Managing underperformance means identifying a gap between expected and actual performance, raising it early and specifically, providing genuine support, and formalising the process only if informal conversations do not produce change. The sequence matters more than the paperwork.
Most guidance on this topic is written from a legal-risk perspective and starts at the formal stage. That is the wrong starting point. By the time a performance improvement plan is issued, the cheapest and most effective interventions have already been missed.
What counts as underperformance?
Underperformance is a sustained gap between what a role requires and what someone is delivering. It is not a bad week, a single mistake, or a personality clash.
| Is underperformance | Is not underperformance |
|---|---|
| Repeatedly not meeting a stated standard | A one-off error |
| Not completing core duties of the role | Working differently to how you would |
| Behaviour inconsistent with agreed expectations | A personality you find difficult |
| Capability gaps that persist after training | A gap in training you never provided |
| Sustained decline against a previous baseline | A temporary dip during a known life event |
The distinction matters because the response differs entirely. Misconduct is a separate process. A capability gap you never trained for is an organisational failure wearing an employee’s name.
The five stages of managing underperformance
Stages one and two resolve most situations. Organisations that jump to stage four usually have managers who avoid difficult conversations until they become formal problems.
Stage 1 — Check yourself before you raise it
Four questions before the first conversation. Each of them removes a proportion of apparent underperformance that is not underperformance at all.
Was the expectation actually stated? Not implied, not obvious to you, but said out loud or written down. A surprising share of performance disputes originate here.
Have they been trained? Being expected to do something you were never shown is a common frontline problem, particularly for casuals who joined during a busy period.
Do they have what they need? Equipment, information, access, time, a roster that makes the task possible.
Is something else going on? Sustained decline against a previous baseline usually has a cause. Asking is not intrusive; assuming is.
Stage 2 — The informal conversation
This is the highest-leverage moment in the whole process and the one most often skipped.
Have it privately, soon after you notice, and keep it short. Describe the observable behaviour and its impact, then ask before you tell. There is frequently a reason you do not know about.
| Judgement (triggers defensiveness) | Observation (opens a conversation) |
|---|---|
| “You need to be more professional” | “When you took that call at the counter, the customer overheard it” |
| “Your attitude has been poor” | “You’ve been quiet in the last three team briefs — what’s going on?” |
| “You’re not pulling your weight” | “The close checklist was incomplete on Tuesday and Thursday” |
| “You’re too slow” | “Service times on your section are averaging twice the others” |
Open with a question, not a statement. “I’ve noticed the close checklist has been incomplete a few times — what’s happening there?” produces information. “The close checklist keeps being incomplete” produces a defence. The information is what lets you fix it.
Stage 3 — Support with a timeframe
If the informal conversation identifies a genuine capability or clarity gap, agree specific support and a date to check back. Write it down — not as a formal document, but so both people remember what was agreed.
Support that is real: additional training, shadowing a strong performer, a mentor, temporarily adjusted duties, clearer written instructions, a different roster pattern. Support that is not real: “let me know if you need anything.”
Prosper Performance Management Document the conversations before you need them Notes from every one-to-one carry forward and stay attached to the employee record. If a situation ever becomes formal, the history of what was raised, when, and what support was offered already exists — instead of being reconstructed from memory. See how Prosper keeps the recordStage 4 — Formalising with a performance improvement plan
A performance improvement plan formalises a conversation that has already happened informally several times. A PIP that arrives without warning is a management failure, not an employee one.
Four things make a PIP defensible and genuinely useful:
- A precise description of the gap, with examples and dates
- A clear definition of acceptable performance — what specifically would need to be true
- The support the organisation will provide, and then actually providing it
- A realistic timeframe, typically 30 to 90 days depending on the role and the gap
Meet weekly during the plan rather than once at the end. A PIP with no contact until the review date is an assessment, not an improvement process — and everyone involved knows the difference.
Using a PIP purely to build a paper trail toward dismissal. Where the support is genuine and the standard achievable, a meaningful proportion of performance improvement plans end with performance recovered. Where the outcome is predetermined, employees can tell, and the process damages the trust of everyone watching it.
Stage 5 — Making the decision
Four possible outcomes at the end of a formal process.
| Outcome | When it applies |
|---|---|
| Improvement sustained | Standard met and held. Close the plan formally and say so. |
| Extend | Genuine progress but not complete. Only where more time will plausibly finish the job. |
| Redeploy | The person is capable but the role is wrong. Frequently the best outcome and frequently overlooked. |
| End employment | Standard not met after genuine support. Seek your own advice on process before acting. |
Australian employers should be aware that documented performance management is relevant to the fairness of any subsequent dismissal. The Fair Work Ombudsman publishes guidance on managing underperformance. This article is not legal advice — get your own before acting.
Underperformance in frontline and multi-site teams
Three complications that office-based guidance does not address.
Multiple supervisors. Someone working across venues may be assessed by three different people with three different standards. Before raising underperformance, check whether the issue appears everywhere or only under one supervisor. If it is one, the problem may not be the employee.
No private space. A performance conversation in a venue with no office is genuinely difficult. Before service, in a quiet corner, is better than in the middle of a shift or not at all.
Casual employment. Reducing someone’s shifts instead of having the conversation is common, quietly punitive, and carries its own risks. Have the conversation.
Common mistakes
Waiting. The single most damaging one. A conversation at week two is small. The same conversation at month six is a formal process.
Describing personality instead of behaviour. “Attitude” cannot be improved because it cannot be defined. Behaviour can.
Offering support you do not provide. This undermines the entire process and is visible to everyone.
Setting a standard a strong performer would struggle to meet. If the bar is unreachable, the plan is not an improvement process.
No record of the informal stage. When the situation escalates, the months of quiet conversations that did happen are invisible.
See it in practice Give every manager the same process One-to-one templates, documented notes that carry forward, and completion visible by manager and site — so difficult conversations happen early enough to still be conversations. Explore Prosper Performance ManagementFrequently asked questions
A sustained gap between what a role requires and what someone is delivering. A one-off error, a temporary dip, or working differently to how you would are not underperformance.
Check the expectation was stated and training provided, raise it informally and early with specific observations, agree genuine support with a timeframe, formalise only if nothing changes, then decide. Most situations resolve at the informal stage.
Underperformance is not meeting a required standard, usually through capability, clarity or circumstance. Misconduct is a breach of conduct rules or policy. They follow different processes.
Usually 30 to 90 days depending on the role and the nature of the gap. It must be long enough for genuine improvement to be demonstrated, with weekly contact throughout rather than a single review at the end.
Only after informal conversations have been had and have not produced change. A performance improvement plan that arrives without prior warning indicates the manager avoided the issue, not that the employee failed to respond.
Describe the observable behaviour and its impact, then ask what is going on before explaining what needs to change. Ask before you tell — there is frequently a reason you do not know about.
It is common practice and a poor one. It avoids the conversation, is visible to the rest of the team, and carries its own risks. Have the conversation instead.
Yes, including the informal ones. Without a record, months of quiet conversations that genuinely happened become invisible if the situation ever escalates.
Have the conversation early, and have the record
One-to-one notes that carry forward and stay attached to the employee record — so if a situation ever becomes formal, the history already exists.