Ask the Expert: When Performance Slips

This month we spoke to Paula one of our HR experts about a challenge many small businesses are quietly facing right now: employees who seem switched off, are making mistakes, or simply not performing as they once did. Is it a capability issue, a conduct issue, or something deeper?

We’re hearing more employers say staff seem disengaged. Is this something you are seeing too?

Yes, absolutely. Many employers are noticing a gradual shift rather than a sudden change.   Employees who were previously reliable are becoming quieter, less focused, or more prone to mistakes. It’s important to recognise that disengagement doesn’t always mean someone has stopped caring. Often it’s a sign that something has changed, either at work or in their personal life, and their energy or attention is being pulled elsewhere. For small businesses especially, where every role has a visible impact, this can feel particularly noticeable.

What are the early signs that an employee may be disengaging?

It usually starts subtly. You might notice missed deadlines, small errors creeping into work, reduced communication, or a drop in enthusiasm. Sometimes managers describe it as a change in attitude or a loss of initiative. The key thing is not to jump straight to conclusions. Disengagement rarely appears overnight, and spotting it early gives employers the best chance to address it constructively.

Could cost-of-living pressures and personal worries really affect performance at work?

Without question. Many employees are currently dealing with financial pressures, family responsibilities, or general stress about day-to-day life. When someone is trying to keep their head above water, work may not feel like their main focus for a period of time. That doesn’t excuse poor performance, but it does help explain why it might be happening. Understanding the context allows employers to respond in a way that is both supportive and sensible.

So what should a manager do first when performance drops?

The first step should always be a conversation; genuine and meaningful rather than confrontational. Managers sometimes rush straight into “fixing” mode, but the real value comes from asking open questions and listening. Something as simple as “I’ve noticed a few changes recently.  Is everything okay?” can open the door. Often employees will share more than you expect once they feel they are being approached with concern rather than criticism.

How do employers balance being supportive with maintaining standards?

This is where good management really matters. Support and accountability are not opposites, they work together. Employers can acknowledge that someone may be struggling while still being clear about expectations. The conversation should be about helping the employee get back on track, not lowering the bar. Small businesses especially need consistency, so clarity around standards remains important even when empathy is required.

When should refresher training or additional guidance be considered?

Sometimes performance issues are not about motivation at all, they are about confidence or capability. Processes change, workloads increase, or employees move into roles that stretch them beyond their original experience. Refresher training, clearer guidance, or more regular check-ins can make a huge difference. Before assuming someone is underperforming intentionally, it’s worth asking whether they’ve actually been set up to succeed.

And this approach is becoming even more important as employment law continues to evolve, with upcoming changes placing greater emphasis on how employers manage performance concerns from the outset.  We keep hearing about changes under the Employment Rights Act.

The direction of travel in employment law is very clear.  Employers will need to show that they have acted reasonably, fairly and proactively when managing performance concerns. As protections strengthen, particularly around early employment rights, businesses will be expected to demonstrate that they have had meaningful conversations, offered support, and given employees a genuine opportunity to improve before moving to more formal action. In practice, this means that performance management can’t be rushed or treated as a tick-box exercise. Clear documentation, consistent processes and good communication will become even more important for employers of all sizes.

What does this mean in practical terms for small business owners and managers?

For smaller businesses, the biggest shift is mindset rather than paperwork. Managers will need to get comfortable addressing issues early, having regular check-ins, and being clear about expectations from day one. Waiting until performance becomes a major problem is likely to create more risk. The good news is that most of this isn’t about introducing complicated HR systems, it’s about good management habits. When expectations are clear, feedback is regular, and support is visible, employers are not only more compliant but usually see better engagement and performance too.

At what point does a Performance Improvement Plan become appropriate?

A Performance Improvement Plan, or PIP, is usually the right step when informal conversations and support haven’t led to improvement, but you still believe the employee can succeed. The purpose isn’t punishment; it’s structure. A good PIP sets out clear expectations, measurable outcomes, and reasonable timescales while providing support along the way. For many employees, clarity alone can help them re-engage because they understand exactly what needs to change.

When does performance become a disciplinary matter?

This is a common area of confusion. Performance issues are usually about capability, someone can’t meet the standard, whereas disciplinary action is about conduct, someone won’t meet the standard. If an employee is trying but struggling, a capability route is normally more appropriate. If there is deliberate refusal, negligence, or repeated disregard for expectations, then disciplinary action may be justified. Getting this distinction right is important from both a legal and cultural perspective.

What mistakes do small businesses often make when handling disengagement?

The biggest mistake is avoiding the conversation for too long. Managers often hope things will improve on their own, but silence can allow problems to grow. Another common issue is jumping straight to formal action without exploring what’s really going on. On the other hand, some employers become so sympathetic that they avoid setting boundaries altogether. The most effective approach sits somewhere in the middle, early conversations, clear expectations, and fair, proportionate action.

What’s your overall advice for business owners facing this right now?

Don’t assume disengagement equals laziness or lack of commitment. People are navigating a lot outside of work at the moment, and good employers recognise the human side while still running a business. Start with understanding, follow up with clarity, and move through support, guidance, and formal processes in a measured way. When handled well, many employees do re-engage and businesses often come out stronger because trust and communication improve.

Final Thought

In small businesses, performance challenges can feel personal because every individual has a visible impact on the wider team. The key is not to ignore the issue or rush straight into formal action, but to lead with clarity, consistency and confidence. When employers take the time to understand what’s driving disengagement, offer the right support, and set clear expectations, they create a culture where people can recover and succeed but where standards still matter.

Good HR isn’t about choosing between empathy and accountability; it’s about balancing both so your business stays strong while your people feel supported.

At HR:4UK, we always say that good people management isn’t about avoiding difficult conversations and it’s about having them early, fairly, and with the right support behind you.