The reluctance to have the conversation
Performance conversations with vendors are often avoided for longer than they should be. The reasons are predictable: the relationship is otherwise good, the vendor has been in place for a long time, the problem seems like it might resolve itself, and raising it formally feels disproportionate.
The result is that small issues compound into significant ones before anyone addresses them. By the time the conversation happens, it's a crisis rather than a correction, and the relationship often takes more damage from the late intervention than it would have from an early one.
Addressing vendor performance issues early, clearly, and with supporting data is both better for the relationship and better for your operation. This guide covers how to do it.
Before the conversation: make sure you have the evidence
The single biggest mistake in vendor performance conversations is having them on the basis of impressions rather than data.
"We feel like the quality has slipped" is much harder to respond to productively than "inspection scores have declined from 87/100 in January to 71/100 in April, and complaint volume is up 40% over the same period."
The first version invites defensiveness and denial. The second version is a fact pattern that both parties can examine together.
Before having any formal performance conversation, prepare:
- Relevant inspection scores or audit findings, with dates and specific areas
- Complaint records, with dates and details
- SLA performance data (response times, completion rates)
- Any previous communications about performance concerns
- The relevant clauses from the vendor's service agreement
With this preparation, the conversation has a foundation. Without it, you're relying on the vendor to accept your characterisation of their performance, which most won't.
Framing the conversation constructively
How you open the conversation sets the tone for everything that follows.
A framing that leads with blame is less likely to produce a useful outcome than one that leads with shared problem-solving. Compare:
- "We're not satisfied with your performance and you need to explain yourself."
- "We've been tracking some performance trends that concern us, and we want to understand what's driving them before we decide what to do."
Most persistent performance issues have a root cause that the vendor hasn't addressed, often because they don't know you've noticed, or because there's an operational problem they haven't been able to resolve. Common root causes include:
- Understaffing on specific shifts or sites
- A misunderstanding of the contract scope
- Staff turnover in a key position
- Equipment problems affecting quality
- A scheduling conflict they haven't flagged
Understanding the root cause doesn't excuse underperformance, but it determines whether the solution is an operational fix or a more fundamental reassessment of the relationship.
Structuring the conversation
A productive performance conversation has four stages.
1. Share the data. Present the performance evidence clearly and factually. Give the vendor time to review it. Don't move on to the next stage until you're confident they understand the picture you're presenting.
2. Ask for their perspective. What's driving the performance trend? Is there something they've been experiencing that's affecting delivery? Listen to the answer with genuine openness, you may learn something that changes your assessment.
3. Agree on the problem. Before discussing solutions, ensure you agree on what the problem actually is. If there's a disagreement about the data or its interpretation, address that first. Moving to solutions while you disagree on the problem wastes everyone's time.
4. Define the improvement plan. What specifically needs to change? By when? How will progress be measured? Who is responsible for what? A vague agreement to "do better" is not an improvement plan, it's a deferred problem.
Documenting the outcome
Every formal performance conversation should be followed by a written record. This isn't about being adversarial, it's about ensuring that what was agreed is clearly understood by both parties, and that there's a record if the conversation needs to be referenced later.
The documentation should include:
- A summary of the performance concerns raised
- The vendor's response and explanation
- The agreed improvement actions, with owners and timelines
- How progress will be assessed
- What will happen if the improvement plan is not met
Send the summary to the vendor in writing after the meeting and ask them to confirm they agree with it. This step often surfaces misunderstandings that would otherwise only become apparent weeks later.
When the conversation doesn't lead to improvement
If performance doesn't improve within the timeframe agreed in the improvement plan, you have two choices: escalate the consequence (formal notice, contract review) or make a decision about the future of the relationship.
The documentation from the earlier conversation is now essential. It establishes that:
- The performance issue was raised formally
- The vendor had the opportunity to respond
- An improvement plan was agreed
- The plan was not met
That record is what protects you legally and reputationally if the relationship ends, and what gives the escalation conversation its credibility.
The goal is never to create reasons to terminate a vendor. The goal is to create the conditions for improvement, and to have a clear, defensible process if improvement doesn't happen. Regular vendor site audits give you the documented evidence to support these conversations objectively.
Evalystar gives facility managers the documented performance history needed to have these conversations from a position of evidence. See how it works.