For your business to succeed, you need to work well with your people and have them work well for you. However, managing poor performance can be particularly difficult for business owners with a small or close-knit team. You need to ensure that everyone delivers while maintaining morale and relationships. Early awareness, clear communication and following a fair process are key.
You’ll avoid a lot of stress if you detect poor performance before it gets out of hand. Setting clear expectations means both you and your team have a shared starting point for what’s acceptable. One way to do this is by building processes that identify the steps and outcomes you're after. Inviting people to help build these processes can uncover barriers and instil a sense of ownership.
Early signs of slacking may not be as overt as absenteeism or disciplinary problems. Instead, you or other team members may notice a lack of engagement, over-dependence on others, or lack of teamwork. If you find yourself noticing this, communication is vital.
Open, candid conversations may be uncomfortable, but without them, wrong assumptions and misunderstandings can reign. A good place to begin is by seeking to understand your employee’s perspectives and challenges. They may only share these with you if they feel safe, so being earnest in your purpose is a must.
Your responsibility as a leader is to make sure your people have the training, tools and experience to meet expectations. Recognise that roles and the way your business runs can change over time. If this happens, you may need to upskill your team or equip them differently.
Coaching should be tailored to your workers’ own learning styles, skills and the tasks they need to perform. It’s important to be specific with any feedback – both positive and negative. Telling someone they did a good job is far too vague.
A handy framework for effective coaching is to name the situation, what they did and what happened as a result. As an example, you might say you liked the way they looked the customer in the eye, smiled and offered them a different solution; it led to a sale after all.
Don’t try to cover too much in one go, as people generally remember only three to five points. Start and finish with the information you most want people to take on board.
It’s helpful to both you and your staff to keep records of performance discussions, feedback, and improvement plans. It provides a strong point of reference for further action. You should keep the tone of the records aligned with the tone of your coaching and conversation.
A common mistake is to have a friendly, gentle conversation, followed up by a letter in intimidating legalese – that can undermine trust. Instead, keep both clear and straightforward. Employment.govt has some useful template letters for this.
If you choose to begin formal performance management, you’ll need to meet your obligations as an employer. You have a responsibility to be fair, follow legislation and act in good faith. Business.govt sets out timeframes and steps for a performance management process.
Managing an underperformer can take a toll on you as a business owner – especially if you have a smaller team. It’s one area where the support of a Business Mentor is invaluable. They understand what needs to be done but can offer you a place to share your own emotions about the process. Their experience in business gives them empathy you may not find elsewhere.
If you’re focused on building a business that thrives through a well-performing team, our Mentors are here to help. BusinessMentors.org.nz allows you to look for a potential match so you can draw on the expertise you need.
Managing underperformance requires a balance between care and accountability. As a business owner, creating an environment of trust and clarity is essential; it allows you to be proactive in managing performance and following a fair process. Supporting each individual to perform not only contributes to the health of your business but can also create collective success. And with that, we all win.