How Should Corporates Deal With Poor Performers? Some Strategies and Approaches

No One Size Fits All Approach in the Way Corporates Deal with Poor Performers

How should corporates deal with poor performers? Should they be fired or dismissed or should they be given a second chance, and then a third chance? Is there a middle path between outright dismissal and giving them a “long rope”? Based on our working experience, we list some strategies and approaches that corporates can implement as far as dealing with poor performers is concerned.

To start with, different corporates have different benchmarks on classifying employees as poor performers. While some place employees in the poor performer category post appraisal, others place them in such “buckets” on a rolling basis, which means that immediate managers and their bosses take the call as to when their reportees should be classified as poor performers.

A few corporates also have a specific policy towards denoting poor performers and it is usually after a quarter or so, that such employees are “put on watch” or placed in Performance Improvement Plans where the former are told that unless they “shape up”, they would be “shipped out”. So, each corporate has its own way and method of classifying poor performer and there is no single approach.

After The Event! What Happens Next Once Poor Performers are Identified?

Having said that, the next pertinent question to ask is what happens after poor performers are identified and placed in PIPs. While there is no universal approach or a “one size fits all” strategy, in our working experience, we have come across approaches that include outright dismissal after appraisals, giving the poor performers another chance, and perhaps the most common approach of all, placing them in PIPs.

Improving Employee Performance

Indeed, we can confidently say that not all corporates, except Investment Banks and Management Consultancies, where the stakes are high, resort to outright dismissal of poor performers. Even these firms notify their employees in advance that after the appraisals are done, the Bottom 10% or whatever be the numbers, would be dismissed.

The reason why Bankers and Consultants are dealt with so harshly is that one, they are highly paid and so, their employers expect nothing but the best from them, and more importantly, they operate in a “cutthroat” niche, where the firms simply cannot “afford” poor performance (literally as well as figuratively).

So, it is usually the case that the approach to deal with poor performers depends on the industry, the seniority level, their “value” to the organization, and their past contribution.

An Analysis of the “Matrix of Attributes” That Determine Corporate Responses

Let us take each of the aforementioned parameters. As discussed earlier, if you work in an industry that is highly competitive, expect no mercy from your employers. On the other hand, if you work in a very large organization where employees number in the Tens of Thousands, expect the same impersonal treatment.

Of course, if you work for a midsized corporate, then perhaps you stand a better chance at retaining your job, and being given a second chance. While these aspects are prevalent across the board, it is worth noting that senior managers and execs are treated differently, irrespective of the industry they work in.

For instance, we have come across middle and senior management personnel who have been given more latitude than junior employees and often have been told discreetly that they must “pull up their socks”. However, it is also the case that the more senior you are, the chances of retaining your job diminish, as there are greater expectations from more experienced managers and execs.

So, seniority cuts both ways, depending on how “valuable” or “expendable” the corporates think you are. Indeed, these attributes also apply to junior employees, when the PIPs are decided after appraisals.

It Is Sad That Corporates Have Become “Less Tolerant” After the Pandemic

In recent years, corporates have become “less tolerant” of poor performers. More so, after the pandemic and its “havoc” on working professionals, it has become the norm for corporates to be ruthless with their employees.

Poor Performance Employee

It is indeed sad that the workforce is being given the harsh treatment, at a time when they need more “understanding and support”. Otherwise, why would leading IT (Information Technology) majors in India resort to mass layoffs and summary dismissal of employees in the last year or so, after designating such employees as poor performers. Moreover, what was earlier considered acceptable is no longer so as evidenced by the Zero Tolerance to moonlighting and other endeavors.

In addition, given the skewed demand supply dynamics where the supply of prospective employees is more than the number of openings, and one can see why Indian corporates have suddenly deeming more numbers in their workforces as “redundant”. Add the need for up-skilling and re-skilling for the Digital Age, and one can understand why Big Tech firms are also “letting go” of middle and senior managers. Indeed, as the saying goes, everything is fair in love and war, and so with these firms, where poor performance is no excuse.

Concluding Thoughts

Last, despite all these aspects, it is also the case that corporates are usually “humane” towards poor performers. We have come across managers who defend poor performers for reasons such as personal problems that are impacting their performance, and have given their reportees a “long rope”.

So, the concept of empathy and emotional intelligence is yet to disappear completely. However, the advent of automation and AI or Artificial Intelligence is bound to “change the game” where low skilled and poor performing employees can no longer expect any leeway. To conclude, poor performers are treated based on a matrix of attributes.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.