The Cost of an Under-Performing Employee & How to Identify Poor Performers

Most managers heading up teams of customer-facing employees would love to avoid common issues like declining customer satisfaction, lagging sales performance, and the toxic presence of employees who are chronic under-performers.

It’s easy to understand why firing under performers might be difficult in some cases, especially in customer support environments where finding and training replacements is often challenging and time-consuming.

Keeping poor performers around, though, is both a huge time suck for management, and a profit-killer for your business. Nevertheless, many organizations are reluctant to adequately address this incredibly prevalent issue.  

{{cta(‘bb5f60c2-b420-44bb-af8d-f75c3007ab39’)}}Even more concerning is the fact the many of these businesses do not fully understand the long-term effects poor performers can have on productivity, employee retention, and overall profits.


Defining Poor Employee Performance

The first step to solving the problem of poor performers is learning how to identify them. What constitutes under performance in your particular business depends on certain factors (i.e., your company’s expectations of its workers and your criteria for evaluating performance) the National Business Research Institute (NBRI) has identified six main work characteristics of a poor performer:

  • Poor work quality
  • Attendance problems
  • Poor attitude
  • Inability to work with a team
  • Fails to meet deadlines
  • Multiple customer complaints

Keep in mind, your workers are human. Most employees are going to have a few days with low numbers, and most of them will probably miss a deadline once in a while. The consistent presence of several of these characteristics, however, should raise some red flags.

The Cost of Poor Work Performance

Keeping even one under-performing employee around is far from harmless. Low-performing employees in the workplace can do some widespread damage, as their reach extends in to many areas of your business, including:

  • #1: Employee Morale ‘ According to Yale professor, Sigal Barsade, poor employees have the ability to create a ripple effect throughout the entire workplace. In her article, “The Ripple Effect: Emotional Contagion and Its Influence on Group Behavior,” Barsade states that just one underperformer can decrease employee morale greatly, and spread apprehension and anger throughout the workplace. Ultimately, this can lead to your top performers looking for employment elsewhere and decrease your employee retention rate.
  • The Cost of Keeping Poor Performers#2: Customer Service Quality ‘ If your poor performers have direct contact with your customers, this problem could be dramatic. Before the internet and social media, consumer problems were dealt with on an individual basis. Today, just one bad experience with a customer could be recounted to hundreds or thousands of other customers instantly. This could spur a wave of customer relations problems.
  • #3: Company Profits ‘ The bottom line is that poor performers cost your company money. Not only is their productivity level lowered, but their bad behavior could directly affect the production level of those working around them. In addition, supervisors have to spend valuable time overseeing the bad employees, correcting mistakes, or trying to boost the morale of the other workers.

Solutions for Dealing with Poor Performance

Unfortunately, it only takes one bad employee to affect the rest of the team and to drain the abilities of your company’s most valuable resource ” your workforce. Consistently high performance requires hiring employees who have the motivation, skills and abilities to contribute value to your business. It’s important to ensure new hires share the values of your organization, and that they clearly know what is expected of them.

Check Your Performance Reviews

Most companies use standard performance reviews to weed out bad employees, however, according to a LinkedIn report, 77% of human resource executives do not feel that evaluations adequately identify poor performers. Immediate feedback, even negative feedback, when done correctly, seems to be more effective. A history of continuous negative feedback is a good indicator of problematic work behavior.

Determine the Root Cause

The next step is to determine why the negative behavior is occurring. Everything from a poor culture fit to lack of skills, abilities, and motivation to fear of failure can affect cause an employee to underperform.

A review and warning process must be in place and adhered to by all your managers. If the employee refuses to adjust their behavior to meet your workplace needs, termination may be necessary.

Measure Performance During Your Talent Selection Process

The best way to deal with poor performers?  Avoid hiring them in the first place.

A survey conducted by NBRI found that 43% of HR executives said that they hired the wrong employees because they needed to fill the job quickly. This lack of careful planning could end up costing these companies thousands of dollars in training and retraining.

HR companies that specialize in employee talent selection tools like pre-hire assessments understand that hiring top performers takes a combination of business, technology, and psychology.

By intertwining these recruitment techniques, they are able to match prime candidates with top employers successfully. This takes the guesswork out of the hiring process and greatly improves your rate of hiring the right employee the first time, helps decrease employee attrition rates, and, in the end, will save your company money and boost profits.