Are Your Employees Killing Your Business?

stability

While the world seems to be watching Honey Boo Boo to see what outrageousness comes next, I love tuning into Restaurant Stakeout and Bar Rescue and even the latest non-food, see-how-your-employees-are-destroying-your-business show that does the same makeover with tattoo parlors. I love it because bad employees and horrid managers are caught in the act of destroying the owner’s business and usually fired on global television.

The premise is simple; some clueless restaurant owner can’t figure out why business is so bad and they’re teetering on the edge of bankruptcy, so they contact the show producer and one of the show hosts, a man with many years of experience, usually owning their own successful restaurant or bar (or tattoo parlor) plants cameras and microphones all over the establishment for a week and occasionally sends in fake customers to test the staff and make personal observations.

While the business owner watches the video and listens to the audio from a remote location, we witness things everyone hates about dining out; rude waitstaff, horrid food, dirty tables, etc. While the hapless owner sits in horror at how his/her business is being run in his/her absence, the host of the show screams at them about allowing such behavior and keeping such bad employees.

Once the owner is steadily retching up on the floor of the remote location, the host takes him/her into the establishment, rounds up the staff and informs them all that they have been on camera for a week and faces go pale white. They know they’ve been caught and there’s no lie convincing enough to dispel the poof of witnessing it all first hand via modern technology… although Candid Camera did it over fifty years ago.

The palm-to-forehead moment is when a terrible employee keeps their job. In one show, a bartender is stealing $200-$1,000 a night from the bar. The owner, who is about to lose his business, car, house and life savings is told by the expert host to fire the man as an example to other employees that stealing and waste will not be tolerated. The owner, instead, tells the bartender that he is getting a second chance. The other employees’ mouths drop open, almost to the floor.

The host convinces the bar owner that he has to fire this worker and the owner finally does so (after the show is over, subtitles tell of how business has increased in these eateries/bars but in this one show, it notes that the owner hired back the fired bartender).

Amazing Truths

This really isn’t so odd for any business – large or small. While working for a small design firm, owned by a husband/wife team, key employees were roadblocks to success. The business ran on top-level design ability in the market and had a great name within the industry. A steady stream of regular customers kept everything afloat and everyone well paid. With all of the incoming traffic, the sales manager didn’t have to work very hard. Come in late… just before the bosses, read the paper and chat on the phone with her boyfriend or her sister, wait for the bosses to leave and then skidaddle for the day.

When the owners would take four-day weekends, the sales manager would disappear into one of their offices and sack out on the couch for a little nap for most of Friday and arrive by noon the following Tuesday, just before the owners would traipse in, rested and relaxed, ready to yell at certain employees for not working hard enough… but never the sales manager. Then business started dropping off.

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As it became harder to meet salaries and pay bills, the owners got nastier and the screaming got louder, usually echoed by the sales manager with fingers pointed at all other employees. Some employees left. The rest of us went to one of the owners to tell tales of afternoon naps, newspaper reading and nothing being done to actually bring in new clients. We were dismissed as liars because no employee could act in such a disgraceful way. We took photos of the sales manager sleeping on the couch. We mounted a clock behind her desk and took photos of her reading the paper, noting the clock time in the shot. The owner was indifferent. Had smaller video cameras or cell phones been around at the time, it would have made for better evidence, if only the owner would want to see it.

To make a long story short, the owner was finally forced to let the sales manager go when things were too late to be saved and the studio closed, happily ever after.

The same thing goes on at large corporations, too. The larger the company, the easier it is to hide incompetence within a larger number of employees. At one former employer, a large, global corporation, there were tales of the late owner, who had built the company from humble beginnings of products held in shoeboxes. With careful and involved leadership, the company grew and grew but stories of him walking hallways, visiting departments, sitting in every meeting he could told of an owner who was involved in every aspect of his life’s blood. When he passed away, his son took over and due to the size of the company, managers and human resources were trusted to stand watch over a growing number of employees. As you can guess or have witnessed for yourself, human nature also took over. Favoritism, jealousy, backstabbing and other judgments not based in business decisions for success will promote stagnation and downfall no matter what the size of a company.

In an article appearing on CarerBuilder.com, the following advice is given on the cost of a bad employee:

Many managers are uncomfortable addressing the issue of a “bad employee.” It is a fact of managing people that not every employee will be excellent at every job. The first challenge is separating your employees into the following groups: star players, good employees, and bad employees. If your company is larger than 10 people, there is a really good chance that you have at least one bad employee.

While debating whether to continue investing in an employee or to let him go, the writer of this article had a very enlightening conversation with a co-worker. The co-worker asked, “What would happen to your team’s efficiency and effectiveness if you replaced your bad employee with someone as good as your star player?” The answer will be different for every manager who reads this article, but for me it had three parts: 1) it freed up my time to become a better manager 2) it showed the rest of my team that good performance was recognized 3) the bad employee’s replacement increased our team’s throughput by three times.

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When cancer enters the body, it spreads grows and spreads throughout if gone untreated. A bad employee can be like cancer within a company. Strong negativism, a poor attitude, backbiting, and incompetence can spread quickly within any organization. Co-workers of a bad employee notice the issues and typically try to fight off resist catching the negative traits. However, such traits are contagious and can severely hurt or even kill a company. A bad employee will eventually affect your employees, customers, and product/service’s quality.

If you have ignored a bad employee, and the “cancer” has spread in your company, you can correct the problem. First, you need to get rid of your bad employee. After the dismissal, you must address your remaining staff. Not being candid about the firing can cause a fast wave gossip to spread throughout your company. Identify a few key reasons for the dismissal, that should have been obvious to their co-workers, and hold a meeting. Briefly share your thoughts and give your employees a chance ask questions. Be sure to give honest answers. NOTE: It is very important that you do not bash the bad employee in this meeting. Be respectful of him/her as a person and let your remaining staff, who may have an after-hours relationship with him/her, know that you hope he/she quickly finds a great job where he/she can excel.

MSN has a more frightening outlook on the cost of a bad employee, and rightfully so when you see their figures:

They may not have experienced the type of public-relations nightmares that Netflix experienced from its ill-conceived decision to launch Qwikster, or that Yahoo saw after firing CEO Carol Bartz over the phone, but two-thirds of American companies say they’ve made business mistakes this year that they wish they could take back. Many of those mistakes, according to a new survey, came in the form of bad hires, the results of which ended up costing them more than just bruised egos.

According to a new CareerBuilder survey on the cost of a bad hire, 69 percent of employers reported that bad hires lowered their company’s productivity, affected worker morale and even resulted in legal issues.

Forty-one percent of companies estimate that a bad hire costs more than $25,000, and 25 percent said it costs more than $50,000.

While some mistakes are beyond the hiring manager’s control, there are ways to avoid hiring the wrong person. “The more thoroughly the candidates are vetted, the less likely they will be a poor match,” says Rosemary Haefner, vice president of human resources at CareerBuilder.

Haefner advises employers to allow job candidates the opportunity to meet as many employees in the department as possible, especially if they will work closely together. Also, candidates should provide ample evidence to show they have the skills and work experience required for the position.

Hiring mistakes happen – but why?

When asked to give a reason for the bad hires, 34 percent of employers said sometimes things just don’t work out. However, a rushed decision topped the list of reasons companies gave for making a bad hire.

  • Thirty-eight percent of employers said they needed to fill the job quickly.
  • Twenty-one percent say not knowing enough about job candidates contributed to bad hiring decisions.
  • Eleven percent didn’t perform reference checks.
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The price of a bad hire adds up in a variety of direct and indirect ways. For example, 9 percent of companies said bad hires resulted in legal issues and 11 percent said they resulted in fewer sales. The most common effects of a bad hire are:

  • Lost worker productivity: 41 percent
  • Lost time to recruit and train another worker: 40 percent
  • Costs associated with recruiting and training another worker: 37 percent
  • Damage to employee morale: 36 percent
  • Damage to client relationships: 22 percent
  • How bad is bad? Characteristics of a bad hire

When it comes to what makes someone a bad hire, employers reported several behavioral and productivity-related problems:

  • Failure to produce the proper quality of work: 63 percent
  • Failure to work well with other employees: 63 percent
  • Negative attitudes: 62 percent
  • Immediate attendance problems: 56 percent
  • Subject of customer complaints: 49 percent
  • Failure to meet deadlines: 48 percent

The Bard’s Lesson

But if you can’t count on the checks and balances of managers, performance reports and human resource investigations, then what can you do?

In Shakespeare’s Henry the Fifth, on the eve of battle, Henry, sensing there is trouble among his belleagered troops, dresses as one of his men and walks among them to find out what they think of him and his plans. In Mark Twain’s A Conneticut Yankee in King Arthur’s Court, King Arthur dresses as a peasant and suffers indignities he didn’t know existed among his people.

While Twain may have borrowed the lesson from Shakespeare, former New Jersey Governor, Richard Codey, dressed as a homeless man to discover what was wrong with homeless shelters in the state. Many newscasters as well as writers and filmmakers have taken to experiencing problems of people and places by becoming an insider. Often the problem is discovered but never, unfortunately, acted upon quickly enough. People will tell you the “Henry Investigation” is too difficult for modern corporate CEOs to pull off.

There is one other TV show I enjoy; Undercover Boss. Another Arthurian adventure being one of the workers except the premise puts the emphasis on not what the employees may be doing to hurt the company but how the company’s policies hurt engaged and dedicated workers. It does show that it’s still possible for a business owner, albeit with a little makeup, false moustache and being dressed down, can see first hand where problems may lay in their company. In a worst case scenario, there are investigative firms that specialize in planting people among employees in a company to gather information on why there may be low employee engagement and spot problems.

The only stopping block after that is to ignore their findings, but that would be bad business. Sometimes, no matter how many bad employees may be causing problems, it always falls on those in upper management to stop killing their own business.

Images ©GL Stock Images

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