When Good People Underperform: The Hidden Pieces of the Puzzle

Every leader eventually faces the same frustrating situation. A capable team member who used to perform well suddenly begins to struggle.
Deadlines slip. Work quality drops. Progress slows. The instinctive reaction is to question the individual.

But in many cases, underperformance isn’t a people problem — it’s a systems problem.

When organisations look closely, the root cause usually sits in one of four areas: clarity of expectations, feedback issues, leadership consistency, or accountability structures. These are not soft leadership ideas. They are measurable drivers of performance.

1. Clarity: Do People Actually Know What Success Looks Like?

One of the most overlooked causes of underperformance is lack of clarity. Employees cannot consistently deliver strong results if they don’t clearly understand what is expected of them. Research from Gallup found that only about 50% of employees strongly agree they know what is expected of them at work, which significantly affects productivity and engagement.

When expectations are unclear, people spend energy guessing priorities instead of executing them. This is particularly common in SMEs where roles evolve quickly as the business grows. Job descriptions become outdated, responsibilities overlap, and priorities shift without clear communication.

Over time, even capable employees struggle to perform because the target itself keeps moving. Strong-performing organisations do something simple but powerful: they define clear outcomes, not just responsibilities.

People should know:

• What success looks like in their role
• Which priorities matter most
• How their performance will be measured

Without that clarity, performance becomes inconsistent no matter how capable the team is.

2. Feedback: Performance Improves With Frequent Guidance

Another hidden cause of underperformance is infrequent feedback.

Many businesses still rely on annual or occasional performance reviews. But performance cannot improve if feedback only happens once or twice a year. According to research published in Harvard Business Review, employees who receive frequent feedback are significantly more engaged and more likely to improve their performance.

Feedback creates course correction. Without it, small mistakes quietly compound into larger problems. In high-performing teams, feedback is built into the work design itself. Leaders run short regular check-ins where they discuss progress, obstacles, and priorities.

These conversations create alignment and prevent problems from escalating. In contrast, when feedback disappears, underperformance often becomes visible only when it is already severe.

3. Leadership Consistency: Managers Shape Team Performance

A third factor behind underperformance is leadership behaviour.

Managers translate strategy into daily execution. Their habits influence how teams prioritise work, solve problems, and respond to challenges. Research from McKinsey found that organisations with strong leadership capability are 1.9 times more likely to achieve above-average financial performance.

However, many SMEs unintentionally create leadership gaps.

Strong individual contributors are promoted into management roles without training or support. They suddenly become responsible for guiding others, managing expectations, and giving feedback. Without those capabilities, performance conversations are avoided or handled inconsistently.

The result is confusion rather than improvement. Effective leaders provide clear expectations, regular feedback, and consistent standards. When leadership becomes predictable, teams perform more confidently.

4. Accountability: Performance Requires Ownership

The final missing piece is accountability.

Accountability is often misunderstood as blame or punishment. In reality, it simply means outcomes are clearly owned and progress is visible. Without accountability structures, projects drift. Work gets delayed. Problems are tolerated. Responsibilities become blurred.

The American Society of Training and Development found that people are 65% more likely to achieve a goal when they commit to someone else, and 95% more likely to achieve it when they have regular accountability check-ins.

Clear accountability structures create momentum. Teams know what needs to be delivered and who is responsible. When progress is visible, underperformance becomes easier to address early.

Why This Matters for SMEs

Large corporations often absorb inefficiencies because they have scale. SMEs don’t have that luxury. A few unclear roles, inconsistent leadership behaviours, or missing feedback loops can quickly affect productivity, morale, and growth.

That’s why strong SMEs focus on building simple performance systems, not just hiring better people. When expectations, feedback, leadership and accountability align, good employees rarely underperform. They improve.

A Quick Reflection for Leaders

If someone on your team is underperforming, consider these questions:

• Are expectations for their role clearly defined?
• When was the last time they received constructive feedback?
• Are leadership behaviours consistent across the team?
• Is ownership of outcomes clearly visible?

Often the answers reveal the real issue. Because performance rarely fails in isolation. It usually fails when systems quietly stop supporting people.

When good employees struggle, the easy response is to focus on the individual. Great leaders take a different approach. They examine the system first. Because when the system improves, performance often follows.