In my work with small and mid-sized companies, I see three common mistakes related to terminating poor performers.
The first, and most common, is waiting too long. Most small business owners and managers are basically nice people. They sometimes tolerate poor performance much longer than they should, hoping the employee will turn things around on their own. I know one CEO who is so conflict avoidant that when he’s finally had enough, he asks his HR person to handle the terminations of his direct reports while he’s out of town. Typically, when this type owner or manager finally decides to terminate, the rest of the team asks, “what took you so long?”
The second mistake is not waiting long enough. I remember complaining to a manager at a restaurant once about a service issue. He went to check on it, came back to the table and told us our server had been fired and introduced us to another server who would be taking care of us for the rest of our dinner. I remember thinking, “I hope that server has made a lot of other mistakes, because the mistake he made with us was something that could easily have been handled through coaching or training and was certainly not termination-worthy.”
In my experience, there are many more “nice people” than “hot heads” in the world. “Hot heads” do exist, however. These owners and managers use termination as punishment for mistakes and as a way to signal to the rest of team team, his or her peers and sometimes customers, that errors will not be tolerated. No doubt the restaurant manager thought he was impressing me with his quick action. Unfortunately the “hot-head” often fires people who could have been rehabilitated with good management practices. These managers wrongly assume that the cost to replace an employee is lower than the cost to rehab one, even in low-skill, high-turnover industries. And they overestimate the emotional capital they gain (or think they gain) from the rest of the team, peers and clients for the termination. Often, after this type of owner or manager acts, the rest of the team asks, “what was he/she thinking?”
The third mistake is not having sufficient documentation. This puts the employer at risk for charges of discrimination or retaliation as well as higher unemployment insurance premiums. Remember, employers are basically guilty until proven innocent when facing the ESC, EEOC or any division of the Dept of Labor. And the only way to prove your innocence is with solid documentation.
The best way to avoid all three of these mistakes is through early intervention when poor performance is noted. Make a legitimate effort at rehabilitating a poor performer, but document each step so that you can demonstrate that you were fair and consistent in your treatment of that individual.
When you decide that the performance is not going to improve satisfactorily, fire quickly!