Managing underperformance in projects is important because one poor performer can burden a team. Underperformance is defined as not meeting expectations and is often caused by a lack of skills, unclear goals, or personal issues. It can lead to delays, increased costs, and decreased productivity. Managers should identify underperformers by monitoring progress, reviewing metrics, and getting feedback. They should then address underperformance by providing support and training, clarifying expectations, and implementing consequences if needed.