When an employee’s performance keeps slipping, the best first move is a direct, private conversation that names the specific gap, asks what’s getting in the way, and agrees on clear expectations and a timeline. Most small business owners wait too long, hoping it will fix itself. By the time they act, frustration has built up on both sides and the rest of the team has noticed.
This guide walks through how to figure out what’s really going on, how to address it fairly and in writing, and how to know when it’s time for a harder decision.
First, find out why performance is slipping
A drop in performance is a symptom, not a diagnosis. Before you decide how to respond, look at the likely causes:
- Unclear expectations. The employee may not know what “good” looks like, or the role changed and nobody said so.
- Skills or training gaps. They were promoted or moved into work they haven’t been taught to do.
- Workload or tools. They’re stretched too thin, or the systems they rely on are slowing them down.
- Manager or team problems. Conflict, poor communication or a lack of feedback is getting in the way.
- Disengagement. They’ve lost connection to the work, the team or the company’s direction.
- Something personal. A health issue, family situation or other life event may be affecting them.
That last one matters. If an employee mentions a health condition, a family need or a request for time off, it may involve leave or accommodation rights. Focus on the employee’s work and the support they may need rather than asking for personal medical details, and get HR advice before moving forward with discipline.
How to address slipping performance, step by step
- Talk early and privately. Don’t wait for the annual review. Raise it as soon as you see a pattern, in a one-on-one, not in front of the team.
- Be specific. Describe what you’ve observed, with examples and dates, and how it differs from what’s expected. “Three of the last five reports were late” lands better than “you seem checked out.”
- Ask, then listen. Find out what’s getting in the way before you offer solutions. The answer often changes the plan.
- Agree on clear expectations. Spell out what success looks like, how it will be measured and by when.
- Offer support. Training, coaching, clearer priorities or a workload adjustment can make the difference for someone who wants to improve.
- Put it in writing. Follow up with a short summary of what you discussed and agreed. For ongoing performance issues, a written performance improvement plan (PIP) can help clarify expectations, set measurable goals and schedule check-ins. Not every situation requires a formal PIP, so choose the approach that fits the circumstances and your company’s policies.
- Check in regularly. Meet on the schedule you agreed to. Recognize progress, and be honest if it isn’t happening.
Apply the same standards you’d apply to anyone else in the same role. Consistency is what makes the process fair, and it protects your business if the situation ends in termination.
When it’s time to consider termination
If you’ve been clear, offered reasonable support, documented the process and performance still hasn’t improved, it may be time to part ways. A fair, well-documented improvement process makes that decision easier to explain and less risky.
Before you act, check the timing. If the employee recently complained, requested leave or an accommodation, or returned from protected leave, get HR advice first. When you’re ready, our guide to terminating an employee in Colorado walks through the process.
Common mistakes small business owners make
- Waiting months to say anything, then reacting all at once
- Hinting at the problem instead of naming it clearly
- Having the conversation but never writing anything down
- Holding one employee to a different standard than others in the same role
- Treating it as only the employee’s problem when unclear expectations or management played a part
- Skipping follow-up, so the conversation never leads to change
Often, the real fix is better management
Many performance problems trace back to managers who were promoted for being great at their jobs but never taught how to lead people. They avoid hard conversations, give vague feedback or don’t set clear goals. Building those skills helps the whole team, not just one employee. When managers learn to coach employees before problems escalate, performance management becomes less about correcting mistakes and more about helping people succeed.
How Turning the Corner HR can help
For 15+ years, we’ve helped growing companies handle performance issues fairly and effectively, working alongside owners and managers, not instead of them. We can help you:
- Plan and prepare for a difficult performance conversation
- Write clear expectations and a performance improvement plan
- Build a performance management process your managers will actually use
- Train managers to coach, give feedback and hold people accountable through Fast Track Management Training
- Review a situation before you decide on discipline or termination
If an employee’s performance is slipping and you’re not sure what to do next, schedule a free one-hour HR consultation or call us at (720) 446-8876. Learn more about our fractional HR support.
Frequently asked questions
How do I talk to an employee about poor performance?
Meet privately, describe specific examples of the gap between what’s expected and what’s happening, ask what’s getting in the way, and agree on clear next steps and a timeline. Follow up in writing.
What is a performance improvement plan?
A performance improvement plan, or PIP, is a written plan that outlines specific performance gaps, the expectations the employee needs to meet, the support you’ll provide and the dates you’ll check in. It gives the employee a fair chance to improve and documents the process.
How long should I give an employee to improve?
There’s no universal timeline. Some issues can improve quickly, while others need more time, training or support. Performance improvement plans often use 30, 60 or 90-day timelines, but the right timeframe depends on the role, the concern and what meaningful improvement looks like.
Should I document employee performance problems?
Yes, as a best practice. Document specific concerns, conversations, expectations, support offered and follow-up. Good documentation helps employees understand what’s expected and supports consistent decisions if further action becomes necessary.
What if my managers are the problem?
That’s common, especially when great individual contributors are promoted without training. Manager training and coaching can help them set expectations, give useful feedback and handle hard conversations, which improves performance across the team.