NextGen Know-How: How to Know When to Fire Someone

June 2018: Vol 41 No 6
Laurie Maddalena, MBA, CPCC, PHR
Managers should take these four steps before terminating.
Fired employee carrying a box of his belongings away from the office

I once worked for a credit union where employees dreaded calling the accounting department. There was an accounting specialist who was not friendly and often snapped at you if she felt you should know the answer to a question. She had been working there for over 20 years and had a reputation of not working well with people. But nothing was ever done about it. When she decided to retire, it was like the organization breathed a collective sigh of relief. The negative impact she had on the organization was gone, and it instantly elevated the working environment. 

Holding on to a negative employee has many consequences—it can be destructive to the team, frustrate other employees, and create a negative working environment. Sometimes the best course of action is to terminate. 

But deciding to terminate an employee can be a challenging and emotional decision. In my experience, most leaders avoid the decision and hang on to poor performers entirely too long, hoping the situation will get better. Instead, the situation usually escalates and causes more damage than if we had taken action earlier.

By not effectively dealing with performance issues, we create a cycle of mediocrity that ultimately damages healthy cultures. You simply cannot create an exceptional culture if you tolerate low performance and negative employees. 

Netflix is an example of a company that has created an engaged workplace built around excellence. In fact, one of their practices is, “adequate performance gets a generous severance package.” They believe a great workplace is “stunning colleagues.” Not mediocre, average or solid colleagues. Stunning colleagues. This is a bold leadership approach that most leaders and organizations are not willing to take a stand for. Yet to create exceptional cultures, you need exceptional people. 

It is a disservice to your top performers to keep underperforming employees, but leaders often rationalize keeping low performers. There are typically two reasons behind this rationalization: tenure or results.

Tenure—The employee has been with the organization a long time, which makes it hard to take action. The leader may have a personal relationship or friendship with this employee, contributing to the challenge. So, the organization works around the employee, thereby lowering the standards.

Results—The employee performs the technical aspects of the job extremely well. They deliver on the goals, but don’t get along with people. Perhaps they are negative or aggressive, but we overlook it since they achieve tangible results in other areas. 

To create a healthy, high-performing organization, you need to have standards in place that take into consideration not only superior results, but also superior interpersonal skills. It is not enough to deliver on goals; employees must also have the qualities and attributes that contribute to a healthy culture—the ability to get along with people, foster positive relationships and collaborate. 

So how do you know when it’s time to terminate an employee? 

As leaders, we have a responsibility to do all we can to bring out the best performance in each of our employees. The employee also has a responsibility to live up to the values and expectations established by the credit union. I believe most people want to do a good job, but once in a while, you will have someone who may exceed the technical job requirements but is a negative influence in the organization. Negativity, complaining and blaming can quickly become a virus that is hard to shake. Take swift action to move these people out of your organization, pronto.

For all other performance issues, there are things a manager should consider before terminating an employee. (I’m not talking about legal considerations in this article—you should always consult an employment attorney if you are concerned about termination.) As a leader, you should determine if you have done your best to help the employee succeed.

Here are four things a manager should do before terminating an employee:

1. Determine the root issue. Is the performance issue related to aptitude (knowledge and skills), attitude (confidence, focus, enthusiasm) or resources (equipment, time)? Understanding the underlying issue that is contributing to low performance can help you determine how best to work with the employee. You may decide that a training class is necessary, or a higher-level intervention like working with a leadership or executive coach.

2. Establish clear expectations. Does the employee understand what is expected? Beyond the technical aspects of the job, have you been clear about the qualities and attributes that are required to be successful (collaboration, positivity, ownership, etc.)?

3. Provide meaningful feedback. Have you met with the employee to give honest and clear feedback on what is not working? Have you provided guidelines about what needs to improve to meet expectations? It is our responsibility as leaders to give employees information about their performance.

4. Schedule regular coaching sessions. Beyond providing feedback, schedule time to coach the employee around the performance issues. While each situation is unique, this typically involves the manager working with the employee over a period of time to provide resources, suggestions and instructions. Sometimes asking the right questions can lead the employee to discover the necessary steps to better performance. 

Once you have taken the steps above, it is up to the employee to take the initiative to improve performance. If your efforts fail, it may be time to part ways. In my experience, most leaders don’t take action quickly enough. Exceptional cultures are made up of exceptional people. If you want to elevate the culture in your credit union, don’t delay action on performance issues. Your top performers will thank you.

Laurie Maddalena, MBA, CPCC, PHR, is a certified executive coach, leadership consultant and founder of Envision Excellence, LLC in the Washington, D.C., area. Her mission is to create exceptional cultures by teaching leaders how to be exceptional. Maddalena facilitates management and executive training programs and team-building sessions and speaks at leadership events. Prior to starting her business, she was an HR executive at a $450 million credit union. Contact her at 240.605.7940 or lmaddalena@envisionexcellence.net.

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