Dealing with Difficult Employees: Strategies for Business Owners
Introduction
As a business owner, managing difficult employees can be one of the most challenging aspects of running a company. Whether it’s poor performance, disruptive behaviour, or a negative attitude, how you handle these situations will impact your workplace culture, productivity, and even your legal standing.
Unlike large corporations with dedicated HR teams, small and medium-sized business owners often have to address these issues directly. This blog provides practical, legally compliant strategies to help you manage difficult employees while protecting your business and sustaining a positive work environment.
Step 1: Identify the Root Cause
Before taking action, it’s essential to determine why an employee is behaving in a challenging way. Common reasons include:
Personal Issues – Stress, health concerns, or family matters can affect performance.
Lack of Engagement – If employees feel undervalued, they may become disengaged.
Role Confusion – Unclear job responsibilities can cause frustration.
Toxic Workplace Dynamics – Issues such as office gossip, poor leadership, or unresolved conflict can create tensions.
Skills Gaps – Employees may be struggling due to a lack of training or experience.
For small business owners, addressing the root cause early can prevent the situation from escalating into a bigger issue.
Step 2: Address Issues Early and Professionally
Difficult employees won’t improve on their own. Business owners must take a proactive approach while remaining professional and fair.
✔ Schedule a Private Conversation – Meet one-on-one with the employee in a neutral setting.
✔ Be Direct but Constructive – Clearly explain the issue, using specific examples rather than general complaints.
✔ Listen to Their Perspective – Employees may reveal underlying issues that can be resolved with simple adjustments.
Example: Instead of saying, “You have a bad attitude and it’s affecting the team,” try, “I’ve noticed you’ve been short with colleagues during meetings, which is creating tension. Is there something on your mind?”
If the employee is experiencing personal issues, offering flexibility (within reason) could improve their performance. If the issue is workplace-related, adjustments may be needed to improve processes or team dynamics.
Step 3: Set Clear Expectations and Consequences
Many performance or behaviour issues stem from a lack of clear expectations. Business owners must ensure that all employees understand what is required of them.
Outline Responsibilities Clearly – Every role should have a written job description.
Define Acceptable Workplace Behaviour – Make sure employees understand your company’s values and expected conduct.
Set Measurable Improvement Goals – Clearly explain what the employee must do to improve and by when.
Document Everything – Keep a written record of discussions, warnings, and improvement plans.
Step 4: Offer Support and Training
Not all difficult employees are intentionally problematic—some may be struggling due to a lack of training or support. Providing development opportunities can turn a struggling employee into a valuable asset.
✔ Provide Additional Training – If an employee lacks key skills, offer training or mentoring.
✔ Make Reasonable Adjustments - Providing appropriate workplace adjustments can help employees perform at their best, whether they are facing health challenges, personal difficulties, or other barriers to productivity. Examples include offering flexible working hours, adjusting workloads or providing ergonomic office equipment.
✔ Encourage Career Growth – Employees who feel stagnant in their roles may become disengaged. Discuss development opportunities where appropriate.
Step 5: Implement Disciplinary Action if Necessary
If an employee continues to display difficult behaviour despite support and clear expectations, business owners must take formal action.
Follow the ACAS Code of Practice – Ensure disciplinary actions are fair, consistent, and legally compliant.
Invite to disciplinary – If informal discussions fail, the next step is to commence disciplinary proceedings which may consist of an investigation meeting, a disciplinary hearing and an outcome such as a written warning outlining concerns and required improvements.
Consider Mediation – If workplace disputes are involved, professional mediation can help resolve conflicts.
Last Resort: Dismissal – If an employee continually underperforms or disrupts the business, dismissal may be necessary. However, this must be done legally to avoid unfair dismissal claims.
Legal Note: Currently employees with over two years of service have the right to claim unfair dismissal under UK law. Proper documentation and adherence to due process are crucial.
Step 6: Protect Your Business and Maintain Team Morale
A difficult employee can negatively impact the wider team, leading to low morale and decreased productivity. As a business owner, it’s essential to protect your company’s culture while keeping employees engaged.
✔ Encourage Open Communication – Create a workplace culture where employees feel comfortable raising concerns.
✔ Recognise and Reward Good Employees – Difficult employees shouldn’t overshadow high-performing staff. Regularly acknowledge those who contribute positively.
✔ Lead by Example – Demonstrate professionalism, fairness, and consistency in all employee interactions.
Conclusion
Managing difficult employees is one of the toughest responsibilities for business owners, but handling issues professionally and fairly can prevent workplace disruption and legal risks.
By addressing concerns early, setting clear expectations, and offering the right support, many employees can turn their performance around. However, when disciplinary action or dismissal is necessary, following UK employment laws is essential to protect your business.
If you need tailored HR support or advice, Regent HR is here to help. Contact us for expert guidance on managing employee relations effectively and legally.