You interview. You check credentials. You check references. As a business owner, you do your absolute best to hire the right people with the right skills for your small business and the company culture you’re nurturing.

Yet no matter how hard you try, sometimes you hire people who won’t do their jobs. Or you find that longer-term employees don’t want to do their jobs anymore for a range of reasons that may or may not include lack of motivation, an interest in incentives or perks, job satisfaction, work-life balance, well-being, a desire for new skills, or personal issues.

This happens more frequently than you might think. In 2022, Gallup quarterly surveys revealed that the ratio of engaged to actively disengaged workers in the US was 1.8-to-1, down from 2.1-to-1 in 2021 and 2.6-to-1 in 2020. That was the lowest ratio since nearly a decade earlier.

According to Culture Amp research, there are three main reasons your underperforming employees may not be meeting expectations:

  • They don’t know how to achieve their goals, and without a strategy, they lose motivation.
  • They’re not committed, because they feel like they’re in the wrong role.
  • They lack managerial support.

The root cause cause for the poor performance and lack of employee engagement could be something you could remedy within the work environment or with mentoring, if that’s something the employee has expressed they want. But before you take any action jumping into solutions, you need to address the employee performance issues head-on.

Not addressing it can cost you: $3,400 for every $10,000 an average disengaged employee earns per year, shares Zippia, an online recruitment services company.

So what should you do with an employee with performance problems?

Most leaders do the obvious:

All the usual steps.

That’s what you should do too, both to give an underperforming employee every chance to succeed—and to create a clear paper trail in case you eventually need to terminate that employee.

But don’t stop there. You should be providing frequent feedback that is meaningful. Employees that receive it are almost four times more likely than other employees to be engaged, reports Gallup. You can leverage the STAR method, which can be used to deliver positive or constructive feedback. The acronym stands for:

  • Situation/Task: Provide context for what’s being discussed.
  • Action: Cover how the situation was handled.
  • Result: Share what occurred as a result of the actions that were taken.

In addition, you can try a few of these counterintuitive steps to turn around an underperforming employee.

1. Even though you may not want to … compliment them

When an employee underperforms—especially to an extreme degree—it’s easy to view them through the lens of their performance. But poor job performance in one area, even a key area, is just one part of the whole employee.

Personal example: I tried out for the wrestling team in the ninth grade. I was nervous, scared, intimidated … pick any fearful adjective, and that was me.

And I was terrible.

A week or so into practice, I heard our coach talking to one of the seniors. “That kid there,” he said, meaning me, “Will be a state champion by the time he’s a senior.”

I’m not sure why he said it. (Plus he was wrong; I wasn’t.)

But in that moment, I instantly felt more confident, more self-assured—and incredibly motivated. Those feelings lasted for a long time. Someone believed in me.

When an employee is struggling, don’t pretend they’re not. Deal with the performance issues that exist. But also try to find a way to show you see something in them, something they might not even see.

Belief, founded or unfounded, is incredibly powerful. And might create the spark a person needs to turn their performance around.

2. Even though you may not want to … ask them to train another employee

When we train co-workers, when we show people how to do something, several cool things happen—for the teacher. Trainees implicitly show they respect the person giving the advice. They show they respect the trainer’s experience, skill, and insight.

And the teacher gets a self-esteem boost that comes from being in a position to make a difference in another person’s life.

This way, a struggling employee feels like what they do matters, and will care about what they do, and the difference they can make. You could ask them to onboard a new hire or give an employee looking to get promoted a glimpse into what they do.

Like many things in life, we do our best when we know our work has meaning.

Training another person may give an underperforming employee a sense of pride that extends to the rest of their duties.

And will help them feel more a part of, and more responsibility to, the rest of the team.

3. Even though you may not want to … praise effort, not just results

Research on achievement and success by Stanford psychologist Carol Dweck shows that people tend to embrace one of two mindsets regarding talent:

Fixed mindset

This is the belief that intelligence, ability, and skill are inborn and relatively fixed. We “have” what we were born with. People with a fixed mindset typically say things like:

“I’m just not that smart,” or “Data analysis is just not my thing.”

Growth mindset

This is the belief that intelligence, ability, and skill can be developed through effort. We are what we work to become. People with a growth mindset typically say things like:

“If I put in a little more time, I’ll get it,” or “That didn’t go too well. I need to try again.”

That difference in perspective can be molded by the kind of praise we receive, and that often starts when we’re kids. For example, say you’re praised in one of these ways:

  • “Wow, you figured that out so fast. You are so smart!”
  • “Wow, you are amazing. You got an A without even cracking a book!”

Sounds great, right? The problem is that other messages are lurking within those statements:

  • “If I don’t figure things out fast, I must not be very smart.”
  • “If I do have to study, I’m not amazing.”

The result is a fixed mindset. We begin to believe we simply are what we are. And when the going gets tough and we struggle, we naturally feel helpless because we think what we “are” isn’t good enough.

And when we feel helpless—when we feel we aren’t good enough—we stop trying.

When you praise employees only for achievements, or criticize for short-term failures, you help create a fixed mindset environment.

Find ways to praise effort and not just achievement as part of your positive feedback. Find ways to critique effort, not just failure. It’s possible an underperforming employee believes they simply can’t do the job.

And that might be occasionally true. A particular employee may never be able to do a certain job well.

But they can always try to do the job well.

4. Even though you may not want to … give them respect

In the end, an underperforming employee may need to be let go.

Still, regardless of their level of performance, every employee needs and deserves to be treated with respect.

Sarcasm, eye rolling, and biting comments all chip away at a person’s self-esteem.

Deal with the behavior, deal with performance, deal with actions and outcomes… but always allow the person to maintain their sense of dignity, even in the worst of circumstances.

You may have to fire an employee. But you never, ever have to demean or humiliate that employee.

5. Even though you may not want to … put them in charge of something

We all love to feel that special sense of teamwork and togetherness that turns a task into a genuine mission, and a group of individuals into a real team.

And we all love to feel like we played an important role as a team member.

Engagement and satisfaction are largely based on autonomy and independence. Employees care the most when something feels like it’s “theirs.” They care the most when they feel they have the responsibility and authority not just to do what they’re told, but to do what they feel is right.

Try it. Put an underperforming employee in charge of something, however small.

  • If you own a barre studio, it might be a short-term task force to help increase class sign-ups.
  • Or it could be a minor (but still important) initiative to sell more products by the check-in desk.

Create guidelines and then give your employee the freedom to accomplish the task their way. That alone could turn “I have to” into “I want to.”

The job will become much more meaningful—an outward expression of that person’s skills, talent, and experience.

And if they do poorly, in a way, that’s okay.

You will have given them a great opportunity to perform well. If they don’t, you’ll have concrete evidence to show that they’re not the right fit for the job, or possibly, even for your company.

Jeff Haden Jeff Haden is a writer, speaker, small business management expert, and Inc.’s most popular columnist. He's the author of The Motivation Myth: How High Achievers Really Set Themselves Up to Win.
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