How to Handle Underperformance Fairly

Before you assume it's a performance problem

Underperformance in a small team is genuinely less common than it looks. Work through the more likely explanations first: was the expectation actually communicated clearly, was there sufficient training or induction for the task, did the person have the authority they needed to act, and is there an external blocker — a broken tool, an unclear brief, insufficient time — that's causing the gap rather than the person's ability or effort.

This isn't about giving people endless benefit of the doubt regardless of the facts. It's about being genuinely rigorous before you commit to a conclusion that will shape a difficult and potentially formal process. Getting this wrong in either direction costs you — treating an expectations gap as a performance problem damages trust unfairly, while treating a genuine performance problem as a temporary blip for too long lets it damage the business and the rest of the team.

The informal conversation

If the more likely explanations have been ruled out and a genuine gap remains after a fair period, the next step is a direct, honest, private conversation. Describe the specific gap between what's expected and what's happening, using concrete examples rather than generalisations, and ask for their view on what's causing it. Their answer might reveal something you hadn't considered — a personal circumstance, a skills gap they haven't admitted to, a workload problem.

Agree what improvement looks like, over what timeframe, and what support will be provided — training, adjusted workload, closer check-ins. Even at this informal stage, write a brief note of what was discussed and agreed, with the date. This isn't about building a case against someone; it's good practice that protects both of you if the situation doesn't improve and also serves as a record of what support was actually offered.

Document the informal conversation even though it's informal. A one-line note with a date is far better than trying to reconstruct what was said months later.

Giving a fair and reasonable improvement period

What counts as a fair improvement period depends on the role and the nature of the gap, but it should give a genuine, realistic opportunity to improve — not a token few days designed to fail. During this period, provide the support agreed in the informal conversation and check in more regularly than usual, rather than setting the period and walking away until it ends.

Keep a simple record of progress during the period: what's improved, what hasn't, and any further support provided. This record matters if the situation needs to move to a formal process, and it also protects the employee by showing clearly what genuine opportunity and support were provided.

Moving to a formal process

If the standard still isn't being met after a fair informal process and a genuine improvement period, or if the situation is serious enough to warrant a formal process from the outset, you are now in territory where getting the process right matters both practically and legally. Employment law sets out requirements around fair process, and getting it wrong can expose a small business to a tribunal claim regardless of how justified the underlying performance concern actually was.

Acas publishes a formal Code of Practice on disciplinary and grievance procedures, and a tribunal will consider whether that code was followed if a dismissal is later challenged. A formal process typically involves a written invitation to a meeting explaining the concern, the right to be accompanied, a genuine opportunity to respond, a considered decision, and the right to appeal. The exact steps and current requirements should always be confirmed directly against Acas and GOV.UK guidance at the time, rather than relied upon from memory of how it worked in a previous job or business.

1. Written invitation to a formal meeting, setting out the concern in enough detail to respond to
2. The right to be accompanied by a colleague or trade union representative
3. A genuine hearing where the employee can respond and put their case
4. A decision made after proper consideration, communicated in writing with reasons
5. A right of appeal, heard where possible by someone not involved in the original decision

Why you should take independent advice at this stage

This guide describes the shape of a fair process at a practical level, but it is not a substitute for current, specific legal or HR advice, and employment law and Acas guidance are updated periodically. Before issuing a formal warning, extending a formal process, or considering dismissal, confirm the current procedure directly with Acas — their helpline and website guidance are free — and take independent HR or legal advice if the situation is at all complex, if the employee has raised a grievance, or if you are at all unsure.

The cost of a short piece of professional advice is almost always smaller than the cost, in time, stress and potential liability, of getting a formal process wrong.

I am not a lawyer or HR professional. Anything that could lead to a formal warning or dismissal should be checked against current Acas and GOV.UK guidance, or with a qualified adviser, before you act.

Protecting the rest of the team through the process

In a small team, everyone usually notices when a colleague's performance is being addressed, even if the details are kept confidential — which they should be. Keep the specifics private, but don't be afraid to acknowledge to the wider team, in general terms, that something is being handled, if morale or workload distribution is visibly affected. Silence combined with obvious strain tends to breed speculation that's often worse than a brief, appropriately vague acknowledgement.

If the process results in the person leaving, plan honestly for how their work will be covered in the short term, and be straightforward with the remaining team about the transition without breaching confidentiality about the reasons.

Common mistakes with underperformance in small teams

A handful of patterns come up again and again and are worth checking against your own approach.

• Jumping straight to a formal process without a genuine informal conversation and improvement period first
• Not writing anything down until a formal process is already underway
• Giving an improvement period that is too short to be realistic
• Relying on memory of 'how it worked' at a previous employer instead of checking current Acas guidance
• Proceeding without independent advice on a genuinely complex or contested situation