The Peril of Growth At All Costs
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The Cost of Poor Performers

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It’s always tough to deal with poor performers. No one likes to manage laggards or to admit to a hiring mistake. When companies are growing at a fast rate (50% year over year or higher), managers will often focus more on recruiting new people than in managing the team they have.

So what happens?

Inevitably, as a company hires beyond its network (of known good people) there will be some number of bad hires. Maybe they bluffed their way through the interview process, or no one checked references.  Sixty or ninety days out, when someone asks the manager how new guy Fred is performing the answer is “the jury’s out.” 

This is nonsense.

If you can’t tell what impact a new employee has had in their first couple of months, it means there isn’t any and in all likelihood there won’t be much improvement down the line. Because if you hired someone who was good at their job (or ideally excellent) you would already be seeing the results immediately.

So now you have the pain of managing someone out. Put together a performance improvement plan, give them a second chance, if it makes sense and get them up or out.

Actually, it’s worse than that.

In any organization that’s growing quickly, once you get beyond about 30-50 people it’s likely there are some people who are not quite getting the job done. Everyone deserves the benefit of the doubt and feedback on how they can improve. This is especially important in an early stage company where much of the culture is implicit and not necessarily documented or understood by newcomers.

In most cases, poor performers are doing their best to just survive and put up a good front. If managers are busy, they may assume their new hires are getting things done and not even notice any problems.

But the new employee's colleagues, with whom they spend more time, are much more aware of who is getting the job done and who isn’t. They might be inclined to help a new employee come up to speed, but they have their own work to worry about. If left too long, the top performers will wonder why no one is taking action with the poor performers.

Few people like to grouse about a peer’s shortcomings. But they all see it. If you’re in an office, they will see it and hear it. In a distributed environment, it will be harder to notice, but sharp observers and hard workers will wonder why Fred is taking so long to do something that they could have handled in a few hours.

If you’ve worked with great people in a high-performance culture, your tolerance for mediocre performers, bureaucrats and talkers starts to fall. And once the number of poor performers gets to a certain level, the best people will leave. If management can’t  tell the difference between good and bad performers, why would they stay? And when you lose top performers, you lose the creativity and drive that is essential in building a great company.

You need to give clear feedback to employees when they are meeting objectives and when they are not. You can’t wait until the end of the quarter or worse, until the annual review process. Set clear expectations: here’s what you need to deliver in order to continue working here. Follow up in writing. Help them improve. But remember, as a manager, you are the coach. You have a stopwatch, you set the goal, but they must run the mile.

I have a very high expectation of employees. I want everyone to be excellent in their job, whether they are a product manager, a programmer, a sales person or an administrative assistant. So the two questions I ask are:

  • Are they excellent?
  • If not, can they become excellent?

If they can’t become excellent, I would rather cut them loose and invest in someone else with higher potential. In all the years I have helped managers with these decisions, no one has ever come back and said “I wish I’d given them more time.” Usually, it’s the opposite. They wish they’d moved faster so it was less of a drag on them and the team. The good news is, when you do make a change, everyone’s productivity goes up. And when you let someone go, treat them with respect and help them leave with their head held high. 

How do you evaluate the performance of people in your company? How often do you give feedback about what is expected and when? What happens when someone doesn’t get the job done? Do you give them a second chance? A third? A fourth? Do you wait until the end of the quarter to give feedback? Why?


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