Photo by Neeta Singh
Solve headaches from unproductive employees.
If your profits are declining, you probably need to assess your costs, reshape your staff and cut your labor expenses.
This means you have to be accurate in your evaluations and astutely evaluate who stays, who gets coaching and determine who must go. Meantime, don’t make excuses for allowing poor performances.
Following your analysis, start by letting go of unproductive employees, but protect your business from discrimination lawsuits and wage-and-hour claims. Your process must be objective, well-documented and legally compliant.
Typical excuses made by timid managers:
1. “I need the person.” Usually, the person is viewed as being essential or has connections. However, you must be pragmatic: Weak performing employing employees who have a unique skill set or who aren’t carrying their weight in your organization. These factors mean their costs aren’t justifiable.
2. “It’s my fault.” Assuming you’ve made every attempt to coach the person, a weak employee isn’t your fault. Evaluate your steps for correction and the resulting performance.
3. “I feel sorry for the employee.” If the person’s poor performance stems from a personal problem, you must act. Instead of allowing a poor performance to continue, refer the person to the right resource to get help.
4. “I don’t want to punish the person.” Some managers feel guilty about having to take corrective action. It’s using bad practices to confuse punishment with discipline.
If you’ve taken every reasonable coaching step without success, you have a decision to make. You also have to be careful to avoid discrimination lawsuits, so think about several salient considerations.
Ask yourself questions that will yield “yes” or “no” answers:
1. Is the person over the age of 40?
2. Is the person disabled?
3. Has the person been injured in your workplace and/or filed a workers’ compensation claim?
4. Is the person a minority or woman?
5. Is the person able to claim discrimination based on religion, national origin, ethnicity, sexual preference or other related reasons?
6. Has the person been victimized by sexual harassment?
7. Has the worker been a whistle-blower?
If you answer yes to any question, go slow and be diligent about making your case for layoff, termination or other corrective action.
Preventing discrimination claims
Make certain such employees can’t legally claim they were singled out for age, race, gender, religion or disability.
Focus on objective data:
1. Establish clear job expectations with a job description and measurable performance metrics.
2. Maintain performance reviews, written warnings and attendance logs.
3. Use a performance improvement plan with a timeframe of 30, 60, or 90 days to improve.
4. Be consistent and treat similarly situated employees the same way.
Cost-reduction strategies
Before making permanent terminations, you can take cost-saving measures with less legal risk:
1. Furloughs or temporary layoffs allow you to suspends work and pay but keeps employees on the payroll, and likely maintains their benefits.
2. Offer financial incentives for senior staff to leave and signing a waiver of claims.
3. Cut hours or pay across the board. Be careful not to drop employees below minimum wage or exempt salary thresholds.
Preventing wage and hour claims
Do what you can to make certain employees can’t claim they were shortchanged on their final paycheck or suffered any retaliation.
1. Know your state laws and pay all earned wages promptly.
2. Pay any unused vacation time or any accrued paid time off.
3. Track any overtime accurately.
Best practices for a termination meeting
Take these precautions:
1. Keep the meeting short and professional without arguing or apologizing. Give your reasons for termination, for example: “We are terminating your employment due to a failure to meet the performance goals outlined in your personal improvement plan”.
2. Have a witness present.
3. You might consider a severance agreement. An effective way of preventing a lawsuit is to offer a severance pay in exchange for a signed separation agreement and release of claims. Make sure the agreement complies with local laws.
Conclusion
Discrimination and wage claims are hazardous. When reducing your labor costs, it’s vital to balance financial survival with legal compliance. So develop an objective, data-driven strategy to reshape your staff to cut costs while avoiding lawsuits.
Meantime, if you’ve done everything possible to coach an employee but the person fails to improve, no need to feel guilty. Remember you’ve done all you can.
From the Coach’s Corner, here are related topics:
Dreaded Discussions You Must Have – 7 Management Tips – In most organizations, managers must inevitably have conversations with employees regarding their work. Here are seven crucial steps.
Management – 8 Steps to Solve Employee Incivility – Obviously, mutual respect are vital in cooperation and teamwork for performance. Clear management strategies are necessary if you have uncivil staff members.
Management – 3 Common Mistakes in Performance Reviews – Not only do most workers stress over getting performance reviews, many bosses stress over having to give them. For management solutions, see these management tips.
Scaling Your Business Starts with Effective Management – Confidence starts with knowing the difference between scaling and expanding – and growing with the help of your culture and employees. Here are Biz Coach strategies in human resources to scale your business.
7 Management Tips – Communication with Difficult Employees – Multiple problems will include loss of profit that result from ineffectively dealing with difficult employees. Here are seven Biz Coach tips.
“No business in the world has ever made more money with poorer management.”
-Bill Terry
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