Making Tough Decisions: Reward Good Employees by Removing Bad Ones

I’m sure you’ve seen advice regarding employee bonus and incentive systems, including some that are quite complex. The idea is that, to achieve a high-performance workplace, you need to motivate employees and achieve maximum efficiency.

None of this is wrong, but I often suggest another strategy that surprises a lot of people: get rid of the bad employees. It may be harsh, but it’s also true: the best thing you can do for your good workers and your company is to separate under-performing and marginal workers.

Statistically, there are always employees who seem disengaged or apathetic and some who are even working against the organization. Then there are those who are impaired by drugs or drink. Some may have problems that may, in some circumstances, be a danger to themselves or other employees. They should be separated from the company.

Another group is even more difficult: those who are not bad enough to terminate, but aren’t good enough to be retained. These are the marginal producers.

Marginal employees produce errors, inaccuracies and affect the morale of the work group. These employees demand a larger percentage of managerial attention. Sometimes, they benefit from a wake-up call from their supervisor, but often they just lower the standards for the rest of the work group. Identifying and dealing with these employees may be among the most difficult challenges that managers face.

In many companies, the problem is simply ignored. But a marginal employee’s co-workers know who the trailing workers are and expect something appropriate to be done. When something is not done, they tend to turn on the manager for his or her dereliction.

How do you get rid of a marginal producer? The traditional way is to watch them fail, document the failure, tell them what they are doing that is failing and give them time to fix it. If they still fail, document it again, tell them what they need to fix and give them more time to fix it. If they continue to fail, then you can terminate. Still, be ready for a fight with your State Human Rights Commission or the EEOC. Legal battles are widespread here.

There is a better way. Let the marginal employee know that they are failing and on a path that will lead to termination. Tell them that just because they cannot make it with your organization does not mean that they cannot make it elsewhere. A termination will stain their record and will have to be explained for years to come, but a voluntary resignation can be explained. Assure them that if they resign, you will give them a neutral reference but that a termination gets the straight treatment.

If they are terminated, that is what gets stated on any reference check. Explain that this may be their best shot at clearing their opportunities for the future.

Terminations are never easy, but negotiating win-win solutions like this are usually best for everyone. It’s certainly better than watching your organization go downhill.

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