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How To Know When It’s Time To Fire Someone

Here’s how to figure out if your employees are worth giving a second chance.

How To Know When It’s Time To Fire Someone
[Image: Flickr user Consti Sch]

Firing someone is almost most always uncomfortable, but what if you aren’t sure if you should pull the plug or give them another chance.

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Here are some things I have found helpful in my career:

Where Are They On The Spectrum?

I’ve found employees fall into various categories. On one end of the spectrum, you have employees you would never want to lose. With your superstar employees, you want to keep them happy and give them what they want.

On the polar opposite end, you have employees who definitely have to go. With subpar employees, you need them out of the business immediately. Let them go in a nice and careful manner, but do it as quickly as possible.

Then, you’ll find many employees in the middle of the spectrum who are doing a pretty good job. But what about the people performing between very bad and very average? What do you do with those employees? I’ve erred in these situations enough times that I’m now more humble and careful in my ability to manage those decisions.

The first question I ask: Are they actually trying to get better? If the answer is no, then your work is done: you need to part ways with them.

It’s All About Attitude

The next thing I look at is their attitude. Is their attitude negatively affecting other people? To keep them, they have to have a reasonably good attitude, and they have to work hard–these are the non-negotiables. If they have a bad attitude that is affecting other people, they have to go, regardless of their work ethic. If they have a good attitude but they’re not working hard, then they also have to go.

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Not everyone has to be a huge advocate for the company. The main thing to look for on this second point is whether or not the employee’s attitude is negatively impacting the work environment. To stay, they need to be making a positive contribution, as well as having a good work ethic. If that’s the case, then you work with them to help them improve because that’s where all the games are won and lost.

An employee who talks negatively about coworkers and managers is an obvious example of how employees can impact their surroundings negatively. If they’re prone to gossip, that’s a definite sign that they need to go.

In my experience, structural personality traits like that cannot be changed. When I was younger, I used to think that I could influence that and you simply cannot. It’s too core to their personality. Also look out for lying. The willingness to tell direct lies is another core personality trait. Now, we need to remember that all employees are human, and are not perfect. They are going to make mistakes, and they’ll gossip from time to time. However, we’re talking about cases where an employee is already underperforming. In that case, the employee should be making up for it by having a terrific attitude.

At Sageworks , we’ve developed an expert system that helps people evaluate and understand a business’s performance by analyzing its financial data, and there is insight I learned from evaluating companies that’s also relevant in evaluating employees.

You would think that many companies are strong performers in certain financial metrics and weak in others–that they have great liquidity, bad profitability, good return on assets, and bad return on equity. However, the fact is that good companies typically have good profitability, good liquidity, good return on assets and good return on equity.

Similarly, good employees tend to have a good attitude, a solid work ethic, and perform well. We sometimes make these decisions more difficult than they really are. The truth is the data tend to work in a pattern. The people who don’t work hard are devoting their time on tasks like gossiping or complaining, while good employees tend to spend their time on getting work done. Even though we’re going over the finer parts of when to let someone go–deep down, the vast majority of times, you already know the answer.

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Therefore, to keep the great employees happy, remove the poor employees quickly, and evaluate low-performing employees by taking a hard look at their attitude and whether they’re trying. If low-performing employees are trying hard and show a positive attitude, work with them to help them improve. If it’s clear that they’re not trying and their attitude is negatively impacting other people, then talk to them about their future at the company. Many times, both the employee and the employer are happier once they’ve moved on from one another.

Brian Hamilton is the chairman and cofounder of Sageworks. He is the original architect of Sageworks’ artificial intelligence platform FIND.

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