damnedif

This sounds crazy, but hear me out. I’ve seen many private businesses suffer because they have excessive dead weight, or worse, on the staff. These people may be your good friends. If you work together in smaller private company, it is inevitable that you will become friendly with and deeply care about your employees. You may even have people working for you who are related by blood or marriage. You feel trapped and that you cannot fire such people.

It’s extremely hard, I know. But you are running a business. Act like Bill Belichick and take the emotion out of personnel decisions. If David in outside sales wasn’t your buddy from college, would it make sense to keep him employed when your business shifted focused to inside sales? Ask yourself another way. If David quit tomorrow, would you replace him? If you say “no,” you know the right thing to do. Even if you would replace his position, would you replace him with a carbon copy, or are you pretty sure you would do a lot better. That makes it an even tougher call, but if David is incompetent, he’s hurting your bottom line every day.

I’m not trying to sound like the grim reaper of employment law, but you should assess all of your employees at least once a year. Don’t fire people just because you think you could do a little better (if you are sure you could do a lot better, that’s different). You may be wrong about that, and you will destroy morale. But each position should make economic sense to your bottom line. If you keep an employee who should be terminated just because they are your friend, both your company and your friendship will ultimately suffer. You will inevitably be bitter toward that employee, even if it is subconscious, and start treating them differently. Things could get ugly on both sides. “Good deeds” never go unpunished in my world.

Isn’t it better to be up front with people and explain the economic realities of their position and the company? Most employees take being fired personally, but you have some control over that. Along with a real explanation, give them fair notice and whatever they need to transition to their next position. Consider giving some severance. Consider transferring them to another position or modifying their current position. But don’t keep your son-in-law on as a V.P. if he’s not earning his keep. You would be better off just gifting the money and not making other employees bitter. Believe me, employees know who the favorites are; they also know who the deadweight is, and they will definitely be bitter about it. They will respect you – maybe even applaud you – for making the tough/right decision.

By Adam P. Whitney