How do I face team challenges as a new manager?

Hi Forum people!

I've been reading posts for hours (all v useful!) and would love some advice on my situation.

A couple of months ago I started managing the team I was part of, and it is proving to be very challenging. This is my first management role and I'm not sure if I'm getting it right.

One of my directs went for the position I have now and as a result the relationship is quite strained. His behaviour has been worsening - trying to get people into trouble, moaning about too much work, taking no responsibility and under-performing. On top of that, he has recently been demoted (before I took over) and is holding me responsible.

The team's best performer is deeply offended by this behaviour and I fear she is on the verge of walking out. (There were other problems here too, work-wise, but I think we have solved them.) I also have a new team member and I don't want this behaviour to affect her.

I have given feedback on several occasions (excellent advice in the podcasts!) but my direct simply does not recognise the problems. He provides excuses for most of the behaviour problems and denies the rest, blaming other people.

This has reached the stage where it's not only affecting my team: other departments have complained to me and have started saying they won't work with my team any more. My relationships with other managers are all very strong and, so far, I have managed to avoid any consequences for the team, but I think this is inevitable if I don't do something.

My plan is to put an improvement plan in place to make the situation official with human resources. Is this a good idea? Does anyone have any advice for me? I don't want to give up on him, but this is taking a huge amount of my attention away from the directs I should be coaching, and it's making for a bad place to work at the moment.

Any advice would be greatly appreciated!

Many thanks.