If you asked company owners “What are the keys to your success?” you’re going to hear quite a few of the same answers: their company’s vision, their well-developed and executed plans, their consistency, their perseverance, etc. What’s odd, though, is how infrequently you’ll hear the phrase “our employees.”
I haven’t encountered many businesses that gross a million dollars with only the founder as the workforce. Entrepreneurs starting out quickly realize the importance of at least one key player to have in his or her backcourt. No matter the industry, businesses do not thrive without hard-working and dedicated employees. Yet, hard-working and dedicated employees are just a piece of the puzzle. The employee must also possess valuable knowledge, rich experience, strong work ethic, a loyal commitment to the company’s vision, and also be a cultural fit. When you find that person, you’ve got one slice to an award winning pie.
However, it’s extremely challenging for companies to find that kind of talent. I know; I’m a recruiter and realize the struggle to find the “perfect fit” for companies. While it’s very important to recruit the right employees, it is just as important to know when to get rid of the wrong employees. For startups and small businesses, knowing when to get rid of the wrong employees can rapidly increase production and revenue.
When is it Time to Fire an Employee?
There are similar types of employees at every company: the gossiper, the slacker, the negative Nelly, the guy who talks way too loud, the overly talkative talker, the person who openly shares anything and everything about his or her life, and the unidentified food thief.
How do you determine and take action when ones behavior begins to outweigh the value they bring? Many companies keep poor performing employees around for far too long. On the other end of the spectrum, though, are the companies that remove employees much too quickly.
Removing employees too quickly usually means the company makes hasty hiring decisions, provides poor training, and doesn’t have a well-established corrective action program.
I recently consulted with a company that only had seven employees in their office and a tremendous turnover rate. The employee with the most seniority had been there four years, but the employee with the next amount of seniority had only been there for five months. That was a very clear indicator of a code red staffing problem that didn’t take long to identify.
The owner made hasty hiring decisions with very little time-investment in employees. There was a brief on-boarding process and a few hours of over-the-shoulder observation. When a new hire showed any sign of struggle, they were immediately terminated.
While I applaud the owner for quick action, it was too quick. There was no real training. No coaching. No warning. This company just chose to hire and fire as fast as possible. To fix that problem requires a major shift to hiring philosophy. The biggest obstacle to overcome is that part of the company’s philosophy is that the extremely high turnover is just a result to the industry, removing any responsibility on their hands. While external circumstances may tie our hands together, there are always ways to improve processes.
Create Standards and Protocol
The “quick hire/quick fire” problem may still be an easier fix than a “slow hire/slow fire” problem. Of course, certain infractions, such as theft, dishonesty, and harassment, require immediate dismissal. However, how do we handle the employees that are slowly and progressively less engaged and low performing?
The decision to remove poor performing employees at the right time can be better determined by asking these six questions:
- Is this person a cultural fit?
- Has this employee received any coaching?
- Does the employee show a desire to improve?
- Is this employee bringing down office morale?
- Is this employee harming production?
- Has this employee received a warning?
If you own a startup, your first employees must be good cultural fits. If you hire a person who is not a good cultural fit, dismiss that person immediately. Your startup is far too valuable to accelerate with the wrong employees in place; your company may head in the wrong direction before you know it’s happening.
Try to Fix the Problem First
We learned from the smaller company I consulted with that some employees may not be aware of what they’re doing wrong or how to fix it. If an employee has an issue early on, then it should be addressed quickly and effectively.
You already invested time and money in this employee; it’s in your best interest to share some of your expertise in an attempt to increase your investment. Coach the employee with whatever time you can spare – if even if it’s just for one minute. Since your time is so limited, coaching sessions need not exceed 10 minutes and should only state the problem and an action step towards a solution. I suggest one to two coaching sessions.
If an employee shows absolutely no desire to improve after the first coaching session – terminate immediately. There’s no need to give them a warning shot.
When someone shows resistance to improvement, then that’s not the type of employee to keep around. It doesn’t matter how skilled that person is, if they’re not willing to improve then having them will stunt your company’s growth. This is the employee that tends to coast by the longest without repercussions. The reason? The employee may be very like-able and a great cultural fit. Once great rapport has been established with a manager or owner, the employee can leverage that relationship without improving work performance. Consequently, it becomes much more difficult to dismiss a very likeable employee.
If an employee were bringing down office morale, I would give one brief warning and not much more. That negativity must be nipped in the bud immediately. I see this issue most often as the Achilles’ Heel to effective employee management.
The negative employee is often very skilled, and the negativity may be frustration towards the “less talented” employees. Either that, or the pride that makes them think they would make better decisions than management. I can say with absolute certainty that it doesn’t matter how talented that employee is, you are significantly better off without him or her. Negativity spreads like wildfire. You’ll notice a difference in your office within the first day, not to mention that you’ll likely earn respect from other employees who have wished for that employee’s departure.
Most simply put, as soon as employees are bringing down office morale and harming production – it’s time for them to go. It’s foolish to dismiss a new hire without providing at least some direction. Yet, it’s even more foolish to spend too much time and energy trying to turn the marginal employee into a superstar. You owe it to yourself to at least put a sliver of effort into helping them, but you’re also not a babysitter. If an employee has been told what should change and you do not see improvements from that employee with a week or two, it’s time for that person to go. You’ll learn much faster how to hire better employees for your business and not to mention yourself from many headaches.