14 Jan 2013
By Tannette Johnson-Elie
Many entrepreneurs take pride in starting new business ventures that create jobs and nurture and develop people. But good companies are only as good as the men and women who work for them.
No matter how well-intentioned a small business entrepreneur may be in wanting to create new jobs, there comes a time when letting go of employees is necessary for the good of the company and the morale of the staff.
It’s probably one of the most agonizing decisions a business owner or boss has to make, but it’s also one of the most important tasks – firing employees who don’t work out. Severing those bonds is especially tough for small business owners and entrepreneurs who often work closely with their employees to build their family-owned ventures from the ground up.
“Nobody likes to do it,” says Sandy Montori, an administrator for Active Electric Inc., a family-run electrical contracting business in Fox Lake, Illinois. “I don’t like having the conversation. Some people get really upset. We always try to make the environment comfortable so there’s no tension and anxiety.”
Even so, the question becomes how does a leader balance the need to fire people and provide a nurturing environment without being cutthroat? This issue was raised in a recent New York Times blog post by Chicago entrepreneur Jay Goltz, entitled, “Do Good Bosses Have To Be Cutthroat?” In the piece, Goltz asserts that sometimes in the pursuit of excellence, good bosses have to fire people and that doing so doesn’t make you a bad person. However, he contends “not firing people makes you irresponsible and your customers and other employees pay the price.”
Cynthia Cobb, a Chicago-area human resources consultant, agrees with Goltz’s notion that sometimes good leaders have to fire people to maintain a positive work environment and move their companies forward.
“It’s not about being liked,” says Cobb, president and principal of 3C-Cynthia Cobb Consulting LLC, who has more than 15 years of human resources experience. “When you’ve got dead wood in an organization it’s a drain on everybody. It affects morale when other employees have to pick up the slack for the non-performing person.”
Not addressing an employee’s poor performance can erode a leader’s credibility, Cobb says.
“It’s like pruning a tree. You have to prune the dead branches. Firing someone may be something you have to do to keep that nurturing environment.”
How you fire someone matters, says Cobb. It becomes cutthroat when the firing is based more on subjective circumstances than an individual’s failure to perform.
“If you’re going to come in and say, ‘Joe, I’m sick of you and there’s swearing involved, then it’s cutthroat,” she said. “Don’t do the Donald Trump – ‘You’re fired’ and you haven’t taken the steps to set the person up for success.”
Since people are unpredictable, having to fire someone can make for a stressful, emotional and even frightening situation. Nevertheless, there are ways to approach the process so that it’s less unsettling for the poor-performing employee and for you as a business owner and your remaining staff.
The first step is to follow proper hiring procedures such as conducting thorough background checks and drug testing and ensuring new hires receive an employee handbook that lays out company policies, says Montori, of Active Electric.
“We try to do everything we can to eliminate issues before we have them,” said Montori, the company’s administrator who also is a licensed electrician. “We try to observe how people work. We give raises, incentives and bonuses and we talk weekly shop. You want to make sure nobody thinks someone is liked over the other.”
At Active Electric, if an employee isn’t performing to expectations, the company will issue that person a verbal warning first, followed by a written warning and then termination if necessary.
“You try to sit down with the person and say we’re having this conversation due to this problem. What can I do to help you so this doesn’t keep continuing,” Montori said. “The next time you have to have the conversation, you can say, I talked to you before and we did everything we could to help you.”
A few additional tips from Cobb, the human resources consultant:
Have security onsite if you are concerned the employee has the potential for violence and protect your intellectual property by eliminating access to important data. Finally, never let them see you sweat.
“Don’t fly off the handle,” said Cobb. “Make sure you’re respectful and calm in your demeanor.”