Grow my business

Why bad employees can sink your company

As a small business owner, your success depends on the team that you build. Unfortunately, too many owners still allow bad employees to remain at the company because they are either afraid to let them go or see it as better than having no one in that job.

As dramatic as it sounds, a bad employee can sink your company. Here’s what every business owner needs to know about building a successful team.

A bad employee is a force multiplier

The problem is that every single person in the company knows the worst employees. Lack of action makes you look ineffective and brings down other people because you accept poor performance.

Employees who do their work inside the company aren’t a neutral asset; they can be a liability. The business may grow by letting go of these low-performing people.

Letting go employees will never be pleasant

Firing employees is an uncomfortable job for all small business owners. They must admit that hiring the person was their mistake. They may want to give this employee additional chances to succeed rather than firing them.

They fear that the next person may be worse than who they currently have. It can be difficult to fire someone, especially when you know their family. You may also fear legal or organizational repercussions that could be harmful to your business.

This situation leads to constant delays in taking action. But, for the sake of your business, you have to choose the right steps for your business.

Hints on when you need to fire a bad employee

No one wants to work with them. Everyone in the company knows who does a poor job. This forbearance is evident when no one wants to work with them on projects because they will have to do most of the work. Additionally, it puts more stress on the great performers.

When they become the example of how not to act

Strangely, bad employees work under a different set of guidelines than other employees. They may disregard company policies and ignore instructions. Other employees may point to them by name when they decide not to follow a certain company policy as proof that that type of behavior is acceptable.

Marketing expert, Seth Godin, characterizes these types of people as vampires. “[They] feed on negativity, on shooting down ideas and most of all, on extinguishing your desire to make things better,” he writes. “Don’t buy into the false expectation that in an organizational democracy, every voice matters. Every voice doesn’t matter—only the voices that move your idea forward…”

Profit is the reason you’re in business and remember that non-performing employees subtract from that equation.

How to let a bad employee go

Pick your timeline. When firing an employee, consider doing it on your schedule, not theirs. Assemble a description of everything that person does and the skills it takes to accomplish those tasks. Then, identify who within your organization can take over these tasks or hire a person to replace them, even if only on an interim basis.

Consult your human resources advisor. There may be legal actions the fired employee may take against the company. Most states have laws where an employer can fire the employee for any non-discriminatory reason. Nonetheless, you may want to consult experts first.

Do it quickly. Do it fast and with another manager present first thing in the morning. Don’t give a lot of detail on why they’re fired that could come back to haunt you later. If you have the financial resources, offer one week’s severance pay for every year worked. Walk them out of the office immediately.

What to do next. Turn off their computer access to company systems right away. Announce to the staff the same day that this person is gone without much explanation and remember to wish them well publicly.

Typically, deciding to fire employees now can ultimately be less costly for the entire company. While the cost of hiring or training another person may be an additional expense, there is better opportunity for this new person to contribute more to the overall profit of the company (and a lower net cost to keeping a bad employee). It may even make it easier to move on and grow the business with an improved team.

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Business Insights and Ideas does not constitute professional tax or financial advice. You should contact your own tax or financial professional to discuss your situation.