Should You Fire 10% of Your Employees Every Year?
Some entrepreneurs embrace the idea completely. They like the discipline it imposes. "It is one thing to say that you always want to be upgrading your staff--it is another to actually do it," one told me. "The 10 percent rule, and that is how we think of it, as a rule, forces us to constantly improve our staffing. Yes, of course, we work with underperformers. But the fact remains, we always get rid of the bottom 10 percent each year."
Other entrepreneurs said the approach was simply too draconian. They didn't want to be viewed as running that kind of organization. They said they were committed to improving the performance of employees and, only when they were convinced it wasn't possible, would they let someone go.
Said one entrepreneur who heads a very successful--and profitable--consulting firm: "My personal feeling about the organizations that make it a hard and fast rule to fire people? They aren't doing a particularly good job in how they hire."
The point of agreement here? You should always be trying to improve the quality of your employees. You don't have to a rigid rule, such as fire the bottom 10% every year, but you do want to be reviewing your entire workforce (at the very least) once a year, with an eye toward constantly improving it.
That could mean helping existing employees get better and giving more resources to best-performing workers.
But it could also mean bringing in more talented people.
Leaders of small companies are often remarkably slow when dealing with employee productivity problems.
That isn't good for the employee who is underperforming. And it is definitely not good for your organization.
You aren't being kind to either by letting the problem fester.
If you have one or more employees who are not pulling their weight--and odds are you do, something you have known for a while--you need to take action.