You made what seemed like a solid hire.

The resume looked perfect. The interviews went well. The references checked out. But three weeks into the job, something feels wrong. Your new developer isn't delivering. Code reviews take forever. Simple tasks drag on. The team is frustrated.

You're not alone. Research shows that 46% of new hires fail within their first 18 months, with technical roles seeing even higher failure rates. The cost? Companies lose an average of $240,000 per failed technical hire when factoring in recruitment, onboarding, lost productivity, and team disruption.

But here's what most engineering leaders miss: the solution isn't always firing and starting over. Sometimes the best developers just need the right support. Other times, you've hired someone who looked good on paper but can't actually do the work.

This guide will walk you through a proven framework for diagnosing underperformance, taking corrective action, and preventing this costly problem in future hires.

Why New Developer Hires Underperform

Before you can fix the problem, you need to understand what's causing it.

Underperformance in new technical hires typically stems from one of five root causes. Identifying which one applies to your situation determines your next steps.

The Skills Gap Problem

The most obvious cause is a genuine skills gap. The developer simply doesn't have the technical abilities the role requires.

This happens more often than you'd think. A 2024 study of 500+ technical hires found that 68% of candidates who passed traditional coding interviews struggled with real production work. They could solve algorithm puzzles but couldn't debug a live API or refactor existing code under realistic conditions.

The issue? Most hiring processes test abstract problem-solving instead of practical, job-specific skills. When candidates face actual work scenarios, the gap becomes obvious. This is exactly why Utkrusht AI's approach focuses on real-job simulations rather than theoretical assessments - placing candidates in live environments where they debug APIs, optimize database queries, and refactor production code reveals their true capabilities before they join your team.

Signs you're dealing with a skills gap:

• Developer can't complete tasks similar to what they claimed expertise in

• Code quality is consistently below team standards

• They struggle with tools and technologies listed on their resume

• Peer reviews reveal fundamental misunderstandings of core concepts

Onboarding and Support Failures

Sometimes the developer has the skills but your organization failed to set them up for success.

Poor onboarding is shockingly common. Only 29% of new hires feel fully prepared after their company's onboarding process, according to recent workplace research. For technical roles requiring deep system knowledge, inadequate onboarding creates cascading problems.

Effective onboarding requires clear documentation of systems and processes, a structured learning path with milestones, an assigned mentor for questions, realistic timeline expectations, and access to all necessary tools and permissions.

Missing any of these elements can make even talented developers appear to underperform.

Cultural and Communication Misalignment

Technical skills matter, but so does team fit. A developer who can't communicate effectively, collaborate with teammates, or adapt to your work culture will struggle regardless of coding ability.

Common cultural misalignment issues include different communication styles than team expects, inability to ask for help when stuck, resistance to feedback or code review processes, mismatched expectations about work hours or availability, and different approaches to problem-solving that clash with team norms.

Unclear Expectations and Role Definition

Sometimes the problem isn't the developer at all. It's that nobody clearly defined what success looks like.

When role expectations are vague, new hires guess at priorities. They work hard on the wrong things. They deliver results that don't match what leadership wanted. Then they're labeled as underperformers.

Red flags that expectations are the problem: no written job description or success metrics, manager and developer have different understanding of priorities, goals keep shifting without clear communication, developer completes assigned work but is still criticized, and no regular check-ins or feedback loops established.

Personal or External Factors

Finally, sometimes personal circumstances temporarily impact performance. Health issues, family emergencies, relocation stress, or other life events can affect even the best developers.

These situations require compassion and flexibility. A normally strong performer going through a difficult period needs support, not termination.

How to Diagnose the Root Cause

Now that you understand potential causes, you need to identify which applies to your situation.

Effective diagnosis requires gathering objective data before making decisions. Too many managers rely on gut feelings or incomplete information, leading to wrong conclusions and poor outcomes.

Step 1: Document Specific Performance Issues

Start by creating a detailed record of actual performance problems. Vague feelings don't help. Specific examples do.

For each concern, document what task was assigned, what was delivered versus what was expected, when the issue occurred, how it impacted the team or product, and any context around the situation.

Example: Instead of "poor code quality," write "Pull request #347 on October 15 contained authentication logic that failed security review. Code didn't follow authentication patterns documented in our security guidelines. Required three rounds of revision and delayed feature release by four days."

This specificity helps you see patterns. Are issues clustered in one technical area? Do they involve specific types of tasks? Is there improvement over time or consistent struggle?

Step 2: Review the Hiring Process

Look back at how you evaluated this person during hiring. What did you actually test?

If you relied heavily on resume screening (tests what candidates claim, not what they can do), theoretical coding challenges (tests algorithm knowledge, not practical skills), or behavioral interviews (tests communication, not technical ability), then you may have hired someone who interviews well but can't perform real work.

Leading platforms like Utkrusht AI address this fundamental challenge by using real-job simulation assessments rather than traditional methods.

When you place candidates in environments mirroring actual work - debugging real code, optimizing actual databases, refactoring production-like systems - you observe how they'll actually perform on the job, reducing the risk of hiring developers who can't deliver in real-world scenarios.

Step 3: Conduct a Structured Evaluation

Schedule a formal evaluation meeting. Come prepared with your documentation. Create space for honest conversation.

Key questions to explore: Does the developer understand what's expected? What obstacles are they facing? How do they perceive their performance? What support would help them succeed?

Pay attention not just to what they say but how they respond. Defensive reactions differ from thoughtful reflection. Excuses differ from acknowledgment with commitment to improve.

Step 4: Gather Team Feedback

Talk to colleagues who work with the developer. Get their perspectives on collaboration, technical skills, and behavior.

Ask specific questions like "How do code reviews typically go with this person?" and "How does their work compare to other developers at similar experience levels?"

Multiple perspectives help you see the full picture. One person's perception might be skewed. Consistent feedback from several teammates reveals truth.

Step 5: Test Current Capabilities

Consider giving the developer a controlled assessment to objectively measure their current skill level.

This isn't about being punitive. It's about getting clear data. A well-designed technical evaluation showing them working through realistic scenarios provides concrete evidence of what they can and can't do.

Modern assessment platforms let you observe developers debugging APIs, optimizing queries, and refactoring code in environments that mirror real work. Watching how someone actually codes, debugs, and problem-solves reveals far more than interview questions ever could.

The Performance Improvement Framework

Once you've diagnosed the root cause, you need a structured plan to address it.

Performance improvement works when you're clear, supportive, and decisive. Ambiguity helps no one. Neither does endless patience without progress.

Create a 30-60-90 Day Performance Plan

Structure your improvement expectations across three phases, each with specific goals and checkpoints.

Days 1-30: Foundation and Clarity

Focus this phase on removing ambiguity and providing support. Write clear performance expectations with specific, measurable goals. Identify 2-3 priority areas for improvement. Establish daily or bi-weekly check-in schedule. Assign a mentor or senior developer for guidance. Provide any training, documentation, or resources needed.

Days 31-60: Skill Building and Progress

This phase tests whether improvement is happening. Track whether tasks are completed on time and to quality standards, if the developer is applying feedback from reviews, if they're asking better questions and showing learning, and if the volume and quality of work is increasing.

Continue regular check-ins. Provide specific feedback after every major task or milestone. Praise improvement. Address ongoing issues directly.

Days 61-90: Assessment and Decision

By day 90, you should have clear evidence of whether this hire will succeed.

Evaluate whether they can now perform core job responsibilities at acceptable quality, if they're meeting productivity expectations for their experience level, if the improvement trajectory has been consistent, if the team is confident working with them, and if you believe they'll continue improving toward full productivity.

If the answer to most questions is yes, continue with normal onboarding. If not, it's time for difficult decisions.

Provide Specific, Actionable Feedback

Generic feedback like "improve your code quality" doesn't help anyone improve. Developers need to know exactly what to change and how.

Structure feedback using this formula: Observation (describe what you saw specifically), Impact (explain why it matters), Expectation (state clearly what should happen instead), Support (offer resources or help to make the change).

This approach is clear without being harsh. It focuses on the work, not the person. It provides a path forward.

Increase Support and Resources

Sometimes developers underperform simply because they're missing critical support.

Support mechanisms that help include pair programming sessions where they work alongside experienced developers, code review buddies who provide extra feedback and mentoring, technical training on specific tools or technologies causing struggle, architecture deep dives to understand system design and patterns, and regular 1-on-1s focused on removing obstacles and providing guidance.

Don't assume people should figure everything out alone. Great teams actively support new members.

Set Clear Consequences

Compassion and clarity go together. Be supportive, but also be direct about what happens if performance doesn't improve.

During your initial performance plan conversation, state clearly what improvement you expect to see, when you'll evaluate progress, and what happens if expectations aren't met.

This honesty respects everyone's time. The developer knows where they stand. You've set clear boundaries. No surprises later.

When to Make the Difficult Decision

Sometimes, despite best efforts, a hire simply isn't working out.

Knowing when to part ways protects your team, your product, and honestly, the struggling developer too. Keeping someone in a role where they can't succeed helps no one.

Signs It's Time to Move On

After implementing your performance improvement plan, watch for these indicators that the situation won't improve:

No meaningful progress despite support: If you've provided clear expectations, regular feedback, mentoring, and resources, but performance remains consistently below standards, the person likely can't do the job.

Skills gap too large to bridge: Some gaps are fixable with training. Others aren't. If the developer lacks fundamental skills the role requires, and can't learn them quickly enough, continuing is unfair to everyone.

Negative team impact: Watch how the underperformance affects others. Are teammates doing extra work to compensate? Is morale suffering? Are projects delayed? One person's struggles shouldn't drag down the entire team.

Lack of self-awareness or accountability: Does the developer acknowledge issues and work to improve? Or do they make excuses, blame others, and resist feedback? Attitude matters as much as ability.

Your time investment becomes unsustainable: If you're spending 50% of your energy on one person while neglecting the rest of the team, something needs to change.

How to Handle Termination Professionally

If you decide to end the employment relationship, do it with respect and clarity.

Before the meeting, consult with HR about your company's termination process, gather documentation of performance issues and improvement efforts, prepare clear explanation of the decision, and arrange logistics like final paycheck and return of equipment.

During the conversation, be direct and clear, briefly explain why, keep it professional (focus on job performance, not character), listen if they want to respond but don't debate the decision, and outline next steps.

The Real Cost of Keeping the Wrong Person

Hesitating to make tough calls costs more than you think.

Beyond the obvious productivity issues, keeping an underperforming developer damages team morale, lowers quality standards, slows product development, increases other people's workload, signals poor leadership, and costs the developer confidence.

The average cost of a bad hire reaches $240,000 when you factor in recruiting, onboarding, lost productivity, and team impact. Every month you wait adds to that total.

Sometimes the compassionate choice is helping someone move on to a role where they can actually succeed.

Preventing Future Hiring Mistakes

The best way to handle underperforming hires is to avoid making them in the first place.

Prevention starts with honest reflection about your current hiring process. If you're experiencing repeated failed hires, something systematic needs to change.

Why Traditional Hiring Processes Fail

Most technical hiring follows the same flawed pattern: screen resumes for keywords and credentials, phone screen with basic technical questions, coding challenge solving algorithm puzzles, behavioral interviews asking hypothetical questions, then make hiring decisions based on performance in these artificial scenarios.

The problem? None of these steps reveal how someone actually works.

Resumes show what candidates claim, not what they can do. Algorithm challenges test problem-solving ability but not practical coding skills. Interviews favor strong communicators over strong practitioners.

The Skills-Based Assessment Approach

Forward-thinking organizations are shifting toward proof-of-skill evaluation methods that test actual job capabilities.

Instead of asking candidates to solve puzzles on a whiteboard, place them in realistic work simulations. Give candidates scenarios mirroring what your engineers face daily: debug an API that's returning incorrect data, optimize a database query causing performance issues, refactor production code to add a new feature, troubleshoot a failing deployment.

Watch how they approach these tasks. Observe their problem-solving process. See how they actually code, debug, and work through challenges.

Organizations using real-job simulation assessments report 73% better performance outcomes in new hires' first 90 days compared to traditional hiring methods. When you test actual capabilities, you hire actually capable people.

Building a Better Hiring Process

Transform your technical hiring by implementing these changes:

1. Define roles around actual work, not credentials

Instead of requiring "5 years Python experience" or "computer science degree," define what someone will actually do. Then design your evaluation to test those specific capabilities.

2. Use work simulations early in the process

Don't wait until final rounds to test practical skills. Screen candidates early using realistic technical assessments. This saves everyone time by identifying skill gaps before investing in multiple interview rounds.

3. Interview only candidates with proven capabilities

Once someone has demonstrated technical proficiency through work simulations, your interviews can focus on culture fit, communication, and motivation. You know they can do the job. Now determine if they'll thrive in your environment. This is the core philosophy behind Utkrusht AI's approach - interview only after you've seen clear proof-of-skill, ensuring you spend valuable engineering time on candidates who've already demonstrated they can handle real work.

4. Set realistic expectations from day one

During final interviews and offers, be crystal clear about what the role involves daily, what challenges exist, what your team culture is like, what support you provide, and what success metrics matter most.

Realistic job previews help candidates self-select. The wrong fits decline. The right fits arrive prepared.

5. Design intentional onboarding

Create a structured 90-day onboarding program with week-by-week learning objectives, assigned projects increasing in complexity, regular check-ins and feedback sessions, clear documentation and resources, designated mentor or buddy, and defined success milestones.

Comparison: Hiring Assessment Methods

Managing Team Morale During Performance Issues

While you work through performance issues with one developer, don't forget about the rest of your team.

Team dynamics shift when one member struggles. How you handle the situation affects everyone's morale and trust in leadership.

Communicate Appropriately

Your team knows someone is underperforming. Pretending otherwise insults their intelligence.

You don't need to share every detail, but provide context: acknowledge that you're aware of the situation, reassure the team that you're addressing it, thank them for their patience and support, and commit to a reasonable timeline for resolution.

Prevent Burnout in High Performers

When one person underperforms, others often compensate. Watch for signs that high performers are burning out from carrying extra weight.

Protective actions include redistributing workload more evenly, bringing in contractors or temp help if needed, adjusting timelines to realistic expectations, recognizing and appreciating extra effort, and checking in regularly on workload and stress levels.

Model the Culture You Want

How you handle performance issues signals your values. Teams watch carefully.

Handle situations with directness (address problems, don't ignore them), fairness (give people reasonable chances to improve), respect (treat struggling employees with dignity), decisiveness (act when situations clearly won't improve), and consistency (apply standards equally).

Key Takeaways

When facing an underperforming new developer hire, remember these critical points:

• Diagnose before deciding - Document specific issues, review your hiring process, and identify root causes before taking action. The problem might be skills, support, expectations, or fit.

• Create structured improvement plans - Give people clear 30-60-90 day plans with specific goals, regular feedback, adequate support, and defined consequences. Ambiguity helps no one.

• Act decisively when needed - If performance doesn't improve despite support, making the difficult decision protects your team, product, and helps the struggling developer move to a better-fit role.

• Fix your hiring process - Repeated bad hires signal systematic problems. Shift from credential-based to skills-based evaluation using real-job simulations that reveal actual capabilities.

• Support your whole team - Communicate appropriately, prevent high-performer burnout, and model the leadership culture you want to build.

The difference between organizations that consistently hire strong performers and those that struggle often comes down to one thing: testing what matters.

As Utkrusht AI exemplifies with their real-job simulation approach, when you evaluate candidates using realistic work environments that mirror actual job requirements, you see proof-of-skill before making offers. You avoid hiring people who interview well but can't perform. You reduce costly mistakes that damage teams and delay products.

The next time you face an underperforming hire, you'll have a framework to diagnose issues, support improvement, and make informed decisions. Even better, you'll have the tools to prevent these situations by hiring people with demonstrated capabilities from the start.