How to hire (or fire) an employee

The quality of employee performance begins with the quality of the hire.

We all know of companies that have hired an employee who looked great on paper, one the company felt it could not live without.

They were hired without a thorough and consistent process and within a short period, their shortcomings become apparent.

Stories like this make for great networking talk. We silently vow it will never happen to us.

There is no universal standard of employee quality; but there are some pretty well-accepted areas of focus.

The key to measuring your quality of hire is to define up-front what expectations are for this new employee.

You must look at:

• Knowledge, skills and abilities
• Attitudes and motivation
• Cultural fit, both with the organization and with your customers (we discussed those attributes in last month's column).

The more specific you can be about the position, the better the company can define its selection criteria and process, and have a quality outcome.

Effective hiring managers find the right talent by focusing on the following areas:

• As a manager, you need to know exactly what talents you want and need. Start by looking beyond the job description. Think about the culture of the company and how performance is rewarded.
• Think about how expectations will be set and how closely the person will be supervised (based upon your strengths and style).
• Look at your current "bench" of talent. Identify talents that are needed to complement others on the team.
• Try to identify one critical talent in each of the three talent categories:

1. Striving: explains the why (motivators) of a person (i.e. what their drivers are).

2. Thinking: explains the how of a person (i.e. how they think, weigh alternatives, make decisions).

3. Relating: explains the who of a person (i.e. whom they trust, whom they build relationships with, whom they confront).

Use the three talent categories as a foundation. Focus on them during the recruiting and interviewing of applicants.

Productivity?

The ultimate validation of the accuracy of a selection process is to measure how your new employee actually performs after they've been hired.

Although productivity can only be viewed after an interval of time has passed, it is worthwhile to review the fundamental measures of productivity. Those measures represent a method for evaluating performance and lead to evaluations of quality.

The hiring manager's pre-hire expectations may include a certain target for productivity. Measures for productivity are specific to the job function. Key productivity measures include units of output per employee at a level of quality consistent with standards.

Revenue generated has traditionally measured a sales position's productivity.

I think I might have a problem

Why do many managers hire quickly and fire slowly?

• They may have a possible false sense of urgency ("We have X openings and they need to be filled immediately").
• A possible false sense of crisis ("Mary just gave her notice and that department can't function without her").
• Unrealistic or inflexible recruiting/placement (i.e. "all openings will be filled within 45 days of vacancy").

Some hiring decisions are viewed as short-term decisions versus longer-term investments.

Once you know that the employee isn't going to work out, don't fire too slowly. There are varied reasons why companies are slow to terminate employment.

They can range from:

• Missing or inadequate documentation.
• Managers who are untrained or lack previous experience in dealing with disciplinary issues.
• The lack of a formal disciplinary process.
• Managers who feel their decision to terminate will result in the personal financial ruin, marital/family disruption or other serious and lasting consequences for the terminated individual.

Achieving balance

Here are some steps to take to help you hire more slowly.

1. Formalize the hiring process.

2. Update job descriptions and specifications regularly, particularly when a vacancy is imminent or has occurred.

3. Train team members on legal and effective interviewing.

4. Agree on interview questions in advance of interviews for the consistency and defensibility of your selection process.

5. Educate managers about the costs of poor hiring decisions (i.e. replacement and training costs, productivity losses, impacts on customers and internal staff). Estimates range from 0.5 to 2.5 times the incumbent's annual compensation.

6. Encourage managers to take a longer-range, "investment" view toward hiring, even within organizations that emphasize the employment is "at-will."

Here are some steps to take to help you fire more quickly.

1. Formalize an effective disciplinary action process.

2. Encourage managers to talk confidentially about prior experiences with terminations.

3. Train supervisors in the disciplinary action process.

4. Emphasize the appropriate documentation of all disciplinary discussions and warnings.

5. Purge employee files of outdated records.

6. Acknowledge the appropriate feelings of compassion for the individual balanced with the responsibility to hold them accountable for performing and behaving consistent with organizational expectations.

7. Acknowledge the negative effect that poor performance and work habits have on co-workers, the majority of whom are good performers and who comply with work rules.

Thoughtful planning

A good hiring program requires thoughtful planning. The time invested is more than justified. Hiring the right people is critical to an organization's achievement of its strategic plans; it also can avoid the emotional anguish and potential litigation costs of terminating someone who is a good person, but a poor fit.

Ultimately, a company is only as good as the people who work for it.

Selection and hiring of people into your organization is one of the most critical responsibilities you have and one of the key predictors of success.

Mila Stahl is vice president and principal of the Human Resources Group, a Madison human resources consulting and recruiting firm.