The UAE private-sector workforce grew by 12.4% in 2025, with employment rising by a further 2.5% in the first quarter of 2026. Businesses are continuing to expand, yet finding the right people remains a concern, with 43% of UAE CEOs identifying skills shortages as one of their biggest challenges. The people businesses have already recruited and developed therefore carry considerable commercial value.
Keeping those employees performing well is part of protecting that investment as businesses grow and the demands of individual roles change. Where performance begins to fall, understanding why and whether it can be recovered can make more commercial sense than moving too quickly towards replacement.
Identifying the performance gap
PwC found that 69% of UAE employees surveyed had learned new skills during the previous year, an indication of how quickly the requirements of existing jobs are developing. With businesses adding employees and adopting new technology, someone who was well suited to the job they joined may find that what is expected of them has changed considerably as the company has grown.
That history is useful when performance starts to fall. An employee who previously met the requirements of the role may be struggling with how the job has developed, while someone who has consistently struggled with its core requirements presents a clearer question of capability.
Either way, the concern needs to be defined against the job. Missed key performance indicators (KPI) or work that consistently falls below an agreed standard give both sides something concrete to address around performance expectations, rather than general judgements about attitude or commitment which can blur the line between capability and conduct.
Addressing the cause
With the pace of change brought about by AI and other technology, UAE businesses are changing how they operate and, in many cases, reorganising teams around new ways of working. Employees may find themselves with different responsibilities or less direct management, even though their job title has not changed.
Korn Ferry found that 37% of employees affected by reduced management layers felt directionless, showing how changes in the way a business is organised can affect individual performance.
An employee who hears about a poor performance or performance concerns for the first time at an annual performance review has had little opportunity to correct it. Raising concerns as they appear gives the employee time to respond and the manager a chance to see whether clearer direction or appropriate support improves the result.
If it does, a previously capable employee may return to the required standard without the issue becoming a formal HR process. Implementing timely feedback into your performance management process can help to address issues immediately rather than allowing them to be unaddressed for longer periods.
Performance improvement plans
If clearer direction and support do not improve performance, a performance improvement plan, or PIP, gives the employer a more formal way to deal with the same concerns. It should grow out of the conversations already taking place, with the employee clear about what needs to improve and enough time to show whether they can do it.
That is especially useful in a growing business, where the original problem can easily become obscured as managers change or responsibilities move between teams. A clear record keeps the focus on the employee’s actual performance rather than allowing the process to become a collection of different opinions about them.
If improvement still does not come, any warning or termination needs to follow the employment contract and internal procedures alongside applicable UAE labour requirements.
There is a commercial judgement to make too. Replacing an employee means recruiting again and rebuilding knowledge of the role, at a time when 43% of UAE CEOs already identify skills shortages as a major concern. Keeping somebody who cannot meet the required standard carries its own cost, particularly when other employees have to compensate.
As UAE businesses grow and jobs change, managing underperformance well means understanding whether an employee with valuable experience can adapt to what the role now requires. Where they can, the right support may retain skills the business would otherwise have to replace. Where they cannot, addressing the problem early and clearly puts the employer in a better position to take the appropriate next step.
Tips for employee’s performance management:
- Treat performance as an ongoing process that requires regular monitoring and management.
- Integrate a employee performance management software which allows line managers and employees to access a central source for performance management including noting 1 to 1 conversations, performance goals, constructive feedback, KPIs, objectives to refer back to during performance appraisals.
- Involve employees in their performance reviews. This might seem obvious but address all concerns, use specific examples, monitoring progress of performance improvement plan to help employees understand where they are falling short.
- It is equally important to train managers on how to manage employee performance. This could be training them on management style, how to address underperforming employees, giving feedback in a constructive manner, setting employee goals, employee engagement and how to conduct regular check ins.
How Sovereign can support
Sovereign supports employers across the UAE and wider GCC with employee performance issues, from early concerns through to formal action where required.
Our HR services team can help employers assess individual cases and put appropriate improvement measures in place. Where a formal process is required, we can support performance improvement plans and subsequent action, while helping employers maintain the documentation and procedures needed throughout.
