The general manager of Kier's 10-year contract with Shropshire Council confirmed the company was this week addressing its workers who had not been carrying out their role to the expected standard.
Peter Woodhead added that the highways 'gangs' were tackling the backlog of road maintenance work throughout the county and that productivity had evidently improved over the last six months.
He was speaking at Shropshire Council's Place Overview Committee meeting on Thursday, which contained a report admitting Kier's contract with Shropshire Council "has not lived up to expectations and is not viewed as a success".
Kier’s 10-year deal to provide services for Shropshire Council, including highway repairs and cleaning, street lighting and bridge maintenance, began in 2018 – although Longden representative Councillor Roger Evans said Kier "are not doing the work we wanted them to do".
Mr Woodhead said daily briefings and a clear strategy for improvement had been implemented.
"We've this week undertaken disciplinary action with members of staff," he said.
"We've improved the quality of our work and we're addressing individuals who are underperforming.
"The productivity of the gangs has improved considerably over the last six months, as has the quality of the work.
"We've had supervisors go out and spend a whole day with the gangs to see what's preventing them from doing a good job and that's why we've arrived at a strategy that's not a one-size-fits-all."
In the last financial year, highways teams dealt with 16,000 potholes, compared to 11,000 the year prior.
Andy Wilde, Shropshire Council's head of highways, said they were managing a "deteriorating highways asset".
"Twelve months ago the majority of defect repairs were temporary – at about 75 per cent," he said.
"In the last 12 months we've now been doing 75 per cent permanent repairs.
"We've identified where the shortcomings have been and the profile of resources hasn't been a good fit.
"The work we're undertaking with Kier is to start re-profiling those resources to give us better outcomes on the network.
"It's been a very challenging first two years of this contract, I think that's recognised, but I think there's some significant progress and that's something we're going to continue to work hard on and develop."
Councillor Evans said Shropshire Council should consider taking the highways contract back in-house.
Councillor Steve Davenport, Shropshire Council's portfolio holder for highways, said: "It's a large problem but I feel confident we're going the right way.
"Everybody is now channelling their efforts into going the right way and doing the right job.
"Clearly we've got catching up to do but I'm very comfortable it's going in the right direction."