How to Deal With Problem Employees: Fire Them!

Last Updated May 11, 2011 1:32 PM EDT

How to Deal With Problem Employees Fire ThemIf you find firing people easy, then something's definitely wrong with you. That said, it's an important part of managing that doesn't get nearly enough attention for the simple reason that nobody likes to deal with it.

Well, deal with it. If you don't, you'll pay for it later; I guarantee that.

Yes, I know this is likely to be an unpopular position to take during a time of high unemployment. But 90 percent of you are working and, for you, life goes on.

Not dealing with problem employees can be expensive and damaging to your organization in more ways than one:

  • Opportunity cost: instead of that underperforming employee, you could have a star.
  • Project schedules, cost overruns, customer satisfaction.
  • Contagious effect on organizational morale and performance.
  • When the problem employee is a manager, there can be a pronounced ripple effect on the entire organization.
In my experience, the technology industry does a far better job of dealing with the whole issue of firing people than traditional companies. The reason is generational: tech companies aren't saddled with old school thinking on seniority, jobs for life, and all that.

In fact, a company I used to love to compete with in the market while marveling at its often brilliant management culture - Intel - used to unofficially call it "weed and feed": periodically feeding or taking care of the top x percent of the organization while weeding or terminating the bottom y percent.

Conventional wisdom says that aggressive termination policies are bad for employees, but I'd argue the opposite. People who aren't performing at an acceptable level will likely be more effective and happier doing something else. Many people I've fired thanked me later, saying they needed the kick in the pants to move on. No kidding.

That said, as a manager, it took a lot for me to fire somebody. Sure, I did it, but in hindsight, not as aggressively as I should have. Why? Well, nobody who worked for me would have considered me a softy, but the truth is that it's the path of least resistance. In other words, I wasn't as good a manager as I could have been ... as you should be. These days, here's my guidance on ...

When You Should Fire People

  1. Unacceptable performance. Once you've taken all the right steps to provide an employee with the direction, tools, and training he needs to be successful, provided a warning or two, and performance continues to be unacceptable with respect to the job requirements and metrics, it's time to cut him loose. The same goes for terminating managers and executives, all the way up to CEO.
  2. Periodic weeding of consistently underperforming employees according to established company policy. A culture of actively and periodically working to improve underperforming employees and, failing that, terminating them, is a good thing. It's even better to have an established process to ensure objective and consistent execution, although I don't favor a mandatory percentage of employees.
  3. Termination "for cause" offenses such as disclosure of material confidential information, moonlighting with a competitor, insubordination, discrimination, committing a felony, etc. Goes without saying.
  4. Layoffs. Everyone has an opinion about layoffs, but they're a fact of business and corporate life. You can manage your business in a reasonably conservative manner but a serious recession or market downturn could still necessitate layoffs. I think the most effective way to downsize in a downturn is to cut once, cut deep (within reason), and let the healing begin.
Bottom line. What separates good managers from great ones is how effectively they do the tough stuff, the stuff nobody likes doing. That includes giving employees and managers honest and direct feedback and a kick in the pants when needed. It also means there are times to cut people loose. Once you come to that decision, sooner is better than later ... for everyone involved.

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