Curing 'Staff Infections'

Question: I run a service-oriented business with 12 employees. One of my very first hires has lately turned into a royal pain in the neck. Her work started out good but has slipped big-time, her attitude is poor and she's infecting others with her negativity. How can I handle this smoothly?

Answer: Any business that has employees - whether just one or thousands - faces the possibility of poor performance. Even with careful up-front hiring practices, circumstances change and so do people's attitudes and performance on the job.

Big companies with entrenched human resources (HR) departments have systems to cope with these kinds of "staff infections." But small business owners have no such luxury when dealing with an employee whose performance has seriously slipped to the point of disrupting the business - especially when it's the first time this has happened to you.

A good way to insulate your business against problems is to establish clear, written procedures on how you will document employee performance - good or bad - right from the start. "Consistency is key," says Beth Gaudio, senior attorney with the National Federation of Independent Business in Washington, DC. "Employment discrimination suits often start when you treat workers in the same situation differently."

Here are seven steps you can take to deal with employee performance problems, or avoid them in the first place:

1. Act quickly. Avoiding action in hopes the situation will resolve itself can be a big mistake. Small business owners in particular must be proactive. Addressing poor performance might be uncomfortable for some business owners, but taking action early is often critical to restoring the vitality and team atmosphere that small companies depend on for success. Ignoring or mishandling the problem can lead to costly lawsuits, higher turnover and lowered morale.
   
   
2. Avoid surprise firings. Termination, if it comes to that, shouldn't be a surprise, but rather "the culmination of a progressive discipline that has given the employee the clear signal that he or she has not been performing to your expectations," says Gaudio.
   
   
3. Be clear about what you want. Even if performance or behavior standards and expectations seem obvious to you, make them clear to each employee - preferably from day one. This becomes your framework for disciplining an employee if necessary.
   
   
4. Be honest. Honesty is vital because business owners who are shy about criticism sometimes give workers higher marks than they deserve, thus fostering unrealistic expectations. Don't hide bad news. Be specific about setting goals and deadlines for improvement.
   
   
5. Look in the mirror. Don't forget that you are the boss, and it's your job to manage and motivate your people via effective entrepreneurial leadership. Before Joe Sansone started Pediatric Services of America (PSA) in 1989, he was an executive at a large healthcare company. "I had trouble firing people who weren't measuring up, even when I knew it was probably best for the company if they left," he says. As CEO of PSA, he learned from his earlier mishaps with problem employees and became a stronger leader and motivator. In the process, he built PSA into the nation's largest home pediatric care provider.
   
   
6. Evaluate employees regularly. Written documentation of specific performance problems is the best defense against lawsuits, says Gaudio, the NFIB attorney. It's also helpful to include employees in the process. You can use the evaluation as an opportunity to get goals and deadlines together.
   
   
7. Train employees properly. One of the best ways to improve employee performance - and contribute to your business success - is to thoroughly train workers from the start. If they clearly understand what your business is all about, how they are expected to perform and what your policies and procedures are, they are much more likely to succeed.