4 Sure-Fire Ways To Manage Underperforming Employees

Are underperforming employees the bane of your existence, and a huge drain of your time and energy? Do you run out of options after you’ve coached, coaxed, had the conversations, put the corrective action in place, seen improvements, seen backsliding, fired, hired, and found yourself going through the same cycle all over again? Or… have you hung onto them, because they’re not really bad enough to fire and you just hope that somehow, someday, something will change and they’ll “get it”?

Here’s a better way, especially for dealing with what I call the Marginals in the Middle who aren’t that bad… but aren’t that good. This model has worked well in my business for many years, and my clients love it because they finally have an easy way to make the tough decisions.

There are two axes on the matrix below – performance and fit to culture. And there’s one surefire question that helps you place your employees in the right quadrant, and take the appropriate action.

Racehorses are never a problem to spot – they’re your superstar performers and they just want to run to win. Simply get out of the way and give them all the support and appreciation they need to make great things happen.


The 4 Categories of Underperforming Employees 

  1. Donkeys: Donkeys are just as easy to spot as Racehorses. In fact, I’ll bet you laughed when you saw this and started mentally putting names in that quadrant. They’re the employees who are just never going to be an asset to your firm. You pull your hair out on a daily basis with these underperformers. You’ve known for a while now that you need to terminate them, but for some reason, you simply haven’t taken action. It’s time.
  2. Showhorses: They’re your B Players – and part of your Marginals-in-the-Middle challenge. They’re high-performing, but toxic, often throwing their weight around with others and highly demanding. They’re SO good that you just can’t bring yourself to let them go, because you can’t imagine what you’ll do without them, even though you know they’re having a negative impact. It’s a difficult decision until you ask yourself the One Question (below).
  3. Plowhorses: Bring to mind the ones who will never set the world on fire, but you would never have grounds to fire for cause. They get the job done – sort of – and they’re often eager to please. They may well be the folks who organize the annual company picnic or Christmas party and are often well-liked by others, but high maintenance, requiring a lot of coaching or handholding, and take up a lot of managerial time and attention by wanting to chat or seek validation, approval, and feedback. They’re not good enough to promote or assume new responsibilities. Plowhorses can be tough to categorize in terms of when to invest to develop their potential and when to simply let them go and recruit stronger resources for your team, because they’re the ‘nice’ people who are contributing to your culture. Sometimes these folks would perform at a higher level if they found flow and were in the right role for their talents. What you want is a process and some good questions for sorting them out and taking appropriate action or helping them find flow.
  4. Colts. They tend to be newcomers to the organization or those going through a transition phase after being promoted. They are often Marginals simply because they’re learning the culture and trying to find their feet. If you can help them find flow, they have the potential to be future Racehorses and step up from a B Player to an A. If not, they are likely to become Donkeys or Showhorses. Can you name the Colts in your organization?

The One Question:

If you have any doubt about who’s who in your organization, pick the axis that most reflects the challenge you’re having with them (performance or culture) and ask yourself “Could They Do It If They Wanted To?”

  • If the answer is NO, then you’ve got a training or development issue that can be addressed, and your only remaining choice to make is whether or not you believe they are worth the investment.
  • If the answer is YES, then you’ve got an attitude issue – they are choosing not to be a team player. Can attitudes shift? Sometimes… again, it’s a question of the investment, and that’s not an easy answer.

So Now What?

There are processes for dealing with the No’s and Yesses to confidently make good decisions in each quadrant and take the essential steps to strengthen your team that are beyond the scope of this blog post. Yet knowing each of the strategies for dealing more constructively with Racehorses, Showhorses, Colts, Plowhorses and Donkeys will determine the success or failure of your organization. Taking action is the other half of the equation, and you probably already know that there are times when you’ve let a situation go on for too long.

Success Story: The CEO of a professional services firm found herself with a Showhorse – an employee who was universally regarded as their ‘rock star’ when it came to being able to deliver creative solutions, yet toxic. The employee was not only regularly bad-mouthing the leadership to customers, but was also suggesting that they were losing business to their competitors. She planted a lot of seeds that turned previously loyal clients into customers looking for alternatives. The show-stopper came when the CEO realized that she was making hiring decisions based on who might or might not be able to stand up to, put up with, and get along with the ‘rock star.’ The toxic ‘rock star’ was driving decision-making in the company, not the CEO.

I worked with the CEO to identify the nuances and some important questions to ask to help her get even more clarity on the impact the Showhorse was having. We reviewed all the hiring decisions that had been made in the past and whether that talent had stayed or left. There was definitely a pattern that differentiated Racehorses, Donkeys and Showhorses. From there she developed hiring profiles based on the Racehorses and identified early warning questions to ask during interviews to identify which was which. Finally, I supported her to take action although it took her 8 months to finally work up the nerve to terminate her prize showhorse. It went more easily than she thought. And she replaced that toxic influence in her organization with colts who are showing tremendous racehorse promise.

Have some difficult people challenges? Reach out if you would like to feel more confident in the right strategies and actions to take.

When you think of the most challenging people issues that you’ve dealt with in your career, which category were they most often in?

#1 Bestselling Author, International Speaker, and Accelerator Anne C. Graham is on a mission to help 5 million business leaders and their teams double their profit per employee – or more – in less than one year, in less time per week than they’re spending on email per day. Her new book Profit in Plain Sight includes the 5-step proactive P.R.O.F.I+T Plan to do it. Connect with Anne on Twitter, LinkedIn and Facebook.