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JJ Ramberg

JJ Ramberg is the anchor of “Your Business,” MSNBC’s weekly show on small business. In addition to her extensive television reporting experience, Ramberg has a background as an entrepreneur and co-founded GoodSearch.com. She has an MBA from Stanford Business School.



‘Hire slowly, fire quickly’

Posted: Monday, April 20, 2009 4:04 PM by JJ Ramberg
Filed Under: , ,

One of my regular guests, Phil Town, author of the book "Rule #1," has offered us the following advice many times on the show:

"Hire slowly, fire quickly."

Training employees is expensive, so if you're going to go through the effort make sure you're doing it with the right person (hence, "hire slowly"). And paying for an employee who is not doing his job well is costly too, so get rid of them as soon as possible (hence, "fire quickly").

Phil is very clear that he does not believe in giving workers many chances (if any at all).

If you've been in this situation yourself, you know it's easier said than done.

In a small business, people often work so closely that they become like family. So when it's time to lay people off, the employer may have very intimate knowledge of how this will change that individual's life -- how they may have trouble paying their mortgage, or their child's school tuition expenses.

Or it could be even simpler than that -- the employer may just like the employee personally, or perhaps the employer is worried about how firing someone will change the dynamic of the workplace.

Because of the state of the economy, there are a lot of qualified people out there looking for jobs. Multiple guests have said on "Your Business" that this is the time to swap out people. If you have someone on your team who is not performing as well as you think he should, replace that person. People are available right now, and they're going cheap.

I recently had a long conversation with someone who was struggling with this issue. On the one hand, he knows that he could probably find someone better than the person he has to fill one particular position. On the other hand, he feels terrible about the idea of laying someone off in this economy.

He said that, as a business person, he knows that he should focus on his company, not his employee's personal situation, but that as a person with a heart, he cannot help but care about someone who has worked for him for the past year.

For the time being, he's decided not to replace that employee. He's going to give that individual a chance and hopes that with some more training and managing, she will do a better job.

I know that Phil Town would say that he's making a mistake. I'd love to hear what you think about this topic. Are you struggling with the same issue? Send me your thoughts.

 

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Comments

Small and Mid/Large businesses do have different considerations in many aspects, one of which is letting someone go. In a small business, with less stability and larger work burden, the type of people drawn to the business are those who appreciate the aspects of personal consideration and team loyalty. Firing on whim erodes the reputation of a company in this regard (especially when you can google even the smallest business and see previous employee's remarks). There are many more variables than Phil has taken into consideration. It might be instructive for him, or anyone giving advice as solid business practice, to  fire up a small service business in a competitive environment and observe the long term effects of such a binary decision making process.

Brian Owens, Portland, OR (Sent Wednesday, April 22, 2009 11:15 AM)

I don't think Phil is hiring the best employees. As an employee on the fast track in my career, I'm considered as one of the "Star Employees."  However, if I feel that an employer will just fire me because I'm not working at my same pace due to a temporary situation in my personal life (birth of a child normally causes some lack of productivity), I would look for another job ASAP and jump ship.

No good employee wants to be made feel disposable and will stick around. He's obviously a poor lazy manager and instead of motivating his employees and being a leader, he's  getting all his employees fearful and insecure about a hiccup to make sure they get their job done. Does he think that the best way to govern a workplace is make people scared? That's the same method all tyrants use before they become a miserable failure.  

Good luck for Phil, this isn't is the same working era as before. The best and the brightest won't work for someone that isn't loyal or they can't trust. Your employing people with human lives, not robots or bought slaves that you can abuse.

Mark, NJ (Sent Wednesday, April 22, 2009 11:23 AM)

I AGREE WITH GETTING RID OF "BAD EMPLOYEES" AS SOON AS POSSIBLE... BUT DON'T FIRE THE COOK UNTIL YOU HAVE A REPLACEMENT, OR YOU END UP "COOKING.

CARLOS CRUMP, ATHENS AL. (Sent Wednesday, April 22, 2009 11:59 AM)

Businesses need to take ownership in their employee’s welfare in that they have just as much responsibility to them as the employees to the company. Fire someone for the first mistake is foolish and costly, people learn far more from their mistakes then their successes, any fool can get it right the first time, it takes dedication and a desire to learn to correct a mistake.

John, Louisville, KY (Sent Wednesday, April 22, 2009 12:06 PM)

I firmly agree with the first part. My very first boss out of college always warned us during college recruiting season;" Better an empty chair than a cluck". Having lived through several rushed, poorly executed hirings, he had it right.
Firing quickly is a matter of degrees - In our litigious culture, you have to have your documentation nailed down, but once that's in order, holding onto someone that all your employees clearly KNOW is underperforming erodes their confidence in you as a leader.

SH, NJ (Sent Wednesday, April 22, 2009 12:19 PM)

I think a manager who follows Mr. Town's advice would be feared and despised by her/his employees.  There is a lot to be said for goodwill between managers and employees.  To say "times are bad - now is the time to nix underperformers" is kind of mendacious.  For an executive not inclined to give people chances, aside from the right-to-work states, Town's approach would invite labor unions.  It is better to look for trends when evaluating employee performance rather than anecdotes, unless there is a serious incident.

Not to say the underperformers shouldn't be let go, but this should be done regardless of the times, unless there is a serious labor shortage.

A better model than Town's would be this:  Try to get by on the minimum number of people, within a 40-hour work week.  Instead of being slow to hire, be very selective in hiring and do your homework.  Work on increasing productivity via computers and software and via training.  If you do the math, costs of training and computers are in fact tiny compared to labor costs.

Finally, Town should realize that one can't do a lot of the things that he would like to do in a democracy.  The 'little people' do have the right to vote.  The plant closing law enacted in the early 1990s is one example.

Kevin Blankinship, Oklahoma City, OK (Sent Wednesday, April 22, 2009 12:28 PM)

An unnumbered rule: "A bird in the hand is worth two in the bush." You never know what you're getting when you hire someone new. And unless the bird-in-the-hand is clawing and nipping (i.e. "Don't bite the hand that feeds you") sitting down and discussing why they are doing an inadequate job and what can be done is always worthwhile; it might be that they haven't been given the training or tools to do the job. If Phil Town insists on only Rule #1, he'll get a reputation as a ruthless employer and find that the bush is empty of good birds.

PLB, Buffalo, NY (Sent Wednesday, April 22, 2009 12:33 PM)

Let’s put Phil out of business by not purchasing his garbage information. Hey Phil why don't you get a real job and deal with real jerk managers that have no right being in a management position in the first place. Phil you need to go to Church!

Jim (Sent Thursday, April 23, 2009 10:27 AM)

The same goes for the reverse. If you are an employee, carefully check all aspects of the company and it's reputation thru all sources professional, private, word of mouth, etc. If you want to leave your job, find another one and then "fire" your employer(I.E. quit). Give them the same treatment and consideration that the give .

D R Butte, Montana (Sent Thursday, April 23, 2009 2:04 PM)

I work in a government/Judicial setting.  We have $$ troubles too.  My beef is that there are employees who are not pulling their weight, bending (almost breaking) rules and our management doesn't do anything.  I have no respect for that.  I too would feel bad about laying someone off, but there are many people out there who need a chance and are not getting it because of managers who are chicken to discipline or fire an employee.  Forget about layoffs....who really has a choice there?

patti (Sent Thursday, April 23, 2009 4:08 PM)



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