This is a question that family business owners and leaders ask me all the time. When delving deeper the reality is normally that low performance is the result of a missing performance measurement, feedback and support framework. Let me try to explain.

Providing an underperforming employee a chance to improve rather than firing them, seems sensible especially in a tight labour market. However many family business owners and leaders seems at a loss as how to go about this. However there are some matters to be considered as whether there where some circumstances that contributed to this low performance than need to be recognised. These could be:-

• Have the right resources been provided? As a family business owner or leader you need to be sure that you have addressed factors beyond the employee’s control that might have contributed to their performance failures. Were there unclear expectations, unmanageable workloads, training gaps, or insufficient resources for the person to succeed? If so, these need to be addressed ASAP.

• Where there any extraordinary circumstances? Have you taken any personal or health challenges into account? When family business owners or leaders provide their team members negative feedback about their work, did such team member/s explain that there where extenuating circumstances that might explain why they haven’t performed up to standard? If so, you might want to focus on what support you, your team, or your organisation could provide to help the employee.

• Have you used a third-party perspective? What might feel like a low performance problem could be more about friction between the style of the family business owner or leader and the employee’s style, rather than an actual gap in their outputs. Family business owners and leaders would do well to remember that this is about performance, not personality. Be sure to seek input from others, like HR or external advisors, to assess the problem.

Should you as a family business owner or leader, believe that the identified performance gaps can be filled by the respective employee than it would make sense to setup a so called plan for performance improvement. However what I normally find is that family business owners or leaders do not work on developing such a plan. Some keep postponing having a discussion about this, indefinitely. If family business owners or leaders are not willing to support any such plan or recognise improvements when they happen, implementing any plan to improve an employee performance is both unkind and a waste of time and effort. Obviously if an employee has violated values, policies, or laws than that makes the situation well above any such plan as it is very likely unacceptable to keep them in employment within the family business. Family business owners & leaders need to make sure than any performance improvement plan includes the setting of clear expectations on performance goals and targets, skill development coaching, constructive feedback and sets clearly the consequences of failing to meet goals. All this takes time. Nothing comes quickly. Moreover, such a plan should include the following, to ensure its effectiveness:

• Address root causes: Any plan to improve performance should be specific to the individual and the reasons for their poor performance. An employee with solid skills but lackluster motivation will need a different approach than one with more will than skill.

• Make it future-focused: Such plans need to be future focused. If such a plan is filled with examples of past mistakes, it will feel punitive, as if you would rather dwell on what went wrong than focus on what comes next.

• Set clear expectations: Where possible, define the performance goals using measurable objectives with agreed-upon metrics and performance targets. Where your expectations are more qualitative, be explicit and specific about acceptable work quality and avoid equivocal and subjective wording, which will only introduce more uncertainty.

• Provide ongoing feedback: Once the plan is in place, check in routinely to see if the employee is on the right track. Reward success and provide regular feedback, ongoing coaching, and course corrections. Failing to do so will only reinforce the narrative that such a plan is useless and will not yield any improvement in performance.

• Stick to an agreed-upon duration. Any plan should position the employee to make tangible progress in a short time. If demonstrable progress can be seen in that timeframe, the plan can be concluded with some follow ups.

• Make an employment decision. If sufficient progress has not been attained relative to the plan commitments, family business owners or leaders must choose between assigning the person to a new role where they are capable of succeeding or proceeding with discussing the termination of employment with the team member. Postponing this over and over again, will only make things worse.

Suppose that at the end of all this and after setting an improvement plan, the overall performance of that employee has not improved, does that mean that setting such a plan was all a waste of time? The answer is NO. If family business owners or leaders, genuinely try to help a person succeed, using an improvement plan approach has several positive effects, regardless of whether it resolves the employee performance issues. First, you reinforce the importance of fairness within the business. Secondly you show that you take both behaviours and outputs seriously. Thirdly, delivering relatively swift outcomes (either improvement or removal from role) will reassure team members, who have likely paid the price for their teammate’s underperformance.

The worst thing any family business owner or leader can do is grumble about under performance of team members and do nothing about it.