Most managers know when someone on their team is underperforming long before they say anything. The conversation feels awkward, so it gets delayed, and the problem grows. By the time it’s addressed, the employee is surprised and the manager is frustrated.
This guide covers how to manage an underperforming employee, from finding the cause to agreeing on a plan and, if needed, a formal performance improvement plan. It also draws on 1,588 AI roleplay conversations in which managers practiced performance conversations on VirtualSpeech. They show which parts of the conversation people handle well, and which they get wrong.
The short answer:
- Act early.
- Find out why the performance has dropped.
- Describe the gap with specific examples.
- Ask for the employee’s view.
- Agree a plan together.
- Follow up in writing.
Many performance problems can be fixed with a clear conversation and the right support, before any formal process is needed.
What counts as underperformance?
An employee is underperforming when their work consistently falls below clear, agreed expectations. That could mean missed targets, poor-quality work, missed deadlines, or behavior that affects the team.
The key words are “consistently” and “agreed”. One bad week is not underperformance. Falling short of expectations that were never made clear is a management problem, not a performance problem.
Why employees underperform
Before you plan the conversation, consider the likely cause. The fix depends on it.
| Cause | Signs | What usually helps |
|---|---|---|
| Unclear expectations | Works hard on the wrong things; surprised by feedback | Reset goals and what good looks like, in writing |
| Skills or knowledge gap | Struggles with specific tasks; new to the role | Training, coaching, pairing with a colleague |
| Low motivation or engagement | Was strong before; less initiative, more absence | A one-on-one about what has changed; recognition; better-fit work |
| Workload or resources | Quality drops across the board; long hours | Reprioritize, remove blockers, adjust deadlines |
| Personal or health issues | Sudden change; distracted or withdrawn | Support, flexibility, and HR or employee assistance |
| Poor role fit | Long-term struggle despite support | An honest conversation about a different role or a formal process |
You won’t always know the cause before the conversation. That’s why asking questions is part of the process, not an extra.
How to manage an underperforming employee: 7 steps
1. Check that the expectations were clear
Look at what the employee was asked to do: their goals, targets, job description, and anything agreed in past one-on-ones. If the expectations were vague or changed often, start by resetting them, not by criticizing performance.
2. Gather specific examples
Note two or three recent, concrete examples, with dates, results or work samples. “Your reports have been late” is easy to dispute. “The last three weekly reports arrived on Thursday instead of Monday” is not.
3. Prepare how you’ll open
The opening sets the tone for the whole conversation. Plan your first two sentences: why you’ve asked to meet, and that you want to understand what’s happening and help. Hold the meeting privately, at a time when neither of you is rushed.
4. Describe the gap, and its impact
Use the SBI model: describe the situation, the behavior, and the impact on the team, customers or results. The impact is the part people most often leave out, and it’s what explains why the issue matters.
5. Ask for their view, and listen
Ask open questions before you suggest solutions:
- “How do you feel the last month has gone?”
- “What’s getting in the way?”
- “Is anything outside work affecting you?”
Listen actively, and check you’ve understood before moving on. This is where you find the real cause.
6. Agree a plan together
Agree on two or three specific actions, each with an owner and a date. Include the support you’ll provide, such as training, coaching or fewer competing priorities. Plans the employee helps shape are more likely to stick. A coaching structure like the GROW model can help.
7. Follow up and document
Send a short written summary the same day. Review progress in your regular one-on-ones, and recognize improvement when it happens. If there’s no improvement after a fair period, move to a formal process (see below).
What to say: example phrases
Opening the conversation:
- “I’d like to talk about how the last few weeks have gone. I want to understand what’s happening and work out how I can help.”
- “I’ve noticed a change in the sales numbers, and I wanted to talk about it with you before it becomes a bigger issue.”
Describing the gap:
- “In the last three client calls, the follow-up emails went out a week late. Two clients have chased us, which puts the renewals at risk.”
Questions to ask an underperforming employee:
- “What do you think is behind this?”
- “What would make the biggest difference for you right now?”
- “What support do you need from me?”
- “What does success look like to you in this role?”
Agreeing next steps:
- “Let’s agree what we’ll each do before we meet again in two weeks.”
- “You’ve done strong work on X before. What helped then that we could use now?”
What 1,588 practice conversations show
We analyzed 1,588 AI roleplay sessions in which 796 people from 73 organizations practiced performance conversations on VirtualSpeech between May and October 2026. The four scenarios cover:
- a performance issue
- missed targets
- two versions of addressing poor performance
The AI plays the employee and scores the manager out of 10 on the skills each scenario needs.
How managers scored, by skill (English-language sessions):
| Skill | Average score (out of 10) | Share of sessions below 5 |
|---|---|---|
| Encouraging collaboration | 8.1 | 6% |
| Staying nonjudgmental | 8.0 | 4% |
| Creating a safe environment | 7.0 | 14% |
| Non-confrontational language | 7.0 | 15% |
| Offering appropriate support | 7.0 | 14% |
| Acknowledging concerns | 6.7 | 17% |
| Asking open-ended questions | 6.6 | 17% |
| Finding joint solutions | 6.5 | 17% |
| Active listening | 6.2 | 22% |
| Opening and tone | 5.7 | 35% |
| Valuing and motivating the employee | 5.7 | 31% |
| Using the SBI model | 5.0 | 41% |
Three findings stand out:
- Managers are kind, but not clear. They score highly for staying nonjudgmental and creating a safe space. But they score lowest on describing the problem precisely: 41% of sessions scored below 5 on the SBI model. The AI’s feedback often pointed to vague examples and a missing impact.
- The opening is often missed. In 35% of sessions, the opening scored below 5. A common note was that the manager didn’t say why they wanted to talk, or went straight into the problem without checking it was a good time.
- People forget to motivate. In missed-targets conversations, valuing and motivating the employee was the weakest skill. Managers focused on the numbers and often didn’t mention the person’s past contribution or strengths.
Overall, the average score was 6.9 out of 10, and 27% of sessions scored 8 or above. Practice made a clear difference: 42% of people repeated a scenario, and their average rose from 6.4 on the first attempt to 7.1 on the second.
For how performance conversations compare with other difficult conversations, such as delivering bad news or layoffs, see our guide to difficult conversations.
When to use a performance improvement plan
A performance improvement plan (PIP) is a formal, written plan with specific goals and a deadline, usually 30 to 90 days. Use one when informal conversations and support haven’t worked, not as the first step.
A fair PIP includes:
- The gap: specific examples of where performance falls short.
- Targets: clear, measurable goals that define what improvement looks like.
- Support: the training, coaching or resources the employee will get.
- Check-ins: regular review meetings, usually weekly.
- Timeframe and outcome: the deadline, and what happens if goals are, or aren’t, met.
Involve HR before you start a PIP. The process and any legal requirements depend on your organization and country.
Deliver the PIP in a conversation, not by email. Explain why it’s being used, check the employee understands each goal, and make clear that the aim is improvement.
How to document performance issues
Good records protect both the employee and the organization, and make conversations fairer.
- Write down specific examples as they happen: dates, what happened, and the impact.
- Summarize each performance conversation in writing the same day, including agreed actions.
- Record the support you offered, and whether it was used.
- Keep notes factual. Avoid opinions about personality or motives.
Common mistakes when managing underperformance
- Waiting too long. Small issues are easier to fix. Delays make the eventual conversation harder and less fair.
- Being vague to be kind. “Things could be better” leaves the employee guessing. Be specific and kind at the same time.
- Assuming the cause. Low effort, a skills gap and a personal crisis can look the same from the outside. Ask first.
- Talking more than listening. If you do most of the talking, you won’t learn what’s really going on.
- Ending without a plan. Every performance conversation should end with agreed actions, owners and dates.
- Not recognizing improvement. When performance improves, say so. It shows the plan is working.
Training managers to handle performance conversations
Many managers are promoted for being good at their job, not for managing people. Performance conversations are often the first really hard conversations they face, and the ones they’re most likely to avoid.
For L&D teams, practice is the gap. Managers can read about SBI or GROW, but the difficult part happens live: opening the conversation, staying specific, and handling the employee’s reaction. With AI roleplays, managers can practice a performance conversation with a realistic employee, get scored feedback on each skill, and try again. The practice data above shows a clear improvement from the first attempt to the second.
VirtualSpeech’s leadership training packages these scenarios into manager programs, with reports showing how skills change across a cohort. For the wider skill set, see leadership skills for managers.
Frequently asked questions
How do you tell an employee they are underperforming?
Meet privately and say why you want to talk at the start. Describe specific examples using the SBI model (situation, behavior, impact), then ask for their view before suggesting solutions. End by agreeing two or three actions with dates, and confirm them in writing.
How long should you give an underperforming employee to improve?
For informal improvement, a few weeks to two months is typical, with regular check-ins. Formal performance improvement plans usually run for 30 to 90 days. The timeframe should be long enough to show real change in the specific goals.
What are the most common causes of poor performance?
The most common causes are:
- unclear expectations
- skills gaps
- low motivation
- too much work or too few resources
- personal or health issues
- a poor fit with the role
Each needs a different response, which is why asking questions is an essential step.
Should HR be involved in managing underperformance?
For informal conversations, HR doesn’t usually need to be in the room, but it’s worth letting them know. Involve HR before starting a formal process, such as a performance improvement plan or a warning, because the rules depend on your organization and country.
Can you motivate an underperforming employee?
Often, yes. Start by finding out what has changed. Recognize past good work, connect their goals to work they care about, and remove obstacles. In our practice data, valuing and motivating the employee was one of the skills managers most often missed.
What should I say when an underperforming employee gets defensive?
Stay calm and don’t argue the details. Acknowledge their feelings (“I can see this is frustrating”), restate the specific facts, and ask a question: “What’s your view of what happened?” If emotions run high, agree to continue the conversation the next day.
How we did this analysis
- Sample: 1,588 AI roleplay sessions on VirtualSpeech, from 1 May to 23 October 2026, across four performance scenarios:
- Performance Issue
- Missed Targets
- Employee Poor Performance
- Poor Employee Performance
- Who’s included: 796 people from 73 organizations. VirtualSpeech staff and shared or device logins were excluded.
- Skill scores: taken from English-language sessions (72% of the total), because the criteria are translated in other languages.
- Improvement figure: compares each person’s first and second attempt at the same scenario, for the 42% who repeated one.
- How scoring works: scores are given by AI against criteria for each scenario, not by human assessors.
- Different sample from the difficult conversations guide: our difficult conversations guide uses a different sample across eight scenarios, so its averages differ slightly.
