Year-end reviews often bring unresolved performance concerns into focus. Employees may be missing targets, producing work below the expected standard or struggling with responsibilities that have changed during the year.
Managing underperformance effectively means addressing concerns early, setting clear expectations and giving employees a reasonable opportunity to improve. Leaving problems until an annual review or the end of a probation period can make them harder to resolve.
From 1 January 2027, the qualifying period for ordinary unfair dismissal in Great Britain will reduce from two years to six months. Employers should therefore review how they manage performance, particularly during the early months of employment.
In this guide, HR Team explains how to manage underperformance fairly and what employers should review before the changes take effect.
What Is Employee Underperformance?
Employee underperformance occurs when someone is not meeting the reasonable standards expected in their role.
Common examples include:
- Repeatedly missing agreed targets or deadlines
- Producing work below the required standard
- Making recurring errors
- Failing to complete key responsibilities
- Struggling to meet reasonable expectations for the role
Underperformance should be distinguished from misconduct. Poor performance generally concerns an employee’s ability to meet the required standard, while misconduct relates to their behaviour or actions.
Before taking action, employers should identify the specific problem and make sure the employee understands what is expected of them.
Address Performance Concerns Early
Performance concerns should not be saved for an annual review. Addressing them early gives employees an opportunity to understand what is going wrong and make improvements before the situation becomes more serious.
An initial conversation can often be informal. Managers should:
- Explain the concern using specific examples
- Give the employee an opportunity to respond
- Listen to any difficulties they are experiencing
- Agree on what needs to improve
- Set a reasonable timeframe for reviewing progress
- Keep a record of the main points discussed
Avoid vague feedback such as telling someone to “do better”. Explain which standards are not being met, what improvement looks like and how progress will be assessed.
For practical advice on giving feedback, read HR Team’s six-step guide to constructive criticism.
Understand the Cause and Provide Appropriate Support
Poor performance does not automatically mean an employee is unwilling to do their job. Before deciding how to proceed, employers should consider what may be affecting their performance.
Possible causes include unclear responsibilities, insufficient training, excessive workloads, changes to the role, workplace difficulties or personal circumstances. Health conditions or disabilities may also affect an employee’s ability to meet certain requirements.
Give employees an opportunity to explain any difficulties they are experiencing. Depending on the circumstances, appropriate support might include:
- Additional training or coaching
- Clearer instructions and priorities
- More regular manager check-ins
- Access to the resources needed to do the job
- Reasonable adjustments where an employee is disabled
Employers should consider their legal obligations, including whether reasonable adjustments are required.
Support should be appropriate to the problem, but expectations still need to be clear. If performance remains below the required standard despite suitable support, a more structured improvement process may be necessary.
For help establishing clear expectations and addressing performance concerns, explore HR Team’s performance management service.
When Should You Use a Performance Improvement Plan?
A performance improvement plan (PIP) can help when informal discussions and support have not resulted in sufficient improvement.
A useful PIP should set out:
- The specific areas where performance needs to improve
- Clear and achievable objectives
- How progress will be measured
- The training or support available
- A reasonable timeframe for improvement
- Dates for reviewing progress
- The possible consequences if improvement is not achieved
The timeframe should reflect the role and the nature of the performance issue. There is no single period that is suitable for every employee.
A PIP should provide a genuine opportunity to improve, rather than simply create a record before dismissal. Managers should review progress, provide feedback and adjust support where appropriate.
If performance does not improve, employers may need to move to a formal capability process. They should follow the relevant procedure, explain the concerns clearly and give the employee an opportunity to respond. Depending on the circumstances, this may involve formal meetings, written warnings and an appeal process.
Dismissal for poor performance may ultimately be considered, but employers should assess the individual circumstances and follow a fair process before reaching a decision.
Keep Clear Records and Apply Procedures Consistently
Accurate records help employers monitor progress, make informed decisions and demonstrate the steps taken to address performance concerns.
Managers should record relevant information such as:
- Examples of performance falling below expectations
- Objectives and standards agreed with the employee
- Notes from performance discussions
- The employee’s response and any issues raised
- Training, support or adjustments provided
- PIPs and progress reviews
- Formal warnings and decisions
Records should be factual, accurate and kept up to date. They should reflect what happened rather than assumptions about an employee’s attitude or intentions.
Employers should also apply performance procedures consistently. Similar cases should generally be handled in similar ways, while taking account of individual circumstances. One employee may need additional training or adjustments that another does not.
Consistency does not mean treating every employee identically. It means making reasonable decisions based on clear standards, relevant evidence and a fair process.
Good documentation can be particularly important if an employment decision is challenged. Employers should also understand the changes to Employment Tribunal time limits in 2026.
What Changes to Unfair Dismissal Rights in January 2027?
From 1 January 2027, the qualifying period for ordinary unfair dismissal in Great Britain will reduce from two years to six months. The change applies where the effective date of termination falls on or after 1 January 2027.
Employees will therefore gain access to ordinary unfair dismissal protection much earlier in their employment. Employers should not rely on length of service alone when deciding how to handle performance concerns.
This makes it particularly important to have clear expectations, effective probation reviews and a consistent approach to managing underperformance from the beginning of employment.
What Should Employers Review Before 2027?
Employers should consider whether their current procedures are suitable for the shorter qualifying period.
Practical steps include:
- Review probation procedures: Make sure reviews happen at appropriate stages and concerns are raised promptly.
- Clarify performance expectations: Ensure job responsibilities, objectives and standards are clear from the start.
- Train managers: Help managers recognise performance problems, give constructive feedback and handle difficult conversations.
- Review capability procedures: Check that informal and formal processes are clear and include appropriate opportunities to respond and improve.
- Check documentation: Make sure managers record performance discussions, support provided and decisions taken.
- Understand legal obligations: Ensure managers know when health, disability or other protected circumstances may require additional consideration.
Probation periods and statutory unfair dismissal qualifying periods are separate. Passing or failing probation does not determine whether an employee has employment rights, and employers should not treat probation as a period without legal protections.
For more practical advice, read HR Team’s guide to managing the probationary period.
Why the Six-Month Qualifying Period Is Not a Risk-Free Window
The change concerns the qualifying period for ordinary unfair dismissal. It does not remove other employment protections.
Depending on the circumstances, an employee may be able to bring a claim involving discrimination, whistleblowing, pregnancy and maternity, family leave, health and safety or trade union activities without meeting the ordinary qualifying period. Some automatically unfair dismissal claims also have no minimum service requirement.
Performance concerns can overlap with disability or another protected circumstance. Employers should consider their obligations before taking action and seek advice where the position is unclear.
The important point is that a shorter qualifying period makes sound performance management more important, not less. Employers should address concerns promptly and make decisions based on evidence, the circumstances of the case and a fair process.
Does the Change Apply in Northern Ireland?
No. The reduction to a six-month qualifying period applies in England, Scotland and Wales. Employment law is devolved in Northern Ireland, where the qualifying period for ordinary unfair dismissal generally remains one year, subject to exceptions.
Businesses employing people across Great Britain and Northern Ireland should make sure their policies reflect the rules applicable in each jurisdiction.
Read HR Team’s guide to employment law in Northern Ireland and Great Britain for more information.
How HR Team Can Help With Performance Management
Managing underperformance can be challenging, particularly when concerns continue despite feedback and support. Getting advice early can help employers understand their options and follow an appropriate process.
HR Team can support your business with:
- Reviewing performance management and capability procedures
- Preparing performance improvement plans
- Managing probation reviews and performance concerns
- Supporting managers with difficult conversations
- Advising on reasonable adjustments
- Guiding managers through formal capability procedures
If you are dealing with an underperforming employee or want to review your procedures before the 2027 changes, contact HR Team for practical HR advice.
Frequently Asked Questions
How should an employer manage poor performance?
Employers should identify the specific concerns, discuss them with the employee, listen to their response and agree on the improvements required. Appropriate support should be provided, with progress reviewed over a reasonable period.
Should employers use a performance improvement plan?
A PIP can be useful when informal discussions and support have not led to sufficient improvement. It should set clear objectives, explain how progress will be measured and give the employee a genuine opportunity to improve.
Can an employee be dismissed for poor performance?
Poor performance can potentially lead to dismissal. Employers should consider the circumstances, provide an appropriate opportunity to improve and follow a fair capability process before reaching a decision.
What changes to unfair dismissal rights take effect in January 2027?
From 1 January 2027, the qualifying period for ordinary unfair dismissal in Great Britain will reduce from two years to six months. The change applies where the effective date of termination is on or after that date.
Can an employee claim unfair dismissal before completing six months of service?
Some claims do not require the ordinary qualifying period, including certain automatically unfair dismissal claims. Other employment claims, such as discrimination claims, may also arise regardless of length of service.
Does the six-month rule apply in Northern Ireland?
No. The change applies in England, Scotland and Wales. Northern Ireland has separate employment legislation, and the qualifying period for ordinary unfair dismissal generally remains one year, subject to exceptions.
