To improve employee performance, set clear and measurable expectations, give frequent coaching feedback, recognize good work specifically and promptly, invest in skills training, and deal with underperformance early through a documented plan. Gallup research finds the manager accounts for 70% of the variance in team engagement, so most of these levers sit with managers.
Key Takeaways
- According to Gallup’s State of the Global Workplace 2026 report, only 20% of employees worldwide were engaged at work in 2025, the lowest level since 2020.
- Gallup estimates low engagement costs the world economy about $10 trillion in lost productivity.
- Clear goals written to the SMART criteria (specific, measurable, assignable, realistic, time-bound) make performance something both sides can measure.
- Gallup and Workhuman found just 22% of employees get the right amount of recognition, and well-recognized employees were 45% less likely to have left after two years.
- Underperformance is best handled early, privately and in writing, with specific targets and support.
Employees are among the most important assets a company has. A motivated employee can drive real change in a business and, working at a maximum performance level can deliver more than the expected standard, whereas an employee with low motivation usually falls short of it.
How to Improve Employee Performance
Improving employee performance is a priority for every organization, so managers need a consistent process to check that employees are meeting agreed benchmarks. Many companies try different approaches, and the ones that work tend to be systematic: clear goals, regular feedback, recognition and training rather than one-off initiatives.
Here are some of the best tips for improving employee performance in an organization. Applied consistently, these methods give employees clearer direction and more reasons to do their best work.
Give them a vision
Your employees need to understand that they are a part of something larger than themselves and you should make them believe about it. You should tell them about the vision and what they are actually doing in the organization. This vision of doing higher than what they think will itself motivate your employees.
The employees should know that they are improving their lives by doing the job and this is ultimately improving the lives of everyone in the organizations. By honestly doing their jobs they are ultimately benefiting everyone in the organization. This vision and this thinking will certainly bring a high sense of motivation and thus will bring a positive approach in the work they do.
Care for your employees and show recognition
Show that you care for your employees. Bring rewards and recognition schemes and be involved in the employee lives. Employees are the lifeblood of your organization and without them it is impossible to run the business. Therefore it has to be made sure that they are happy and highly motivated in order to increase their performance for the goals of the company.
Always recognize what is good
When someone does something more than expected, recognize it. Tell the employee specifically what was done well and why it mattered. If a client gives positive feedback about an employee, pass it on to that employee. Tell the positive feedback openly in a meeting and this will bring a sense of satisfaction and high motivation to the employee who in turn will produce more and more improvement in the performance.
Bring fun into the organization to support employee performance
Work with no break or variety can lead to boredom and lower efficiency, so bring some fun activities into your organization. Arrange some outdoor team building activities such as a winter retreat, a weekend dinner, a movie premiere night or other outdoor activities. Workplaces can also host events on site, such as live music, food and dancing. Activities like these can support morale, which in turn helps with improving employee performance. 😀
Why Does Employee Performance Need Attention Now?
Employee engagement, a strong predictor of performance, is falling. According to Gallup’s State of the Global Workplace 2026 report, global employee engagement fell to 20% in 2025, its lowest level since 2020. Gallup estimates this costs the world economy about $10 trillion in lost productivity. The 2025 data come from 141,444 employed respondents surveyed between January and December 2025.
Gallup’s 2025 global breakdown was 20% engaged, 64% not engaged and 16% actively disengaged. Manager engagement fell from 31% in 2022 to 22% in 2025, which matters because managers shape how their teams work.
| Region (Gallup, 2025 data) | Employees engaged |
|---|---|
| World | 20% |
| United States and Canada | 31% |
| South Asia | 21% |
| Europe | 12% (lowest region) |
What do engaged teams achieve?
Gallup’s 11th employee engagement meta-analysis (2024), covering 183,806 teams, found that top-quartile engaged teams showed 23% greater profitability, 18% higher productivity in sales and 14% higher productivity in production records and evaluations.
How Do You Set Clear Performance Expectations?
Clear expectations are the starting point, because an employee cannot hit a target that has not been defined. A widely used framework is SMART goals. The SMART acronym was first proposed by George T. Doran in the November 1981 issue of Management Review, and stands for specific, measurable, assignable, realistic and time-bound. Later versions often use attainable, relevant and timely instead.
- Specific: name the exact result, for example the number of support tickets to resolve.
- Measurable: agree how the result will be counted.
- Assignable: state who is responsible.
- Realistic: check the goal against available time, tools and skills.
- Time-bound: set a deadline or review date.
Write the goals down and review them together, so the employee and manager judge performance against the same standard.
Why Are Managers the Biggest Factor in Performance?
According to Gallup, the manager accounts for 70% of the variance in team engagement. In practice, that means day-to-day management habits matter more than company-wide perks. Useful habits include:
- Hold short, regular one-to-one check-ins focused on progress, obstacles and next steps.
- Give feedback close to the event, describing the specific behavior and its effect.
- Ask what support or resources the employee needs, and follow up on what was promised.
- Match tasks to each person’s strengths where possible.
The broader management skills behind these habits are covered in essential skills for effective business management, and the people side of leading change in transformational leadership strategies.
What Makes Employee Recognition Effective?
Recognition works best when it is strategic rather than occasional. Gallup and Workhuman tracked nearly 3,500 employees from 2022 to 2024 and found that just 22% of employees say they get the right amount of recognition. Well-recognized employees were 45% less likely to have turned over after two years.
The research describes five pillars of strategic recognition. Gallup reports that employees whose recognition met at least four pillars were 65% less likely to be actively looking or watching for another job.
| Pillar | What it means in practice |
|---|---|
| Timely | Recognize the work soon after it happens. |
| Specific | Name the exact accomplishment. |
| Values-aligned | Link the work to the organization’s values. |
| Personalized | Deliver it in a way the person appreciates (public or private). |
| From the right people | Include peers and leaders, not only the direct manager. |
For ideas on rewards that go beyond praise, see why and how to reward employees and these corporate gifting tips for employees.
How Should You Handle Underperformance?
Underperformance is easier to fix when it is addressed early. A fair, step-by-step approach looks like this:
- Identify the gap: compare actual results with the written goals, using records rather than impressions.
- Talk privately: describe the gap, ask about causes such as unclear priorities, missing skills, workload or personal issues, and listen.
- Agree on a plan: set specific, measurable targets, the support the company will provide (training, mentoring, tools) and a review date. Many organizations formalize this as a performance improvement plan (PIP).
- Check in regularly: review progress at agreed intervals and record what was discussed.
- Close the loop: recognize improvement when it happens, or move to the next step of the organization’s documented process if it does not.
Employment law differs by country and state, so check local rules and the company’s own policies before formal action.
Which Other Tactics Improve Employee Performance?
- Training and development: close specific skill gaps found in reviews, then check whether results improve.
- Remove obstacles: fix slow tools, unclear approval chains and duplicated work that hold people back.
- Support flexible and remote staff: set clear outputs instead of monitoring hours; see how to overcome remote work challenges.
- Build team connection: shared goals and regular team time help collaboration; see ways to bring your team together.
How Do You Measure Employee Performance?
| Measure | Example | Best used for |
|---|---|---|
| Output (quantity) | Sales closed, tickets resolved | Roles with countable results |
| Quality | Error rate, customer satisfaction scores | Service and production roles |
| Goal completion | Share of SMART goals met by the review date | Project and knowledge work |
| Behaviors | Teamwork and reliability rated in reviews | All roles, alongside results |
| Engagement | Regular employee surveys | Team-level trends over time |
Combining results with behaviors gives a fairer picture than any single number.
Frequently Asked Questions
What is the most effective way to improve employee performance?
The most effective way to improve employee performance is to combine clear, measurable goals with frequent manager feedback. Gallup research finds the manager accounts for 70% of the variance in team engagement, so better day-to-day management usually has the largest effect.
What percentage of employees are engaged at work?
According to Gallup’s State of the Global Workplace 2026 report, 20% of employees worldwide were engaged in 2025, 64% were not engaged and 16% were actively disengaged. In the United States and Canada, 31% were engaged.
Does recognition really improve performance?
Recognition is linked to better retention and engagement. Gallup and Workhuman found well-recognized employees were 45% less likely to have turned over after two years, yet only 22% of employees say they get the right amount of recognition.
What are SMART goals?
SMART goals are objectives that are specific, measurable, assignable, realistic and time-bound. George T. Doran introduced the term in Management Review in November 1981; later versions often substitute attainable, relevant and timely.
What is a performance improvement plan?
A performance improvement plan (PIP) is a written plan that sets out the performance gap, specific targets, the support provided and a review date. It gives the employee a clear, documented chance to improve.
