The term "difficult employee" is typically used to refer to a worker who fails to conduct him- or herself in a responsible and/or professional manner in the workplace. Effectively dealing with such employees can be among the greatest challenges that face small business owners and managers. Few relish the prospect of disciplining or criticizing others in or outside the work environment. But when difficult employees become an issue, their failings must be addressed quickly and decisively lest they erode morale and efficiency. A natural management response is delay, temporizing, and wishful thought. When such traits are indulged, they just make things worse.


Problematic employee behavior is doubly difficult because it may have multiple causes not easily discerned. The causes may be work or home related, behavior- or health-related, may be triggered by other employees or outsiders, by changes of work, others' promotion, rising stress levels, etc. For these very reasons, the small business owner or leading manager will concern him- or herself initially, and always, with ensuring that internal causes are minimized. There will be fewer difficult employees in well-behaving work places than otherwise. As shown elsewhere in this volume (see Corporate Ethics) companies with high ethics experience much less unethical behavior. In well run operations, broad policy and structural approaches serve as preventive measures; careful and above all attentive management practices serve diagnostic purposes; and a clear, sequenced, escalating, well-documented "coping" process can rapidly bring closure.

Policy and Work Environment

A reasonably formal, reasonable orderly, well-organized, straight-forward, crisp but friendly work environment helps instill the right expectation in the workforce. Such an environment is almost always deliberate created and maintained by management by such means as setting working hours, initiating employees by having them read and sign brief but complete employment policies, and passing on the general "rules of the road." The more explicit, clear, and rational these are—and the more they are observed to be enforced—the more they contribute to the right work ambiance.

Maintenance of an efficient and visibly orderly work environment is only indirectly related to handling difficult employees, but once problems appear, this background is vital to the resolution of the problem. It is of central importance that the workplace have rules, that these be public, uniformly enforced, and equally applicable to all ranks. A somewhat disorderly work environment with poorly established routines, floating coffee breaks, many privileges, many exceptions to rules, temperamental bosses or tolerated high-jinks (perhaps because the cut-up is a very good salesman) and arbitrary rather than scheduled events make it much more difficult, later, suddenly to "wake up" to the need for discipline. Another way experts put this is that difficult employees are often a product of shoddily-run workplaces.

Management Style

Assuming that the policies are good and the work environment is reasonably disciplined, managerial performance in conformity with policy will be consistent, alert, but also flexibly sensitive. In effect this means that that managers in charge of individuals will pay attention to those they supervise, maintain a proper but not a frosty or belligerent distance, apply company policies rather than personal whim, assiduously avoid inappropriate relations (like flirtation or special friendships), and promptly and willingly provide both positive and negative feedback with an objective air. Good management style will always involve clear and prompt communications when changes threaten to disrupt—even when the changes are positive. Good management will represent the next level up in a straightforward way, neither deifying nor bad-mouthing it. Managers will be loyal to their employees and promptly go to bat for them. They will avoid turf-oriented behavior and support collective goals—and will promote such attitudes in word and deed.

Methods of Discipline

The emergence of a difficult employee will take place quite early in a well-management operation. Most of the time the "difficulty" will never even surface because it will have been dealt with effectively in it nascent stages. If it persist, the company will have in place a well-planned method of dealing with it in stages. The process will be orderly but escalating, beginning with information exchange and goal setting, followed by reviews, by increasing sanctions such as warnings, opportunities for appeal, notices, and finally discharge. In this entire process, management will behave rationally rather than emotionally. It will briefly but fully document the facts in writing because, in today's environment, that is simply sensible. Such methods will be followed even in operations that have at-will hiring policies—because the difficult employee may sue anyway. Top management will take an appropriate role in supervising such processes to ensure that policies are followed. Rarely if ever will a problem employee, managed in a rational, methodical, and orderly manner succeed in prevailing against the employer.

The pain, generally, of facing up to problems early is almost always negligible compared to the "uproar" that results from neglect and avoidance. Here the famous "Pay me now or pay me later" warning applies in full. The general rule—assuming, again, that good policies are in place and properly implemented—is to insist on rational and sensible behavior, full disclosure of problems on both sides, and clearly spelled out consequences which are actually applied.


Management experts cite several steps that entrepreneurs and managers should take when dealing with a difficult employee.

  • Importance of the Written Word. Companies should prepare and mainting written policies/guidelines. These should include definitions of poor performance and gross misconduct and detail performance and termination review procedures.
  • Taking Stock and Cutting Slack. In most business settings, workers spend long hours in close proximity. Inevitably, each employees will exhibit personality traits some of which may annoy coworkers, managers, or the owner of the business. But a mildly overbearing, cocky, or whiny demeanor on the part of an employee is not in itself cause for intervention. An owner who attempts to stamp out every personality manifestation that he/she finds to be mildly unpleasant will quickly alienate his/her workforce and hamper the company's ability to focus its energy on business issues. But when employee behavior begins to have a negative impact on coworkers or the health of the business itself, the business owner must intercede quickly.
  • Taking Control. If a problem employee emerges, the business owner or supervisor should schedule a meeting to discuss the behavior. This meeting time should be scheduled so that both the supervisor and the employee can focus on the issues at hand and speak without being disturbed. It is unwise to hold such a meeting when emotions are running high; but issues must be addressed in a timely manner. Performance problems, whether they take the form of insubordination, tardiness, poor work performance, or problematic behavior with other employees, may intensify or multiply if not addressed. Employees who do not meet standards—whether knowingly or unknowingly—will continue to do so if their unacceptable behavior is not challenged.
  • Hearing the Other Side. Small business owners often assume that workers possess the same skills and knowledge that they do. But some meetings with "difficult" employees reveal that their inadequate work performance is rooted in a lack of skills. In such cases, instruction and education, rather than disciplinary measures, are the keys to making the employee a valuable part of the workforce. In other instances, the employee may be grappling with personal issues that have had a deleterious impact on his/her performance. The owner can, at his or her discretion, implement measures that may enable to the employee to weather his/her difficulties and became a valuable member of the workforce.
  • Uniform Rules. Use the same criteria of performance and behavior evaluation with all employees.
  • The Facts. When confronting a difficult employee, business owners and supervisors are encouraged to focus on two or three specific instances when the worker exhibited problematic behavior. Whenever possible, use measurable and observable facts to explain the problem from your perspective. Establish the link between the employee's unacceptable behavior and/or performance and the overall health and direction of the company.
  • Avoiding Adversarial Confrontations. By his or her own natural role, the owner is employees ally and should try to convince the employee that the meeting is in essence an effort to solve a problem both parties share. If bad will is involved, that can be dealt with later.
  • Consequences and Review. Small business owners and managers need to make it clear to problem employees that consequences will follow continued inappropriate or substandard behavior. Choose these consequences with care, however. "Tell an employee who doesn't give a hoot about climbing the corporate ladder that he or she may lose out on a possible promotion, and you'll get no results," noted Entrepreneur's Robert McGarvey. "For a consequence to matter and actually make a difference, it needs to matter to that employee." One way in which owners and supervisors can serve notice to a difficult employee that they are serious about imposing discipline and correcting behavior is to schedule a follow-up meeting during the initial meeting. Scheduling a second meeting puts the employee on notice that his behavior and/or performance is regarded as a serious matter that will be monitored on a regular basis.
  • Acknowledging Improvements. Finally, business owners and managers need to recognize instances in which a problem employee makes a genuine effort to correct his/her workplace shortcomings. Without such acknowledgements, an employee is more likely to slide back into negative patterns of performance and/or interaction with coworkers.
  • Terminating Problem Employees. Some difficult employees will resist all management efforts to convince them to change their behavior or attitudes. In these cases, termination of employment may be necessary. This is not a step to be taken lightly, especially if the problem employee provides important services to the company (as in the case of the verbally abusive employee who nonetheless is a good computer programmer). But in some cases, it is necessary in order to maintain—or restore—company morale and efficiency in other areas. If behavior-related termination is warranted, small businesses should make sure that they document the employee's shortcomings in specific, quantifiable terms. Personnel files should include accounts of specific incidents of poor performance; summaries of meetings held with the employee and other company-initiated efforts to correct behavior; and any formal warnings of probation or dismissal.


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