Insight into successful firing and hiring practices.
If you're like most CEOs, you fire people too seldom and too late -- and as a result hurt your company, yourself, and even the employees you take too long to terminate. Here's help
Mark Landis still winces when he thinks about his worst firing experience. He had labored mightily to persuade a key executive from a giant company to join his small information-services company in Princeton, N.J. The fellow moved his family hundreds of miles, dived into Landis's Health Information Technologies Inc., and promptly fell on his face.
"Every senior person came to me and said, 'Please deal with this situation. It's hurting us all,' " recalls Landis. He couldn't. He was paralyzed by guilt. Finally, he gave the employee three months to improve. He didn't. So Landis let him have three more months to find another job. "The environment got so bad, people didn't want to come to work," says Landis, sighing, still pained after two years. The lesson, he says: "Make up your mind. Don't sit and agonize."
Lionhearted in the world's marketplace, small-business owners are all too often wimps in their own companies. They don't fire bad employees often enough or soon enough. The same small businesses that can be so adept at product quality control squirm when it comes to firing. For one thing, owners usually don't bring professional detachment to their relationships with employees. Nor have they laid down any clear job guidelines for them. And as their companies begin to grow, entrepreneurs feel enormous gratitude to longtime workers -- often placing them in jobs they're not equipped for.
All of which adds up to a festering mess when a person who should have been fired, isn't. Precious cash flow is squandered on someone who isn't producing. Productive coworkers feel cheated. No company can afford this drain on morale and finances.
Firing is one of the crucibles that turn entrepreneurs into managers, because it brings you face-to-face with failure. Nothing will make firing any easier. It shouldn't get easier. What it should become is less frequent. And that will happen if you make your company's firing process more instructive. If you think of firing as a symptom, a by-product of your company's activities, then you can take responsibility for those failed employees. When you do that, you'll understand why a company that hires the right people and manages them properly does almost no firing. That's your ultimate goal: to hire and manage so well you'll never have to fire again. Here's how.
* Hire right. Are you hiring the right people? Think about the people you've fired. What behavior ultimately made those people unsuccessful? Consider three broad categories: an employee's job aptitude; his work attitude; and his fit with colleagues. Be specific.
Now, with your list of terminal problems in hand, think about how you could have unearthed that problem behavior -- or a predictor of it -- in the hiring process. The range of possibilities is broad. (See "Hiring Without the Guesswork," No. 02920801, February 1992.) You can administer psychological tests, conduct three-hour interviews, or become a reference-checking zealot. The key is to select techniques that will give you information you're not currently getting from your hiring process.
Being exhaustive in hiring can also help you correct problems much faster if they occur. Donn Rappaport, chairman of American List Counsel Inc., a direct-mail-services company in Princeton, N.J., was perplexed when one of his star media buyers began having difficulty negotiating deals. He went to her hiring records. Her aptitude test showed she hated confrontation. "It was like a slap in the face to see this glaring warning," says Rappaport. After he counseled her on her mental framework and her negotiating skills, her performance improved.
* Make your expectations clear. Hiring right isn't everything. The other single biggest terminator of careers is failing to tell employees what you expect of them. The key is to give regular feedback to a new employee right from the start. Communicate your standards repeatedly and help employees understand what they need to change to succeed. Small companies can't usually afford the luxury of a discrete orientation program, but they can, and often do, rely on a two-week or three-week job rotation to teach new employees about the company and how it works.
Carolyn Thompson, president of CBT Training Systems, a Frankfort, Ill., specialist in employee retention, suggests also using continual job coaching. "Have people who are teaching the new employee fill out a performance checklist every week. Then the supervisor can say, 'You're really up to speed on this, a little behind on that.' The performance-appraisal process starts right away."
At many small companies fledgling workers are also assigned mentors, who provide a kind of cultural feedback that helps them assimilate. At Datatec Industries, a Fairfield, N.J., company that installs computer systems in stores, mentors are charged with coaching new hires on how to achieve quality. Quality mentoring doesn't provide new employees with job-specific benchmarks. Datatec takes care of that separately. But it does convey a kind of conceptual benchmark -- that quality permeates every job.
* Install early-alarm systems. Let's be honest, by the time most of you admit that something's amiss, it's late in the game. The nonperformer knows something's wrong; his or her coworkers do too. So do you, but you've ignored the problem. It's likely you're finally paying attention because the wayward worker has made a sickeningly bad mistake.
Forget patient helpfulness -- you greet this "personnel problem" with sheer fury. You want the reprobate out now. Hold on. If you did your hiring homework well, then you really believed you hired the right person for the job. What you should have done to strengthen your commitment to keeping that valuable person was to identify potential problems early.
John Richmond, head of field services for Modern Business Systems, based in Jefferson City, Mo., uses performance appraisals. They take place once or twice a year, when manager and employee sit down to discuss the employee's job progress. At Modern Business, managers don't use the appraisals as occasions for criticism. Rather, they ask employees to rate their success in all aspects of their jobs. Then the managers review the self-appraisals with the workers, seeking to understand fully how employees feel about their work.
