runs through you in the first place, our guide to building a high-performing team and the post on what good delegation looks like are the natural next reads.