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When to Fire Someone

22 Feb 2016 by

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One of the hardest things you will have to do as an employer is terminate an employee. Even when it’s a problem-person, breaking the news is difficult and uncomfortable. However, there are times when firing is a necessary step to improvement; one poor employee can affect an entire company negatively.

But at what point is letting someone go the right move? What reasons are significant enough to fire an employee? Here are some problems to consider that if serious enough, could merit termination.

Hurting company culture

Howard Stevenson, a professor at the Harvard Business School, said, “Maintaining an effective culture is so important that it, in fact, trumps even strategy.” Regardless of talent and functional performance, when an employee’s values and personality don’t fit with those of the company, it is better to find a more fitting candidate. Stevenson and Eric C. Sinoway wrote a book called, Howard’s Gift: Uncommon Wisdom to Inspire Your Life’s Work, in which they explain their classification system to identify which employees help company culture and which hurt it:

  • Stars are the employees we all love — the ones who “do the right thing” (i.e. perform well) the “right way” (i.e. in a manner that supports and builds the desired organizational culture).
  • High potentials are those whose behavior we value — who do things the right way but whose skills need further maturation or enhancement. With training, time, and support, these people are your future stars.
  • Zombies fail on both counts. Their behavior doesn’t align with the cultural aspirations of the organization and their performance is mediocre. They are the proverbial dead wood. But their ability to inflict harm is mitigated by their lack of credibility. They don’t add much, but the cultural damage they do is limited (and, naturally, these are the employees most of us try to “flush out” of our organizations).
  • Vampires are the real threat. These employees perform well but in a manner that is at cross-purposes with desired organizational culture. Because their functional performance is strong, they acquire power and influence. Over time, they also acquire followers: the zombies who are who share their different set of values and aspire to better performance. Soon, there’s a small army of vampires and zombies attacking the stars, high potentials and leaders who are doing the right thing.

 

If you have a cultural vampire on your hands, the solution is to terminate him, regardless of how well he performs.

A bad attitude and no enthusiasm

An employee with a bad attitude and no enthusiasm is a dangerous one to keep around. Negativity spreads very quickly. An employee that gossips about coworkers and management, complains about the workload, or simply has an apathetic attitude will inevitably have a negative impact on his surroundings. Soon, instead of having one grumbling employee, you will have a whole team with low morale. Stop the contagion early and address the problem, firing the employee if necessary.

Underperformance

Everyone makes some mistakes and goes through ups and downs in their work. However, if you have an employee showing repeated underperformance, it’s time to evaluate the value of this employee to your company. Often times employees like this cause a decline in productivity beyond just their own position. If they are pushing responsibilities onto coworkers, asking for help excessively, requiring a lot of your attention, or producing low-quality work that needs multiple revisions, they are costing your company money and causing stress.

However, before letting someone go for performance-based reasons, give him enough time to change. Be honest with him and give constructive criticism so he knows what he needs to do better. Hear his side and get his input on the situation. Some states require that you make a performance improvement plan before letting someone go. However, even if your state doesn’t require it, a plan like this shows you care about your employees and their jobs. Include goals and objectives for the employee to reach within a clear timeline. Let him know that if the plan is not successful, he might not have a future with this company. A truly committed employee will take the plan seriously and make change. If he does not really try to improve, it’s time to let him go.

One idea to think about is Jack Welch’s famous ‘rank & yank’ system, where he had managers group their employees into three categories: the top 20%, the middle 70%, and the bottom 10%. He said:

“The middle 70 should be given coaching, training, and thoughtful goal-setting, with an eye toward giving them an opportunity to move into the top. Keeping them motivated is the most difficult part of the manager’s task. You do not want to lose the vast majority of your middle 70 — you want to improve them…As for the bottom 10 percent, there is no sugarcoating this. They have to go.”

This might seem a little intense, but it was never a secret that this was his way of managing. With these high expectations, his employees worked hard and were constantly striving to be better. This system also prevented managers from procrastinating firing low-quality employees. Underperformers simply could not stick around.

Rebellion

While this may sound obvious, a rebellious employee has no place on a healthy team. Simply don’t allow an employee to stay that is attempting to undermine management, refusing to follow company policy, doing things without permission, or anything of the sort. When an employee simply won’t conform to the way a company is run, he needs to leave.

Occasionally an employee may question a decision, seeking to understand better. It’s a good thing when people are thinkers and don’t just follow everything blindly. However, when someone is frequently arguing with coworkers, a supervisor, or manager, he is creating a hostile work environment. Your company rules of conduct need to be upheld to maintain a healthy company culture and atmosphere. Decrease the stress in the office and let that employee go.

Upsetting customers

If you don’t have customers, you don’t have a business. If one of your employees is regularly upsetting customers, they are costing you money and cannot stay. Employees need to be able to have a good attitude and satisfy customers. This is a priority that if not understood, is should be a deal breaker when deciding who to keep on your team.

Warren Buffett always hated firing employees, yet he said,

“Lose money for my firm and I will be understanding. Lose a shred of reputation for the firm and I will be ruthless.”

If someone is mistreating customers or has taken part in something dishonest that will harm the company’s relationships with its clients, then terminate the relationship.

 

While firing is a difficult thing to do, it is often in the best interest of everyone involved to part ways before the situation just gets worse. Many times there’s a feeling on both sides that the job is not the right fit, and moving on to a new position can be a relief for the employee. Do the hard thing and choose what is best for your company in the long run.

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