For most small business owners, handling an
underperforming employee can be extremely challenging.
After all, we don’t run our small businesses like
big, impersonal corporations. We know our employees personally; we work side by
side with them. Often, we strive to create a family feel within our workplace.
But if someone isn’t pulling their weight, that’s
money out of your pocket. They’re hampering productivity, jeopardizing accounts,
and endangering morale. If you have a slacker in your midst, who’s picking up
Ask yourself: can you afford to carry this extra
burden, especially now, when business is so tight? If you allow this to
continue, you are only hurting your business.
When it comes to dealing with mediocre employees,
you have two choices: get them up to speed, or get them off your payroll. Either
way, you start at the same point.
If you handle this wisely, you’ll give that
employee a chance to turn things around, while safeguarding your business. But
if you proceed rashly, you can set yourself up for a wrongful termination
lawsuit. Here’s how to do it right.
Getting Someone on Track
Managing employees is a process. It involves
ongoing communication and documentation. Unfortunately, many entrepreneurs learn
management skills on the fly, so often there’s no formal process in place.
No matter how small or informal a firm is,
employees need to know what’s expected of them. It’s good for them, and it’s
good for you. That’s why job descriptions and performance reviews are such great
management tools. Don’t use them? It’s time to start!
Meanwhile, if you’re dealing with a problem
employee, the first step is to communicate with him. Plan this meeting
carefully; be factual, specific, and cool-headed about it.
One thing you need to determine beforehand: is the
problem due to lack of effort, or lack of skill? Is this something training may
rectify? If so, draw up a training plan and make it part of your meeting.
Frame your expectations in quantifiable terms.
Rather than tell an employee he isn’t producing enough widgets, give him a
specific daily production goal. Now he’s got a goal to aim for and you have a
yardstick to measure against. Be sure to schedule a follow-up evaluation.
Making the Break
Hopefully, your employee will make great progress
during the probation period. If so, continue with ongoing reviews to keep
performance on track.
But what if your employee makes little or no
progress? Well, you can continue trying to work with him. However, usually it is
in your best interest to end things cleanly.
If you do terminate him, get that in writing too,
in the form of a signed severance agreement. Like a written warning, a formal
agreement may protect you from a future lawsuit. But how do you get an
employee—especially an angry or opportunistic one—to sign it?
Offer a severance package. In return for X weeks or
months salary, your employee agrees not to pursue legal action. Offer an amount
that seems fair, one you feel good about.
Once the employee signs the agreement, he has a
fixed number of days in which to recant. Withhold payment until after this
period and spread the payments out to discourage a change of heart. (Don’t know
what a severance agreement looks like? For a free sample agreement, call me at
800-818-0150 or email Ray@ProPres.com.)
Making the Leap
Yes, it’s still difficult letting someone go. But
here’s a thought that might spur you to take action.
Remember, when the economy is tight—like it is
now—it’s a great time to upgrade your staff. There are many talented people
hungry for work. Do you really want to turn them away because you’re stubbornly
holding onto a proven underperformer?
During tough times, smart entrepreneurs grab onto
every advantage that presents itself. A burgeoning talent pool is one of the few
upsides of a downturn, so seize it. The bottom line is, when times are hard, you
can’t afford to be soft.