Underperformance in Teams: How HR Teams Prepare Team Leads for This Leadership Challenge

When a team lead does not know how to handle underperformance within their team, this is not an isolated problem – it is a leadership development problem that HR can address directly. Many team leads are former peers who were never taught how to communicate performance expectations clearly, conduct difficult conversations, or identify underperformance early. The consequences range from declining team productivity to the resignation of high performers who do not accept a tolerance for underperformance. With the Sharpist Hybrid Journey, team leads receive exactly what they need in these situations: structured reflection, concrete conversation preparation, and practical exercises – scalable across the entire leadership level.

The Topic in a Nutshell

Why Underperformance at the Team Lead Level Becomes a Leadership Problem

When a team member consistently falls short of expectations, the cause is rarely attributable to the employee alone. Unclear communication of goals, lack of feedback, or role ambiguity often play a decisive role – factors that the team lead directly influences. As quality.de describes, underperformance often manifests through subtle signals: declining participation in meetings, changed body language, or unexplained setbacks in achieving goals. Those who cannot read these signals or do not know how to respond let the problem grow.

There is also a systemic dimension: if underperformance is tolerated, high performers lose motivation. They carry the additional workload, see that a lack of performance goes unaddressed – and resign. For HR, this means: every unaddressed low-performance case is a risk to the entire team dynamic and to the retention of key personnel.

The Sandwich Position: When Team Leads Must Manage Former Peers

Many team leads were peers only yesterday. The role transition happens formally overnight, but emotionally over months. Suddenly, they must demand performance from people with whom they previously collaborated as equals – without formal training in conversation management, without experience in conflict situations, and often without organizational support. As Semigator Enterprise describes, the leap from an individual contributor role to leadership responsibility involves far more than a new title: motivating teams, making difficult decisions, resolving conflicts – all of these are skills that must be learned.

The consequence is often conflict avoidance. The performance conversation is postponed, feedback remains vague, expectations are not clearly formulated. HR can intervene specifically here: by equipping team leads not only with role descriptions but with concrete leadership competencies – through coaching that addresses real situations.

What the Kienbaum Study Reveals About Low-Performance Management

The data is clear: according to the Kienbaum Performance Management Study 2024, half of all companies do not conduct systematic management of low performers. While 52 % of organizations take clear measures in cases of overachievement, this proportion drops to just 35 % for underachievement. Furthermore, only about a third of the companies surveyed provide their leaders with modern tools and corresponding training for implementing a performance culture.

This creates a structural deficiency: team leads are confronted with the expectation of living a performance culture – but without the tools and competencies required to do so. For L&D teams, this means: developing team leads in managing underperformance is not a nice-to-have measure, but a strategic necessity.

The 5 Most Common Barriers Preventing Team Leads From Taking Action

Even when team leads recognize underperformance, they often do not act. This is not due to a lack of will, but to concrete psychological and structural barriers. It is important for HR to understand these barriers – because they determine which type of development measure actually works.

All five barriers can be resolved through targeted coaching. What matters is that HR does not merely offer one-time training sessions, but creates a continuous development structure in which team leads can regularly work on real situations.

The Cost of Inaction: A Calculation for L&D Leaders and CHROs

Underperformance has a price – and it is higher than most investments in leadership development. According to the Gallup State of the Global Workplace 2026 Report, only 20 % of employees worldwide are truly engaged – costing the global economy 10 trillion US dollars in lost productivity. The largest decline in manager engagement occurred between 2024 and 2025 – a drop of 5 points from 27 % to 22 %. And Gallup consistently shows: managers are responsible for 70 % of the variance in team engagement. When team leads themselves are not engaged or cannot manage underperformance, the problem multiplies.

ROI Calculation Example: What an Unresolved Low-Performance Case Really Costs

Let us take a concrete example: a team lead manages 10 employees. Two of them show persistent underperformance – a realistic proportion according to industry standards. The productivity loss of a low performer is estimated at 25–40 % of salary costs. At an average salary of €55,000, this results in annual productivity losses of around €33,000 in this team alone.

On top of this come turnover costs: when a high performer resigns because they do not accept a tolerance for underperformance, costs of 100–150 % of annual salary arise for recruiting, onboarding, and productivity loss during the induction period. Studies show that the main reasons top performers resign are lack of purpose, lack of development opportunities, and lack of appreciation – not compensation. Untreated underperformance sends exactly these signals.

The investment in 6 months of digital 1:1 coaching for a team lead is far below this. Even if only one of the two low-performance cases is resolved through better leadership, the benefit clearly exceeds the coaching investment. For CHROs, this is a solid ROI argument – especially when the development measure is scalable and measurable.

Differential Diagnosis: Not All Underperformance Has the Same Cause

A common mistake made by team leads without coaching support: they treat all low-performance cases the same way. Yet the causes vary considerably – and the measure must match the cause. As quality.de describes, causes of underperformance can range from skill gaps to motivation problems to personal difficulties or role ambiguity.

For HR, this means: a coaching program for team leads must explicitly foster diagnostic ability. Team leads must learn to ask before every intervention: "What is the actual cause of this underperformance – and what is my contribution to it?" This reflection work is a central element of 1:1 coaching.

How Coaching Specifically Enables Team Leads

Coaching for team leads in the context of underperformance works on two levels simultaneously: it develops leadership competence – and it accompanies concrete, real situations. This is the decisive difference from general leadership training. According to Gallup's State of the Global Workplace 2025, managers who undergo coaching skills training show a 20–28 % improvement in their own performance – and their teams experience up to 18 % increase in engagement. These gains persist for over a year.

Particularly effective here is the combination of regularity and practical relevance. One hour of coaching every two weeks over six months has a more sustainable effect than a two-day workshop – because team leads experience concrete situations between sessions that they can reflect on in the next session. The GROW model offers a practical conversation structure: Goal (What is the aim of the conversation?), Reality (What is the current situation really like?), Options (What courses of action are available?), and Will (What will the employee specifically do?). Structured conversation guides such as the GROW model help maintain motivation and keep the conversation solution-oriented.

Between coaching sessions, team leads need concrete micro tasks that ensure transfer: conducting a 15-minute feedback conversation according to GROW, reflecting on their own reaction in a difficult moment, formulating expectations in writing. This is precisely the logic underlying Sharpist's personalized coaching approach [URL NOT MAPPED].

Traditional Training vs. E-Learning vs. Digital Coaching: A Comparison

For L&D leaders seeking a scalable format for their team leads, the question of format is crucial. The following overview shows how the three most common approaches differ with regard to key success criteria:

The data confirms this: according to Gallup, manager thriving increases from 28 % to 34 % when training is used alone. When training is combined with ongoing encouragement and development, this figure rises to 50 %. Continuity beats intensity – this is the central argument for coaching over the classic seminar approach.

How Sharpist Specifically Supports Team Leads With Underperformance

The Sharpist Hybrid Journey combines human coaching, an AI coach, and micro tasks into a continuous learning experience – making it particularly suited for developing team leads in underperformance situations. For HR teams, this specifically means:

In 1:1 coaching, team leads work with a certified coach from Sharpist's certified coach network on real situations: an upcoming performance conversation, an escalated conflict situation, or the question of how to communicate expectations clearly. Coach matching takes into account the team lead's specific goals and professional context – with a 97 % matching success rate on the first attempt.

Between sessions, the AI coach is available around the clock – without the need for scheduling an appointment. A team lead who needs to have a difficult conversation in 30 minutes can prepare in a structured way immediately beforehand: clarifying the conversation's goal, anticipating possible reactions, reflecting on their own stance. With a rating of 4.5/5 stars and five selectable coaching styles, the AI coach is not a generic chatbot, but a personalized sparring partner.

Micro tasks translate coaching insights into daily work: a maximum of 5 minutes per task, individually assigned by the coach, with a 95 % positive rating. A typical task: "This week, conduct a 15-minute feedback conversation according to the GROW model and note what you learned about your conversation management." These micro actions ensure transfer – and make behavioral changes visible to HR.

For L&D teams, the L&D dashboard offers real-time analytics: which team leads are actively working on performance topics? Which aha moments have been captured? How are engagement values developing over time? This creates the foundation for a data-driven ROI argument to management – without administrative effort.

Sharpist customers such as Palfinger recorded a 20 % decrease in absences – an indicator that directly correlates with the quality of leadership at the team lead level. LVMH achieved an 18 % improvement in leadership competencies, and Miro achieved 100 % retention of key personnel during a restructuring – a direct result of leaders not being left alone during critical phases.

In 5 Steps to the First Performance Conversation: A Checklist for HR

When HR teams prepare team leads for their first structured underperformance conversation, a clear step-by-step logic helps. The following checklist can be used as a basis for coaching sessions or as a standalone preparation tool:

Conclusion

Underperformance within a team is not an inevitable phenomenon – it is a solvable leadership problem. And the solution does not begin with the low performer, but with the team lead: with the ability to recognize underperformance early, correctly identify the cause, and conduct the conversation constructively. HR teams that structure this development in a scalable way are not merely investing in individual leaders – they are building a performance culture that supports the entire organization.

The data is clear: according to the Kienbaum Performance Management Study, only a third of companies systematically address underachievement. Those who invest here gain a measurable competitive advantage – in retention, productivity, and team dynamics.

The most important recommendations for action for HR teams at a glance:

If you would like to learn how Sharpist can specifically strengthen your team leads in managing underperformance, speak with our team: Request Demo.

FAQ

How Can HR Teams Identify Early That Team Leads Are Struggling With Underperformance?

Typical indicators include increasing turnover in specific teams, low leadership scores in employee surveys, or escalated individual cases that overwhelm the team lead. Frequent absences or declining team productivity can also be symptoms. Structured 360-degree feedback helps systematically identify skill gaps in managing underperformance – before they develop into more serious problems.

Which Coaching Formats Help Team Leads Most Effectively With Difficult Performance Conversations?

The most effective approach is a combination of regular 1:1 coaching based on real cases and situational support between sessions. The proven benefits of executive coaching are particularly evident when coaching is applied continuously rather than as a one-off. Complementary micro tasks – such as preparing a conversation according to the GROW model – ensure transfer into daily work.

How Can I Scale a Coaching Program for Team Leads in a Larger Organization?

The key lies in a flexible credit system that distributes resources according to need, and a digital coaching platform that minimizes administrative effort. Sharpist enables HR teams to provide coaching access for groups, track progress centrally, and redistribute credits from less active to more active users – without manual administrative effort.

How Do I Measure the ROI of a Coaching Program for Team Leads to Present to Management?

Relevant KPIs include engagement values before and after coaching, absence rates, turnover in coached teams, and direct leadership competency scores from 360-degree feedback. Sharpist customers such as IKEA Switzerland recorded +8–10 % in their leadership index, while Palfinger saw a 20 % decrease in absences. Sharpist's L&D dashboard provides this data in real time – including industry benchmarking.

How Do I Get Started With a Coaching Program for Team Leads if I Have No Experience With Digital Coaching Yet?

A proven starting point is a pilot program with 10–20 team leads that defines concrete development goals and establishes measurement criteria from the outset. The success rates of coaching programs depend heavily on the quality of preparation: securing leadership buy-in, starting coach matching early, and scheduling the first session within the first two weeks after program launch. Sharpist supports HR teams throughout this process – from onboarding to the first ROI report.