When to Fire the First Person You Hired

Your original employees don't always evolve with your business. How to know what to do about it

Written by Advisory Board

Welcome to Advisory Board, a weekly department in which a panel of experts—made up of entrepreneurs and professionals—answer questions you have about how to run your business better.

This week, a reader asks:

“I started my company with three employees. A decade later, the business is doing extremely well and growing quickly. Two of my original staff are thriving, but the other doesn’t seem to have the skill set to keep up with our new reality. Just thinking about firing this day one-employee after all he’s done for the company makes me feel ungrateful. What should I do?”

Here’s what the experts have to say.

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“One question to ask yourself is whether or not your evaluation of the employee is obvious to the rest of your team and even to the individual himself or herself. My experience is that poor performance is generally quite visible within an organization—but not always. If you have been positively rewarding the poor performance over the decade, the poor performer will be shocked and hurt but by the same token the other team members may be resentful if they have to continue to carry the person. After all, salary paid to an under-performer is not available for distribution and increases for them. Try to get a sense of how visible the poor performance is. If coaching has not worked then you can cut the person loose. Otherwise, perhaps after 10 years the person deserves a chance to improve with some help.”
Charlie Reid, Charlie Reid & Associates, Kingston, Ont.

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“This is kind of a typical problem and ratio. Have a frank discussion with the employee and clearly identify the skills gap. Then see if it can be remedied with training. Make it a two-way street where you offer to pay for the training and the employee puts in the extra time at home to raise their skills (depending on what it is). If they still have the fire in their belly they should welcome this as a career enhancer. If they don’t, it is probably best for both of you to part ways.”
Randall Litchfield, CEO,Inbox Marketer Corp., Guelph, Ont.

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“Clearly outline what you expect from them, while taking the time to coach, mentor and support them with whatever they need to succeed. But it’s also important to outline what will happen if they don’t live up to expectations. Then the decision is in their court: step up or step out.”
—Mandy Farmer, President and CEO, Accent Inns and Hotel Zed, Victoria

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Originally appeared on PROFITguide.com