Situation: A company hired an employee one year ago. The employee is competent but slow. Even after a year on the job, other employees with similar skills and experience are able to complete the same job three times faster. What is the best way to handle this? How do you set expectations for an employee?
Advice from the CEOs:
The most important principle governing situations like this is clarity of communications. You must clearly express your expectations, and you must assure that the employee clearly understands your expectations.
Assure that expectations are clearly expressed. This means what you expect in terms of performance, and firm timelines for achieving minimum requirements. You also must assure that the employee understands the consequences for failing to meet minimum requirements. The best assurance is written confirmation that the employee understands what is expected.
Don’t be vague or nice about your expectations, performance requirements or the consequences for failing to meet minimum requirements. This risks sending the wrong message to the employee.
Put the employee on a performance improvement plan to meet minimum job requirements. Monitor and document for 30-60 days and then handle according to how the employee responds.
If the individual can’t meet the objective, but has potential value to the company, offer the person an appropriate position at the level that the new position pays.
Have a second person in the room when you deliver the message. If you determine that you have to terminate the employee and the employee elects to sue, this will help your case in a judicial action.
Situation: A company’s leadership is wrestling with how to handle an accusation of employee theft. In the case presented, the accuser lacks credibility, but the charge is serious. The leadership team wants to deal fairly and equitably with the case, but doesn’t want to send the message that pilferage is acceptable. How do you handle allegations of employee theft?
Advice from the CEOs:
To assure fairness and equity, determine a way to substantiate, with objective or third party information, whether charges of pilferage are valid.
Express your seriousness about the situation, and ask the accuser what evidence they can provide to substantiate the allegations.
In a warehouse or stock room situation, install inexpensive video equipment to record and verify pilferage.
To assure that messages to employees are clear, revise employee manuals to specify serious repercussions for pilferage as well as measures being taken to prevent it. This will demonstrate awareness of the issue as well as the company’s determination to discourage pilferage.
If you can verify the allegation, either through objective or third party evidence, face the employees involved. The choices are simple:
Either the behavior stops and the estimated damages repaid to the company by the employee, or
The employee is fired.
Do not think that this is something that will go away on its own. If there has been pilferage and the situation proceeds unchecked, it will damage you both financially and in terms of employee respect and morale. Employees will be watching your response closely.
To protect yourself, once you determine a course of action be sure to document everything.
Situation: A founder of a company also heads business development. This person had no prior experience in business development, and no other skills to offer the business. Over the last two years he has generated only a fraction of his salary in new or additional business. The CEO has concluded that it is time to hire a business development professional; however, the Board is reluctant to act. What are the steps that you would take to let a founder go?
Advice from the CEOs:
Because the individual in question is an owner, the situation is delicate. Staff relationships are involved as well as morale. Therefore, it is essential that you create a convincing case for replacing the individual and show that this is the best for the business. Don’t rush the process. However, once you’ve built a solid case for what needs to be done, act expeditiously.
Start by evaluating and documenting what the individual is doing to develop new business.
Count customer connects per day. Set a baseline expectation and measure against this.
Look at the pipeline. Historically what does your new business funnel look like – contacts, presentations, evaluations, closes. How does this individual’s pipeline stack up?
What are his business advancement and close ratios? How do these compare with industry standards?
For the individual: Demonstrate that his performance is penalizing his own return as an owner. Create a spreadsheet that shows:
The current situation, and his return as a shareholder from current results, versus
Hiring two effective business development people, and how this could change his return.
Show the individual a graceful way out – one that works for him.
For the Board: if the current direction is negative, create a model that shows your current direction and the break even implications. Present this analysis to the Board to show that the company needs a change.