Have a question about a small business topic? Let our resident expert Chris Griffiths take a run at it. E-mail your questions to smallbusiness@globeandmail.com. Confidentiality ensured.
I often make my clients paranoid and self-conscious. They'll ask: "Was last week's column about me?" Many of the topics are common to a lot of small businesses across different fields and industries.
But most small-business owners feel like they're all alone in their trials and tribulations – as if their challenges are unique. The fact is, most corporate self-reflection – and my commentary – can be applied to businesses of just about any size.
Today's topic is no different: Most of the clients I deal with have trouble terminating staffers who are not working out. Effective hiring is not easy, but it's a heck of a lot easier than firing. And few entrepreneurs recognize the value of getting good at dismissals.
"Getting good at dismissals." It sounds a little sadistic, but keeping the wrong person in a position in a company is not good for the other staff, the business or the employee.
While entrepreneurs do their best to locate the ideal new hire for a particular position, the traditional and non-traditional methods don't always work out. Résumé reviews, reference checks, multiple interviews with quirky questions and a solid work history don't always tell the full story. Similarly, potential candidates can't get a complete handle on the companies they are joining after a few questions, a glance at a policy and procedures manual and a 10-minute tour.
From both the employee and employer perspective, sometimes owners just need to do their homework as best they can and jump in.
My experience, which is dependent on the type of position being filled, is that it can take up to three months for both the new hire and the business owner to get a handle on the performance levels and "fit" of two parties. That is why I often recommend a 90- to 120-day probation period. This signals to the employee that a gig is not a done deal until the staffer has had time to dig in and really get up to speed. It also allows the employee time to get the inevitable learning curves and relationship building – both inside the business and with outside parties – out of the way.
This all sounds good in theory, but it only works if the small-business owner gives plenty of constructive feedback to the employee along the way. Each owner is different with unique styles and preferences on how things should get done. It is common, although completely unfair, that an employee is let go without the chance to adapt or improve along the way, which can only happen with the input of an owner or supervisor.
The probationary period is not just a wait-and-see, trial-and-error exercise. A business needs the entrepreneur to put a lot into that time to make the most out of the hiring opportunity. Dismissal should be a last resort.
In spite of best intentions and best efforts, it is extremely common for new hires not to work out. When an employee is caught stealing or doing malicious damage to the business, firing that individual is an obvious necessity. When the "fit" or the performance is marginal, however, that's when things get difficult. Firing is tough on all parties. It is emotional. It is awkward. Because of these truths, owners often procrastinate, and that makes things worse.
The business needs the small-business owner to make these firing decisions thoughtfully, respectfully and – just as important – quickly. Letting an unsuitable employee continue to operate can do nasty things to a company and its profits.
First, it brings down the other employees. They see an owner taking no action and they can easily start to question why they are bothering to work hard and make smart decisions while others coast along in ignorance.
Second, the business is giving up productivity. If the position an owner filled calls for a better candidate, then it will suffer every minute the weakness is ignored.
Third, when an owner fails to address the need to excuse an employee, I'm willing to bet the worker in question is getting the "vibe" from the entrepreneur and from peers. While these people may suck it up because they need the income, they are likely feeling uncomfortable and insecure. That will make matters worse.
Businesses need their owners to recognize these situations and act swiftly to take corrective action. Letting it drag on serves no one's interests. It only delays the inevitable and causes companies to miss out on the benefits that will be enjoyed when a more appropriate candidate is found.
Owners need to get good at what is a very, very difficult part of their jobs – firing. Do it with wisdom and respect. Conduct an exit interview to learn some of the issues from the employee perspective that may allow improvements to operations and increase the chances of finding better candidates.
Doing nothing – for a week, a month, or a year – is only taking profits out of the owner's pocket and making the work environment uncomfortable for everyone.
Chris Griffiths is the Toronto-based director of fine tune consulting, a boutique management consulting practice. Over the past 20 years, he has started or acquired and exited seven businesses.
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