My column in this week's Tennessean examines one of the most painful issues faced by almost every entrepreneur at one time or another:
"I kept thinking I could 'fix' my plant manager," said an entrepreneur in one of my seminars. "By the time I finally admitted to myself that I needed to fire him, the damage was already done. I had angry customers who were furious about poor quality and late deliveries, and all kinds of employee turnover. It almost ruined my company."
Firing a key member of an entrepreneur's team can be a painful and even unnerving process. But, almost every entrepreneur faces a situation where a key employee needs to be terminated for the best interests of the business.
The thought of having to go through the process of terminating a key team member can be overwhelming, particularly in a growing company.
Everyone, especially the entrepreneur, is already stretched to the limit. Many times entrepreneurs will go into a state of denial about the problem employee. They postpone taking action simply because the prospect of terminating the employee, finding a replacement, and getting that new employee up to speed is more than they believe they can handle along with everything else they're doing.
The entrepreneur also may hesitate taking action because the employee performs tasks that the entrepreneur would rather not do or may not feel capable of doing. For example, an entrepreneur recently shared an experience she had firing a bookkeeper. She knew that a change was needed, but terminating the bookkeeper meant that she would have to assume those duties, which she dreaded.
There also may be a concern about the reaction of other employees when a key member of the team is let go. But, generally speaking, most employees know that a person should be fired long before the entrepreneur finally acts.
Entrepreneurs also worry about the reaction of key stakeholders who may interact with the terminated employee.
However, if an employee is not doing his or her job effectively, the people he or she interacts with day to day have already had first-hand experience with the employee's poor performance.
When an employee's performance is not meeting expectations it is important to follow a fair process.
Even in an at-will employment state like Tennessee, the employee should be given a chance to improve performance through consistent feedback and coaching. If performance continues to fall below expectations, verbal and written warnings should be given before an employee is fired.
The earlier the entrepreneur confronts the problem, the better the chance that a change in behavior and performance might be possible.
By the time most entrepreneurs admit that it is time to let a key employee go, it is often well past the time when action should have been taken. Postponing the inevitable will almost always just make the situation worse.
Jeff, this is so true. In a small company, just about everyone is a "key employee," so it's almost guaranteed to come up if the business lives long enough. I'm not sure this is a lesson that can be learned well without suffering through it at least once. In my case, the experience has made me not gunshy, but more cautious in hiring key folks. I'm very upfront with new hires now: if things aren't working out within three months, they're out, and it will be better for us both.