Bad Performer on the Team: A Practical Playbook for Mid-Market Businesses

You've just finished a call with your regional manager in Germany. The message was familiar: "I know Marcus isn't delivering, but HR says we can't just let him go." Meanwhile, your US sales lead is costing you deals, and your UK compliance officer keeps warning about tribunal risk. You're running a 400-person company across six countries, and one bad performer in each market feels like a strategic crisis you can't solve.

Here's what nobody tells you: "can't fire" almost always means "can't fire immediately without process." The path forward exists. It just requires knowing which levers to pull in which jurisdiction, and when a negotiated exit beats a drawn-out capability process.

This playbook is built for mid-market leaders managing distributed teams across multiple countries. You'll find the legal principles, documentation standards, and strategic options that turn paralysis into action, whether you're dealing with a struggling hire in Frankfurt, a misclassified contractor in California, or a performance issue that's been festering for months.

Key Takeaways for Mid-Market Leaders Managing Poor Performers

Poor performance is a capability or output issue where an employee repeatedly fails to meet documented role requirements despite having the time, tools, and training needed to do the job. This definition matters because it separates performance problems from misconduct, which follows a different (often faster) disciplinary path.

The fear of being "stuck" with a bad performer typically stems from three sources: genuine legal constraints in certain jurisdictions, conflicting advice from multiple vendors and advisors, and weak documentation that makes any exit risky. All three are solvable.

According to Teamed, for mid-market employers operating across five or more countries, the most common root cause of avoidable wrongful-termination disputes is inconsistent documentation standards between countries rather than the termination decision itself. When your UK team documents performance one way, your German team another, and your US team barely documents at all, you've created risk that has nothing to do with local law.

By the end of this playbook, you'll understand:

• The legal grounds for terminating an employee for poor performance across the UK, Europe, and the US
• Why mid-market companies struggle more than enterprises or startups with firing poor performers
• How to document poor job performance so it supports both improvement and defensible exit
• The step-by-step process for safe termination when a PIP fails
• How your hiring model (contractor, EOR, or entity) shapes your termination options
• Prevention strategies that reduce bad hires before they become bad performers

What Happens If You Hire a Bad Performer and Cannot Fire Them

The operational cost of a poor performer is typically concentrated in management time and delivery delays, with U.S. employees spending 2.8 hours per week dealing with workplace conflict alone. CFO-grade tracking should include a weekly estimate of manager hours diverted and the downstream impact on revenue timelines, not only salary cost.

Consider a hypothetical European fintech with 300 employees. Their US sales lead has missed quota for three consecutive quarters. The CEO wants action, but the VP of People has heard conflicting advice: the EOR provider says termination requires cause, external counsel says at-will applies, and the sales director who hired this person insists they just need more time.

While leadership debates, the damage compounds. The sales team watches underperformance get tolerated. Two strong performers start interviewing elsewhere. Pipeline reviews become exercises in excuse-making. Customer renewals slip because the team is managing around one person instead of closing deals.

"Cannot fire" in this scenario doesn't mean the law prevents termination. It means the company lacks confidence in its process. That's a different problem, and it's fixable.

The real costs of tolerating poor work performance extend beyond the individual's salary. Project delays cascade into missed revenue targets. High performers disengage or leave, with disengaged workers costing $1.9 trillion annually in lost productivity in the U.S. alone. Manager burnout accelerates. In regulated industries like financial services or healthcare, underperformance in compliance-adjacent roles creates external risk that boards and investors will eventually notice.

Legal Grounds to Terminate an Employee for Poor Performance

In the UK, employees generally gain the right to claim ordinary unfair dismissal after two years of continuous employment, which materially increases termination process risk and documentation requirements for UK-based hires. But discrimination and whistleblowing claims can be brought from day one, so performance management must be consistent and evidence-based from the start.

Termination for poor performance is possible in virtually every jurisdiction if you follow a fair process: clear expectations, documented feedback, and a reasonable chance to improve. The question isn't whether you can terminate, but whether you've built the evidence to defend that decision.

The US presents a paradox. At-will employment theoretically allows termination for any reason, but federal and state protections for discrimination, retaliation, and leave create dozens of exceptions. A performance termination that correlates with a protected characteristic (age, disability, recent medical leave) invites scrutiny. The at-will doctrine provides no shield if the employee can show similarly situated colleagues were treated differently.

In Germany, the statutory notice period is at least four weeks to the 15th or end of a month and increases with tenure up to seven months after twenty years of service. Works councils can have information and consultation rights in dismissals, meaning performance exits may require additional procedural steps and longer timelines than in the UK.

France requires a formal procedure including a pre-dismissal meeting and written notification. Spain's objective dismissal routes require specific written justification and can trigger mandatory severance calculations.

The common thread across jurisdictions: capability-based terminations fail defensibility tests when managers cannot show a dated paper trail linking role expectations, specific shortfalls, support provided, and follow-up reviews.

Why Mid-Market Companies Struggle with Firing Poor Performers

Mid-market companies occupy an uncomfortable middle ground. You're large enough to face regulatory scrutiny and tribunal risk with 515,000 tribunal claims pending in the UK by Q3 2025—but you don't have in-house employment counsel in every country. You're sophisticated enough to know that firing someone in Germany differs from firing someone in Texas, but you're piecing together that knowledge from vendors with conflicting incentives.

According to Teamed, mid-market companies (200 to 2,000 employees) are most likely to feel "stuck" with a bad performer when they hire internationally via mixed models (contractor, EOR, entity) without a single performance process that can be applied consistently across all models.

The structural challenges are predictable. Your German country manager interprets local law conservatively because they've heard horror stories about works councils. Your US team assumes at-will means they can act quickly, then gets surprised by state-specific protections. Your EOR provider gives generic guidance that doesn't account for your specific situation.

Internal politics compound the problem. The executive who championed a hire resists admitting the mistake. The board asks why you're paying severance when "we just hired this person." Finance questions the cost of a negotiated exit without understanding the cost of a tribunal claim.

In regulated industries, the stakes amplify. A mishandled termination in financial services can trigger regulator questions. A discrimination claim in healthcare creates reputational risk that extends beyond the individual case.

Managing Poor Work Performance in the UK and European Markets

UK employment law follows a staged process for capability dismissals: informal feedback, formal warnings, and a documented opportunity to improve through a Performance Improvement Plan. The Employment Rights Act changes taking effect in 2027 will reduce the unfair dismissal qualifying period from two years to six months, making early documentation even more critical.

A Performance Improvement Plan (PIP) is a time-bound, written performance management document that defines specific performance gaps, measurable targets, support actions, review dates, and the consequences of not meeting targets. A PIP differs from an informal coaching plan in that it defines explicit consequences of non-improvement and includes dated review checkpoints designed to support termination defensibility.

Protected characteristics require careful consideration. If an employee's performance issues might relate to a disability, health condition, or pregnancy, your approach must account for potential discrimination claims. This doesn't mean you can't address performance, but it does mean you need to document that you've considered reasonable adjustments.

According to Teamed, the most reliable early indicator that a PIP will not succeed is repeated failure to meet targets by the first formal checkpoint date, which is why PIPs should always include at least one intermediate review milestone rather than only an end date.

European tribunals closely review whether policies were followed and a fair chance to improve was given. A rushed process that skips steps creates more risk than a slower process with proper documentation.

Why You Should Not Be Fired for Poor Performance Without Warning

Except for rare misconduct or clear probationary failures, firing for poor performance without prior warning creates legal and reputational risk that far exceeds the cost of a proper process.

Surprised employees are more likely to challenge and escalate. They're more likely to believe the real reason was discriminatory. They're more likely to share their experience publicly. Even in at-will US states, a pattern of surprise terminations creates exposure if any of those employees belong to protected classes.

A fair warning process follows a predictable structure. First, set written expectations that the employee acknowledges. Second, give specific feedback with examples and support. Third, allow reasonable time to improve, typically 30 to 90 days depending on role complexity. Fourth, document each step with dates, attendees, and agreed next actions.

This process either fixes the performance issue or creates defensible evidence for termination. Both outcomes serve the business better than a surprise exit that generates legal exposure and team anxiety.

In the UK and Europe, due process isn't optional. In the US, it's the difference between a clean separation and a discrimination claim.

How Mid-Market Companies Should Document Poor Job Performance

According to Teamed, capability-based terminations in Europe and the UK most often fail defensibility tests when managers cannot show a dated paper trail linking role expectations, specific shortfalls, support provided, and follow-up reviews.

Documentation serves two purposes: it's a management tool that can drive genuine improvement, and it's legal evidence that protects the company if improvement doesn't happen. Good documentation is behaviour-based, specific, and dated. Bad documentation uses vague labels ("attitude problem," "not a culture fit") that invite challenge.

Strong PIP components include measurable goals tied to the actual job requirements, specific timeframes with interim checkpoints, support commitments (training, coaching, reduced workload), and clear consequences if targets aren't met. The document should be signed by the employee, even if they disagree with the assessment.

Consistency across teams and locations reduces discrimination risk. If your UK team runs rigorous PIPs while your US team handles performance informally, you've created a pattern that plaintiffs' attorneys will notice.

Across EU and UK operations, performance data that includes behavioural notes, health information, or disciplinary records can constitute personal data requiring GDPR-compliant handling, including purpose limitation and access controls.

Step by Step: How to Terminate an Employee for Poor Performance Safely

The highest-probability cost driver in multi-country underperformance exits is paid time during notice, because many European jurisdictions require continued salary and benefits throughout notice even when duties are reduced or removed.

Step 1: Confirm the foundation. Verify that role expectations are in writing, that the employee received them, and that persistent poor work performance exists against those documented standards.

Step 2: Initiate a formal PIP. Define specific gaps, measurable targets, support actions, review dates, and consequences. Include at least one interim checkpoint, not just an end date.

Step 3: Execute the PIP with documentation. Hold scheduled check-ins, document progress or lack thereof, provide committed support, and maintain records of all conversations.

Step 4: Assess PIP outcome. If targets aren't met, prepare the termination decision with HR and, where appropriate, legal counsel or a strategic advisor who understands the specific jurisdiction.

Step 5: Conduct the termination meeting. Keep it factual and respectful. Suggested language: "We've reviewed the objectives set on [date] and the progress against them. Based on the evidence, we're ending your employment for performance reasons. We'll confirm details, including notice and next steps, in writing."

Step 6: Handle post-termination administration. Document the decision, process final pay and benefits per local law, recover company assets, and plan internal communications that protect privacy while addressing team concerns.

The process looks similar across jurisdictions, but the procedural details differ. US at-will terminations can move faster but still require documentation. UK capability dismissals require notice and often consultation. German exits may involve works council steps. EOR arrangements require coordination with the provider.

Global Hiring Models That Reduce Termination Risk for Mid-Market Companies

Your hiring model shapes your termination options before you ever face a performance issue. Understanding these differences prevents the "I can't fire them" surprise.

Contractors are independent service providers engaged through service agreements. Separation is typically simpler, governed by contract terms rather than employment law. But misclassification risk is real: if you manage a contractor like an employee (setting hours, requiring specific tools, integrating them into teams), you may face employment claims regardless of the contract language. In the UK, medium and large companies engaging personal service companies must apply IR35 status assessment rules, and misclassification disputes can surface during performance-related contractor terminations if the relationship resembles employment.

Employer of Record (EOR) arrangements make the EOR the legal employer in-country while you direct the work. An EOR differs from a local entity in that the EOR is the legal employer of record in-country, while a local entity makes the client company the legal employer and shifts more compliance obligations and control directly onto the client. Termination must follow local law and the EOR contract. Some EOR providers limit how and when terminations for poor performance can occur, so review your agreement before assuming you have flexibility.

Local entities give you maximum control but maximum responsibility. You're the employer, subject to all local employment law, with full accountability for process compliance.

Choose a capability process (warnings plus a PIP) when performance issues are skill or output related, the employee has capacity to improve, and there's no clear misconduct to rely on. Choose a negotiated exit (settlement agreement) when legal risk is high, the role is business-critical, and a faster separation timeline is worth a defined cash payment to cap dispute exposure.

Teamed helps mid-market companies evaluate which model fits each market and role, designing paths to graduate from contractors to EOR to entities as headcount grows, with termination implications factored into the strategy from the start.

Preventing Bad Hires in Companies Above 50 Employees

The best way to avoid being stuck with a bad performer is to not hire them in the first place. As companies scale past 50 employees, informal hiring practices that worked at 20 people start creating expensive mistakes.

Structured interviews with consistent criteria reduce bias and improve prediction. Skills-based assessments aligned to actual job requirements filter out candidates who interview well but can't execute. References focused on comparable performance contexts (similar role, similar company size, similar market) provide signal that generic reference checks miss.

Clear role expectations and success metrics defined before the hire give both parties a shared understanding of what good looks like. Probationary periods, where lawful, create a lower-friction window for capability separation if early performance concerns emerge. Choose probation-driven exit when the employee is still within a valid probation period and performance concerns are documented early, because many jurisdictions view probation as the lowest-friction window for capability separation when process is followed.

Cross-border hiring adds complexity. Probation arrangements differ across the US, UK, and Europe. Interview practices that are standard in one country may create legal exposure in another. Teamed helps companies adapt hiring practices to local norms while maintaining global standards that reduce bad-hire risk.

From Bad Hire Anxiety to Confident Global Hiring Decisions

The fear of being stuck with a bad performer is real, but it's rarely as absolute as it feels in the moment. There's almost always a structured path forward: performance management, redeployment, or negotiated exit.

The companies that handle these situations well share common traits. They document consistently across all countries and employment models. They run transparent, staged processes that either fix performance or build defensible exit evidence. They choose hiring models that fit their risk tolerance and growth stage. And they don't try to master every country's employment law themselves.

What mid-market leaders need isn't encyclopaedic knowledge of German works councils or California's latest employment legislation. They need a coherent strategy across markets and models, with access to specialists who can translate that strategy into compliant action when situations get complex.

If you're facing a sensitive performance issue across borders, or if you're realising that your current vendor mix is creating more confusion than clarity, talk to the experts at Teamed for strategic guidance on your specific situation.

FAQs About Managing Poor Performers You Cannot Easily Dismiss

How long should a performance improvement plan last in different countries?

There's no universal length. A PIP must allow a fair chance to improve and reflect local expectations. In the UK, 30 to 90 days is common depending on role complexity. Some European jurisdictions expect longer timelines for senior roles. Seek jurisdiction-specific advice before setting timelines, and always include interim checkpoints rather than only an end date.

How do employer of record arrangements affect terminating poor performers?

Termination must follow local law and the EOR contract. Review your agreement to understand what process the EOR requires and what role you play in documentation and decision-making. Typically, you'll work through the provider rather than acting directly, and the EOR's contract terms may constrain your options.

What severance is typical for termination for poor performance in Europe?

Severance varies widely by country, contract terms, and negotiation. UK statutory redundancy pay is calculated using age bands and a cap on a week's pay that changes annually. A settlement agreement differs from a standard termination letter in that it's a mutual contract exchanging compensation for waived claims, rather than a unilateral notice of termination. Don't assume a standard, and get local guidance on fair, defensible packages.

How should I communicate a performance-based termination to the remaining team?

Protect the departed employee's privacy. Focus on the plan ahead: workload redistribution, team priorities, and your commitment to performance and fairness. Avoid sharing details of the performance issues or exit terms. The goal is to reassure the team that you handle these situations professionally, not to justify the specific decision.

What is mid-market and why does it matter for handling poor performance?

Mid-market companies typically have 100 to 1,000 employees, often with operations across multiple countries. They're complex enough to face real legal and cultural risk from mishandled terminations, but they usually lack in-house global employment expertise. This creates a gap where strategic guidance matters more than it does for startups (simpler situations) or enterprises (dedicated legal teams).

Can I terminate an employee solely for poor performance without offering another role?

Often yes, if a fair process was followed. But some jurisdictions and union settings expect consideration of redeployment before capability dismissal. Redundancy differs from performance termination in that redundancy must be driven by role or business need and requires objective selection criteria, whereas performance termination must be driven by documented capability gaps and a fair improvement process. Get local advice before assuming redeployment isn't required.

What should I do if legal counsel and my employer of record give conflicting advice about a termination?

Document both views and ask each party to outline the specific risks they see. Decide based on your risk appetite and business priorities, ideally with a strategic advisor who can reconcile legal, commercial, and operational angles. Conflicting advice often reflects different risk tolerances rather than different facts.