Many leaders, especially in government and large institutions, struggle with underperforming employees who drain productivity, morale, and resources. My colleague and I experienced this last week: an organization director, overwhelmed with frustration, has multiple cases of long-term underperformance but feels constrained by bureaucracy, fear of legal retaliation, and a workplace culture that resists decisive action.

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What can leaders do to navigate this dilemma? Here are some ideas:

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1. Don’t Underestimate the Power of Strategic Coaching

While some employees may simply be a poor fit, others may have the potential to turn things around with the right guidance. Before moving straight to termination, a leader should explore whether coaching or structured interventions could make a difference.

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By setting specific goals and providing a clear improvement plan, leaders give employees the opportunity to either step up or self-select out of the organization. Those who genuinely want to improve will welcome this guidance, while those who resist will demonstrate that they may not belong in the organization. Ultimately, this process can foster growth and, in some cases, even rehabilitate performance issues.

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2. Look Beyond the Individual: Impact on the Organization

Underperformance has a ripple effect on the organization. Poor performance rarely exists in a vacuum. In this director’s case, morale was down across five departments, each impacted by poor-performing employees. This affects the team’s productivity, morale, motivation, and overall workplace culture.

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Leaders need to see these issues for what they are—systemic challenges, not isolated problems. By addressing underperformance as a cultural issue, leaders create a message of accountability and a clear commitment to high standards.

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3. Create a Culture Where Performance is Valued

Government agencies, like the one in this scenario, often operate in environments where job security is prioritized over performance. This can create a culture where underperformance is tolerated, sometimes for years, with little risk to the employee. However, effective leaders push back against this status quo. Leaders should establish clear performance expectations, set achievable goals, and provide regular feedback. When employees understand what’s expected and know their work is consistently evaluated, they’re more likely to rise to the occasion.

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This may require a cultural shift and a willingness to hold uncomfortable conversations. But the long-term impact on morale, productivity, and employee satisfaction is worth it. Creating a performance-focused culture empowers high achievers, motivates mid-level performers, and makes it clear that chronic underperformance won’t be ignored.

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4. Document—Then Act Decisively

The director diligently documented the poor performance of one particularly problematic employee, creating a file over an inch thick. We all know documentation is the evidence that managers need to support their case for action. However, documentation is only part of the solution. For it to matter, leaders must be prepared to act on it.

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Many managers hesitate at this point, worrying about possible legal implications or backlash. Yet, allowing poor performers to hang on, especially those who poison the culture, harms not only the team but also the organization’s effectiveness. If the employee cannot or will not improve, termination may be the best option—not as a punishment but as a necessary step for the health of the entire team.

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5. Address the Fear Factor

Managers may fear the repercussions of making difficult personnel decisions. They worry about lawsuits, appeals, and the potential for backlash, especially if the employee has taken preemptive steps, like hiring a lawyer. While these concerns are valid, they should not paralyze a manager into inaction.

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For leaders, courage is a vital quality. Managers should work closely with HR to ensure that all procedural steps are followed to the letter. If they have provided constructive feedback to the employee, documented issues thoroughly and treated the employee fairly, they are legally protected in taking corrective action. HR departments, for their part, need to provide steadfast support, empowering managers rather than creating roadblocks.

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6. Take a Stand for Organizational Health

Leaders should remember that taking corrective action isn’t about punishment—it’s about protecting the health of the organization. Every employee who is allowed to underperform sends a silent message to the rest of the team: “We don’t prioritize excellence.” On the otherhand, when leaders make the tough call to help under-performers improve or let them go, they set a precedent that the organization values productivity, morale, and the success of the whole team.

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In the end, addressing poor performance effectively isn’t just a management issue—it’s a statement of leadership values. By standing up for accountability and making the tough calls, leaders can inspire loyalty and respect, creating a culture where every employee knows that they—and the organization—are held to the highest standards.

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So, next time you find yourself in the fix-or-fire conundrum, remember: decisive action speaks louder than a thick file folder.

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