Employee performance is a fundamental aspect of any organisation’s success. High performing employees help drive innovation, productivity, and competitiveness - while underperformance, which often stems from skill gaps or poor leadership, can lead to reduced efficiency, lower morale, and higher turnover. In a region where the non-oil sector accounts for AED 1.25 trillion in GDP in 2023, businesses are under increasing pressure to optimise their workforce strategies.

As the market becomes more competitive, and inevitably more saturated, the challenges of skill shortages, rapid digital transformations, and evolving work environments become even more apparent. According to PwC’s 2023 Middle East Workforce Survey, 52% of employees expect their roles to change significantly within the next 5 years, while 72% of businesses have accelerated their digital transformations, further underscoring the need for a workforce that is equipped with the skills and toolsets to thrive in this new era. But performance doesn’t just stem from the workforce, rather, it should be encouraged from top down. Deloitte’s Human Capital Trends Report 2023 indicated that businesses are increasingly focusing on leadership development and well-being as core drivers for business performance.

What Causes High Performance?

High performing employees contribute significantly to productivity, innovation, and overall company growth. In a competitive market like the UAE, understanding the factors that drive high performance is critical.

Employees perform at their optimal capacity when their roles and objectives are clearly defined. Research from PwC’s 2024 Future of Work Report highlights that clarity in expectations is directly linked to improved employee engagement and productivity. Transparent communication combined with clear goals, career development trajectories, and performance expectations all help employees align their work with the company’s strategic goals, leading to better results.

Leadership engagement is also an important factor. Leaders who actively support their team through open communication, constructive feedback, and mentorship, foster a culture of trust, collaboration, and motivation. Successful leaders build strong teams by encouraging collaboration, open communication, and effective delegation. They understand that a high-performing team is the backbone of the organisation, driving sustainable success. According to Gensler’s Global Workplace Report 2023, strong and effective leadership is essential for maintaining employee engagement and performance. Providing employees feedback in a quarterly or bi-annual review can help leaders structure and deliver their feedback in the right setting. Making sure your company has the policies, procedure and templates in place to conduct these types of appraisals can vastly improve the employees experience with reviewing performance. Effective communication ensures that employees understand expectations, can provide feedback, and collaborate between departments effectively. PwC’s Workforce Hopes & Fears Survey 2023 found that employees in organisations with transparent communication channels were 30% more likely to feel engaged and productive.

Empowering employees with the autonomy to make decisions and take responsibility for their work boosts both satisfaction and productivity. Gensler’s Global Workplace Report indicates that employees with greater control over their tasks perform better, and 10% indicate that autonomy encourages creativity and personal investment in outcomes and greater culture of accountability and innovation.

Recognition plays a pivotal role in motivating employees. Both financial and non-financial rewards, such as public acknowledgment or career development opportunities, can drive motivation and higher performance. PwC’s Workforce Hopes and Fears Survey 2023 found that employees who feel valued and recognised are 30% more likely to exceed expectations.

Prioritising employee well-being is understanding that a healthy and happy workforce is essential to continued success. Organisations that invest in mental health support, promote work-life balance initiatives, allow for flexible and hybrid work options, and introduce physical health initiatives all tend to see reduced absenteeism and higher engagement. Accenture’s Future of Work Report 2022 noted that 82% of businesses that incorporated employee well-being programmes (EPA’s) reported higher levels of productivity and lower levels of absenteeism, staff burnout, and lower turnover rates.

What Causes Underperformance?

Just as high performance is driven by specific factors, underperformance within a workplace can often be traced back to clear and identifiable factors. Understanding these causes is crucial for addressing underperformance, and early intervention can help manage an underperforming workforce.

One of the primary reasons for underperformance is a lack of clarity regarding role duties and responsibilities. Employees who don’t understand what is expected of them often struggle to meet performance standards. PwC’s Future of Work Report highlighted that 30% of respondents cite unclear expectations as a major obstacle in their productivity and role growth. 

Poor communication is generally a trait of poor leadership. Leadership traits such as micromanagement, lack of support, insufficient feedback and lack of responsibility delegation are all signs of ineffective leadership which can lead to reduced employee motivation and poor performance. Deloitte’s Human Capital Trends report indicated that businesses with disengaged or absent leadership are more likely to see increased employee turnover and lower levels of engagement, productivity and creativity.

Workload imbalance, whether in the form of burnout from overwork or disengagement from underutilisation, is a key contributor towards underperformance. Employees that are overwhelmed with excessive workloads are more likely to cause errors, have higher levels of fatigue and poor performance. Those that do not feel challenged in their work might also become disengaged and lack motivation. Research further supports that excessive workloads can negatively impact work-life balance. On the other hand, when workloads are seen as challenging but achievable, they can positively contribute to motivation and engagement.

As businesses become more competitive, it is also essential for the workforce to remain competitive. One of the biggest factors towards underperformance is skill gaps. Employees may lack the necessary knowledge or training to perform their tasks effectively. This is backed by PwC’s Workforce Hopes & Fears Survey 2023 which found that 61% of employees believe they will need to significantly upskill in the next 5 years to meet the demands of their roles. Upskilling can greatly benefit the employee and the company. The employee is learning new skills to improve their performance in their role but it can also form part of a workplace employee benefits plan which can be offered to longer term employees in the form of study, training or education benefits to help the company attract and retain employees. 

Addressing Performance Issues in the Workplace

Addressing performance issues early and effectively is a key step in preventing potential disruptions and ensures that employees have the support they need to meet their expectations. The first step is to identify underperformance early on. Regular performance check-ins, continuous feedback, and the use of performance management metrics and tools allow businesses to spot performance issues early on. 72% of companies leverage digital tools to monitor and manage performance according to PwC’s Digital HR Survey, which highlights the importance of proactive management. As a result of performance observation, organisations should develop tailored Performance Improvement Plans (PIP’s) for their employees. A PIP clearly outlines their goals, provides the necessary resources required to achieve those goals, and establishes a timeline for the employee to show improvement.

PIP’s are more effective when they are accompanied by mentorship, training and coaching from managers. By pairing employees with experienced mentors or providing them with one-on-one training, businesses can leverage these to help employees reach their full potential. Gensler’s Global Workplace Report highlighted that employees who feel supported through mentorship are more likely to overcome performance challenges and stay engaged with their work.

Businesses need to implement structured policies and procedures in place to continue driving improvement. These policies are procedures are designed to allow employees to have the tools, framework, support and guidance they need to meet their expectations. A Performance Management System (PMS) is the backbone of any strategy aimed at improving employee performance. PwC’s Digital HR Survey showed that 72% of businesses in the UAE have implemented digital tools to monitor and manage employee performance. Effective PMS’ should include goal setting, regular performance reviews, and continued feedback mechanisms.

Recognition programmes also contribute towards higher levels of motivation and engagement. Whether financial or non-financial, creating a positive reinforcement cycle encourages employees to maintain or improve their performance. Deloitte’s Human Capital Trends Report states that organisations that invest in recognition programmes see a marked improvement in employee retention and satisfaction compared to those who don’t.

Workforce development policies, and succession planning are key to a high achieving workforce. Providing clear pathways for growth within the company is essential for keeping motivation levels up. Employees who see a future within the organisation are more likely to achieve their goals according to Gensler’s Global Workplace Report.

Businesses that also invest in ongoing training and development programmes to address any skill gaps or upskill employees see tremendous performance. Accenture’s Future of Work Report 2022 noted that companies prioritising upskilling and reskilling programmes saw a 20% increase in overall workforce productivity.

HR Consulting Services for Employee Performance

For further information about improving employee performance, managing underperformance, and implementing high-performance workplace strategies, please contact Faraz Ahmed, HR Consultant at Sovereign PPG. Our team of CIPD-qualified professionals are well-versed in helping businesses develop and manage tailored HR solutions, from performance management systems to workforce assessments. By outsourcing your HR needs to Sovereign PPG, you gain access to industry-leading expertise and digital tools that will enable your organisation to stay agile, compliant, and competitive. Reach out via email at hrconsultingme@sovereigngroup.com to learn how we can help optimise your workforce for future success.