Poor performance in the workplace rarely arrives without warning. Before a formal process begins, before the HR conversation, and well before anyone considers their legal obligations, there are usually weeks or months of quiet signals that something is not right. A deadline slipped here. An attitude shift there. A team member who used to speak up in meetings who now sits in silence.
Most managers notice these signs. Far fewer act on them quickly. And that gap between noticing and acting is where a manageable situation becomes a costly one.
Research from Gallup’s 2026 State of the Global Workplace report found that only 20 per cent of employees worldwide were engaged in 2025, with disengagement costing the global economy an estimated $10 trillion in lost productivity. Closer to home, a Gartner survey of Australian workplaces found that employee engagement dropped to a three-year low of 19.6 per cent in late 2024, with manager quality and people management ranking among the top three reasons Australian employees intended to leave their jobs (Gartner Global Talent Monitor, 2025).
The connection is direct: how managers handle early signs of poor performance shapes whether their teams stay engaged, stay productive, and stay at all.
This article walks through what poor performance actually looks like in practice, the early warning signs every manager should know, why employees underperform, and how to address employee performance issues in a way that is fair, practical, and legally sound.
Why It Is Important to Identify Poor Performance Early
Leaving poor performance unaddressed is not a neutral position. It is a choice with real consequences, and those consequences tend to compound the longer the situation runs.
Impact on Productivity
An underperforming team member does not just reduce their own output. Their work creates downstream effects: tasks that need to be redone, deadlines that slip, and decisions that get delayed. According to Gallup, disengaged employees cost organisations approximately 18 per cent of their annual salary in lost productivity. For a team of ten, one persistently underperforming employee can absorb a disproportionate amount of collective capacity.
Effect on Team Morale
High-performing employees notice when poor performance goes unaddressed. They see the imbalance. They do the extra work. And over time, they start asking themselves why they bother. The Australian HR Institute (AHRI) has found that poor workplace culture, frequently driven by inconsistent management, is linked to up to 30 per cent higher staff turnover. A team that watches a manager overlook poor performance loses faith in both the manager and the organisation.
Increased Workload for High Performers
When one team member consistently fails to pull their weight, other team members compensate. That redistribution of work is rarely acknowledged, rarely rewarded, and rarely sustainable. It builds resentment, drives burnout, and accelerates the departure of the people an organisation can least afford to lose.
Risk of Turnover and Workplace Conflict
High turnover costs Australian businesses an average of $30,000 per employee in recruitment, training, and lost productivity, according to the Australian HR Institute (AHRI, 2023). When poor performance is consistently ignored, it contributes to the conditions that drive good employees out. It also increases the risk of conflict, as frustration builds and interpersonal tensions escalate.
Importance of Timely Intervention
The Fair Work Ombudsman is clear on this point: underperformance issues should be addressed straight away, as early intervention makes issues easier to resolve and helps avoid more serious problems down the track (Fair Work Ombudsman, Managing Underperformance Best Practice Guide).
Timely intervention protects the organisation legally, protects the broader team culturally, and gives the underperforming employee the best possible chance of turning things around.
Before addressing poor performance, managers need to be clear on what it actually looks like. Poor performance is not a personality issue. It is a measurable gap between expected standards and actual output or behaviour.
Missed Deadlines and Incomplete Work
Work that consistently arrives late, incomplete, or requires significant rework is one of the clearest indicators of a performance problem. One missed deadline in a pressure situation is human. A pattern of missed deadlines, particularly when expectations have been clearly communicated, is a performance issue that warrants a direct conversation.
Declining Quality of Work
A gradual deterioration in the standard of work is often more insidious than a single obvious failure. When output that was once reliable starts to require correction, when reports become cursory, or when attention to detail drops noticeably, these are early warning signs of poor performance that should not be dismissed as a temporary rough patch.
Reduced Productivity
An employee who was previously productive but whose output has noticeably decreased without an obvious external explanation may be struggling with skills, motivation, or personal challenges. Reduced productivity in the workplace is worth exploring through a direct, supportive conversation before it becomes a formal issue.
Poor Communication and Responsiveness
Employees who stop responding promptly, disengage from team communication, or become difficult to reach during working hours may be signalling disengagement or distress. Poor communication from an employee who was previously responsive is a behavioural change worth noting.
Negative Attitude or Workplace Behaviour
A persistently negative attitude, passive resistance to change, or behaviour that undermines team cohesion falls within the scope of workplace performance. It is distinct from misconduct but can be equally damaging to team culture if left unaddressed.
Spotting poor performance early depends on a manager’s ability to observe patterns rather than react to single events. Here are the ten most common early warning signs.
1. Increased Errors and Mistakes
An uptick in errors, particularly in work the employee has handled competently before, often signals something has shifted. It could be a skill gap, a change in motivation, or something happening outside work. The cause matters, but the pattern needs to be acknowledged.
2. Missed Deadlines
As discussed, a recurring pattern of deadlines missed or work submitted late is one of the most reliable indicators of a performance concern. Managers should document these occurrences and raise them early through a managing poor performance conversation before they accumulate into a formal case.
3. Lack of Initiative
Employees who previously brought ideas to the table, volunteered for projects, or proactively flagged risks, but who have stopped doing so, may be withdrawing from their role. Lack of initiative is a common early sign of disengagement that often precedes more visible performance issues.
4. Frequent Absenteeism
Disengaged employees cost organisations an estimated 18 per cent of their annual salary in lost productivity, and disengaged workers are significantly more likely to be absent, according to Gallup research. Patterns of unplanned leave, Monday and Friday absences, or medical leave that clusters around performance conversations are worth noting alongside other warning signs.
5. Reduced Engagement
Qualtrics’ 2025 Employee Experience Trends Report, which surveyed over 35,000 employees across 32 countries, found that Australian workplaces rank among the bottom 20 per cent globally on employee engagement, intent to stay, and overall experience. At the individual level, reduced engagement shows up as silence in meetings, lack of contribution during collaborative work, and a noticeable shift in the employee’s emotional investment in their role.
6. Declining Customer Service Standards
For employees who deal with customers or clients, a drop in service quality is an important performance indicator. Complaints, negative feedback, or a reduction in the warmth and professionalism that previously characterised an employee’s interactions should be raised directly and promptly.
7. Difficulty Working with Others
A team member who starts avoiding collaboration, generating friction with colleagues, or responding defensively to routine requests may be experiencing difficulty that is affecting their performance. Interpersonal issues that go unaddressed frequently escalate into workplace conflict.
8. Resistance to Feedback
An employee who dismisses, deflects, or becomes hostile in response to constructive feedback is displaying a behaviour that makes improvement significantly harder. Resistance to feedback is itself a performance indicator and should be addressed directly, with support from critical conversations training for managers who find these discussions challenging.
9. Missed Goals and KPIs
Consistently missing agreed targets or key performance indicators is the most measurable form of underperformance. Where KPIs are in place, managers should review them regularly and raise concerns as soon as a pattern emerges rather than waiting for the end of a review cycle.
10. Changes in Behaviour or Attitude
Significant shifts in an employee’s demeanour, communication style, or general attitude, particularly when they are out of character, can signal that something is wrong. This might be a personal issue, a workplace conflict, or early-stage disengagement. A supportive, private conversation is always the right first step.
Understanding why an employee is underperforming changes how a manager should respond. Poor performance in the workplace rarely has a single cause, and assuming the worst before exploring the reality is one of the most common management mistakes.
Lack of Skills or Training
An employee placed in a role without adequate preparation will underperform. This is a management and organisational problem as much as an individual one. Before attributing performance issues to attitude or effort, managers should honestly assess whether the employee has been given the skills, resources, and context they need to succeed. Performance management training helps managers develop the judgement to distinguish between a training gap and a conduct issue.
Unclear Expectations
The Fair Work Ombudsman identifies unclear expectations as a key driver of underperformance, noting that effective performance management starts with ensuring employees understand exactly what is required of them. If the expectations were never made clear, the performance conversation must start with clarification, not accountability.
Personal Challenges
Health issues, family pressures, financial stress, and mental health challenges affect performance. They do not excuse sustained underperformance, but they do inform how a manager should approach the conversation. A compassionate, private discussion is far more likely to produce a constructive outcome than a formal process initiated without any attempt to understand what is happening for the employee.
Poor Leadership or Support
Gartner’s research found that manager quality and people management remained in the top three reasons Australian employees intended to leave their jobs, for the second consecutive quarter as of late 2024. Poor leadership, including vague direction, inconsistent expectations, and inadequate support, is itself a driver of underperformance. Managers who invest in their own development through leadership management training build the skills to prevent many performance issues before they start.
Workplace Conflict
Unresolved conflict between team members, or between a team member and their manager, frequently manifests as reduced performance. An employee in a conflicted environment may withdraw, disengage, or redirect their energy into navigating the conflict rather than their work.
Low Motivation or Engagement
Motivation varies across careers, roles, and life stages. An employee who is bored, unchallenged, or who has simply lost connection with the purpose of their work will typically underperform in ways that are difficult to address through accountability alone. Understanding what motivates each team member is a core leadership skill.
Once poor performance is identified, the way a manager responds determines the outcome. The goal is improvement, not escalation. Here is a practical framework.
Gather Facts Before Making Assumptions
Before any conversation, document the specific performance gaps you have observed. Note dates, specific examples, and any previous feedback given. The Fair Work Ombudsman advises managers to gather documents that demonstrate the problem, such as business statistics, examples of the employee’s work, or customer feedback, before raising performance concerns formally. Facts protect both parties and create the foundation for a productive conversation.
Have the Conversation Early
The earlier a performance conversation happens, the easier it is. A brief, direct, and supportive check-in at the first sign of a problem is far less confrontational than a formal process after weeks of ignored concerns. Most managers who wait do so because they are uncomfortable with the conversation, not because waiting is the right approach.
Focus on Behaviour, Not Personality
Performance conversations should be specific and behavioural, never personal. “The last three reports were submitted two days after the agreed deadline” is a performance observation. “You are disorganised” is a character judgement. One opens a productive conversation. The other closes it.
Set Clear Expectations
Every performance conversation should end with a shared understanding of what is expected, by when, and how success will be measured. Vague expectations produce vague improvement. Feedback management training helps managers build the skill to give specific, actionable feedback that actually drives behaviour change.
Create an Improvement Plan
Where performance concerns are persistent, a structured performance improvement plan (PIP) provides clarity for both the employee and the manager. A good PIP identifies the specific performance gaps, the actions required to close them, the support available to the employee, the timeframe for review, and the consequences of insufficient improvement.
Follow Up Consistently
Follow-up is where most performance management falls apart. A single conversation without follow-through teaches an employee that the conversation was not serious. Scheduled check-ins, documented progress, and consistent accountability are what give a performance process integrity.
Knowing what to avoid is as important as knowing what to do.
Avoiding the Conversation
Avoidance is the single most common and costly mistake managers make with underperforming employees. Every week the conversation is delayed, the problem compounds, the team’s frustration grows, and the legal complexity of any eventual intervention increases. Difficult conversations are a core management skill, and critical conversations training provides a practical framework for having them with confidence and care.
Publicly Criticising Employees
Raising performance concerns in a group setting, in front of peers, or in any format that humiliates the employee is damaging, counterproductive, and potentially a workplace bullying risk. Performance conversations belong in private.
Being Inconsistent
Applying performance standards selectively, addressing the same behaviour in one employee while ignoring it in another, undermines the manager’s credibility and creates a perception of unfair treatment. Consistency matters both legally and culturally.
Failing to Document Concerns
Undocumented performance concerns are difficult to act on and virtually impossible to defend in a Fair Work context. Every performance conversation, formal or informal, should be noted with dates, content, and outcomes.
Assuming the Problem Will Fix Itself
It rarely does. The Fair Work Ombudsman explicitly states that underperformance issues are unlikely to go away on their own, and that other employees may lose motivation if they carry the burden of poor-performing colleagues. The cost of waiting is almost always higher than the cost of acting.
How Performance Management Training Helps Leaders Respond Earlier
One of the most consistent barriers to early intervention is manager confidence. Many managers know something is wrong but do not know how to raise it, what to say, or how to handle the response. That uncertainty translates into delay, and delay translates into cost.
Performance management training addresses this directly by giving leaders a practical framework for identifying and responding to poor performance in the workplace before it escalates.
Building confidence in difficult conversations. Managers who have practised performance conversations in a safe training environment approach real situations with significantly more confidence and composure.
Setting measurable expectations. Training helps leaders understand how to establish clear, specific, and measurable performance standards from the outset, which makes identifying deviation from those standards far simpler.
Giving constructive feedback. The ability to give feedback that is specific, timely, and focused on behaviour rather than personality is a trainable skill that transforms the quality of performance conversations.
Creating accountability. Keeping people accountable training gives managers the tools to build accountability into their team culture, reducing the frequency and severity of performance issues over time.
Supporting long-term improvement. The goal of performance management is not to document a dismissal pathway. It is to help employees succeed. Managers trained in coaching and development approaches are better equipped to support genuine improvement.
For organisations where performance conversations are consistently avoided or handled poorly, leadership management training provides the broader capability framework that underpins everything else, from managing individual performance to building high-performing team cultures.
Poor performance in the workplace is not inevitable, but it is common. And it is far more manageable when it is identified and addressed early, before patterns become entrenched, before team morale takes a serious hit, and before a situation that could have been resolved with a single honest conversation becomes a formal, complex, and costly process.
The research is consistent: most performance problems have a window of easy resolution, and most managers who miss that window do so not because they lack awareness, but because they lack the confidence, skills, or framework to act.
Organisations that invest in performance management training and leadership management training build teams of managers who can identify poor performance early, respond with clarity and care, and support genuine improvement over time. That investment pays off not just in individual performance outcomes, but in stronger team cultures, lower turnover, and workplaces where people are set up to succeed.
If your managers are finding it difficult to address performance issues confidently, the place to start is with building their capability, not adding to their compliance burden.
What is the first sign of poor performance at work?
The first signs are usually subtle behavioural changes rather than dramatic failures. These include a decline in the quality or volume of work, reduced engagement in team interactions, missed deadlines that were previously met consistently, or a shift in attitude. Managers who hold regular one-on-one conversations are far better positioned to notice these early signals.
How long should managers wait before addressing performance concerns?
They should not wait at all. The Fair Work Ombudsman advises that performance concerns be addressed as soon as they are identified. A brief, direct, and supportive conversation at the first sign of a problem is both easier and more effective than a formal process initiated weeks or months later.
Can poor performance be turned around?
In many cases, yes. When a manager responds early, identifies the root cause, provides clear expectations and genuine support, and follows up consistently, employee performance issues are very often resolved. The probability of a successful outcome decreases significantly the longer intervention is delayed.
What is the difference between poor performance and misconduct?
Poor performance refers to an employee’s inability or failure to meet expected standards of work output, quality, or behaviour, usually without deliberate intent. Misconduct refers to deliberate or wilful behaviour that breaches workplace policies or standards, such as dishonesty, harassment, or serious safety violations. The processes for addressing each are different, though they sometimes overlap. When in doubt, seek HR or legal advice.
How should managers document performance issues?
Documentation should be factual, specific, and dated. Note the specific performance gap observed, any previous conversations or feedback given, the employee’s response, and the agreed next steps. Avoid subjective language or character assessments. Keep records secure and consistent with your organisation’s privacy policies.
