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Hiring, Firing and Net Value February 24, 2014

Posted by Tim Rodgers in Management & leadership, Organizational dynamics.
Tags: , , , , , ,

In one of my recent positions my manager suggested that I “get rid of” an person in my team who wasn’t meeting expectations, at least in the opinion of my manager. I assumed he meant that I should fire them. I didn’t think that was a good idea, for several reasons. I felt that this person was being asked to do something that was a little outside their job description, and something that was also outside their natural comfort zone of skills and talents. Instead of continuing to force a square peg into a round hole, I re-assigned some responsibilities within the team so that this person could focus on what they did best.

Sure, I could have fired this person, but I prefer to look at these situations from a net value perspective. This person was making a positive contribution to the business. If I fired them, that contribution would be lost, at least until I replaced them with a new hire or transfer. Hiring requires recruiting and interviewing candidates, and then the new person typically goes through a learning curve. It could be months before the business realized a net gain to offset the switching costs, and even then the hiring process does not guarantee a better outcome.

The other consideration was how much of my time every day was spent managing this person, or compensating for their sub-standard performance. It’s certainly possible that what looks like a positive contribution to the business by one person is actually a net drain because of their impact on management and others, including the lost opportunity to spend your time in more productive ways.

In this case I was able to find a lower-cost way to increase this person’s long-term net value without incurring the switching costs. I’m not sure my manager agreed with my logic. I understand that sometimes you do have to “get rid of” someone who is under-performing, but that should be a carefully considered decision, not an emotional reaction to a situation that may not really that bad.

I see the same issues on the hiring side. Let’s assume that all job openings were justified to fill an urgent need for the business (although that’s apparently not always true). As long as that position remains unfilled, the business is suffering to some degree, otherwise why would the position be created in the first place? Of course the hiring manager should be trying to find the best person to fill the position, but the time it takes to find and on-board that person has to be balanced against the cost of not having any person in that position. Can the business afford to keep looking for a better candidate?

Of course this isn’t necessary a bad thing. As time goes by without hiring someone, the business will compensate and adjust for the missing resource, and it’s possible that may ultimately be a net gain. Or, not.




1. Happy Holden - February 24, 2014

Excellent Tim,
I wonder what has happened to “Management Science”, when it seems easier to fire someone than to work with them to improve performance. In my experience, people want to do a good job, BUT ‘FEEDBACK & COACHING’ is sometimes called for.
The training I had 40 years ago at a William Onken Couse on “Managing Management Time” provided the best insite to working with subordinates. Is this training missing in todays managers?
Isn’t redeeming or retraining a much more productive effort than recruiting a totally new person (provided this person is or was an asset to the company)!

2. Tim Rodgers - February 24, 2014

Thanks for the reply. I don’t know when this started exactly, but it seems that many companies have decided that it’s no longer necessary to invest in human capital, either from the HR function, or from individual managers. There are exceptions, I’m sure, but it’s as if people have become interchangeable parts.

3. Kim Conrad - March 3, 2014

I really like the way that you handled the situation. It seems another positive outcome would be that the employee would work even harder for you, since they know you have their back. I have often wondered why a manager would put someone in a situation where they would be more likely to fail rather than in a position where they can succeed and maybe get some additional training to expand their expertise at the same time.

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