How to Make the Tough Decisions about Employees

In the current business environment, CEOs and business owners must do more with less and focus on the efficient use of resources, including employees, to have a sustainable and profitable company.  An ongoing personnel assessment is critical to success, but making necessary changes can be especially difficult in a business culture where employees are like a family. Having served as an advisor for CEOs and business owners for many years, I know how difficult it can be to separate the business needs from the personal issues. It is a very emotional time as you determine that a long-term, loyal employee no longer has the skills required to keep operations stable, much less to help grow the business. To make matters worse, not only is the employee under-skilled, but very often the obsolete employee is overpaid because they have been with the company for a long time. When you evaluate personnel effectiveness, consider if you can retrain, reassign, or if you need to replace the employee.

Retraining an employee

Determine if the employee is capable of elevating his or her skills or building a new skill set through training. If so, you will want to research what training is available. How much will it cost? How much time will it take? Does the company have the time and money to invest? Is the desired result possible? If retraining is of value to the company, you will want to find out if the employee is willing to regroup and take on this new challenge. If this option is cost effective and the employee is willing, you have a workable solution.

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Reassigning to another position

There may be an opportunity to use the employee’s skills in another open position within the company. You will want to take a serious, objective look at how or if they can contribute. If there is an open position and if the employee is willing to make the change, then you have created a “win-win” situation. 

Replacing the employee

Perhaps you’ve known all along that the only real option is to dismiss this employee. There are some items to consider as you prepare to dismiss the employee which may also help to lessen your guilt:

Severance Pay—This really depends on what seems fair, comfortable and what the company can afford. If you decide to do it then you should have a legal document for the employee to sign that protects the company in return for this payment.

Job Search Assistance—If an employee has been with the company for a long time, he or she may not know how to write a resume or how to organize a job search. Resources are available for this. You may want to consider paying to help them find new employment.

Making people decisions is seldom easy. Such decisions tug at your heart—you may feel badly for a while, but it is important to remember that the world has changed and things are seldom static in the business environment. You want to stay focused on the end goals: taking care of you, your family, and the other employees and their families who rely on a viable, sustainable, and profitable business.