How to have a performance conversation with a senior employee who is underperforming

This is one of the most avoided conversations in Indian SMEs. Founders tolerate underperformance from senior people far longer than they should — because they've been with the company a long time, because replacing them feels expensive, or because the conversation feels uncomfortable. The cost of avoiding it is always higher than the conversation itself.

Prepare before you speak. Be specific about what underperformance means. 'You've not been great lately' is a feeling, not a performance issue. 'Sales target for Q3 was ₹80L, actuals were ₹52L. This is the third consecutive quarter below 70% of target' is a performance issue you can address.

Have the conversation privately and promptly. Don't build up months of frustration before you say anything. Address it as soon as a pattern is clear — usually within 60 days of the first signal.

Use a direct but curious opening: 'I want to talk about [specific metric or outcome]. The results over the last three months have been [X], and I'm concerned. Help me understand what's happening from your side.' This gives them a chance to surface something you don't know — a personal situation, a resource gap, or a system failure.

Agree on a specific improvement plan with a timeline. Not 'you need to do better' but 'by end of Q4, we need to see [specific outcome]. Here's what support I can provide. Here's what needs to change. Let's review in 4 weeks.'

Document the conversation. A brief email after the meeting — 'As we discussed, here's what we agreed' — creates a record and ensures alignment.

TBC works with founders on building the management capability to have these conversations consistently and fairly. If you have a senior team member whose performance is a problem you've been avoiding, the cost is compounding every month.