My employee is bad at his job but keeps saying he's doing great
Briefly

A new administrative employee displays strong customer service skills but has weak attention to detail leading to frequent mistakes and missed deadlines. Despite positive claims about his performance, he fails to meet expectations. The manager struggles to provide effective feedback and feels manipulated by the employee's comments, indicating a disconnect between the employee's perception of his work and reality. The manager considers initiating a serious conversation about the need for substantial improvement, recognizing the limited time for growth but frustration over the lack of progress.
You are going to be so happy when I show you what I've done for you! His responses indicate a disconnect between his perception and reality, leading to frustration.
You do need to have the 'this needs to improve or else' conversation. The lack of improvement and missed deadlines are critical points needing direct conversation.
Read at Fast Company
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