People problems rarely “work themselves out”

Managing Performance in the Family Business

In our Human Resources consulting practice, one of our favorite euphemisms for performance management issues is when a client tells us that they need our help because an employee “isn’t working out.” Our first response is usually, “well, tell them to go to the gym!” Kidding aside, we understand what the client means, but use this to get the client to think and speak in more specific terms. Simply put, it’s a serious matter to contemplate terminating someone’s employment, and we want to be sure that the client has thought clearly about their rationale for doing so. This is where effective performance management can help.

When clients tell us someone is “not working out,” that can mean one or more of the following:

• The employee is failing to meet production, sales, or other specific goals, or isn’t fulfilling the duties enumerated in their job description.
• The employee has violated company policies such as appearance standards, time and attendance requirements, safety policies, etc.
• The employee does not behave in a way that is appropriate for their role. They may not demonstrate appropriate customer service, teamwork, leadership, or some other trait effectively or appropriately that is necessary to do the job.

We often find that family-owned businesses struggle with addressing performance issues. In many cases, they do not act at all, or they might swing the other way and react disproportionately to the final “straw that broke the camel’s back.” This approach can come back to haunt them if the former employee takes action against the business.

Here are the reasons we’ve uncovered for why owners don’t act sooner:

• Conflict avoidant—people don’t like to be confrontational, especially face-to-face.
• Fearful of legal action—many of our clients are smaller companies and fear that they will inadvertently do the wrong thing that will get them into costly trouble.
• Inability to articulate exactly what the performance problem is—sometimes the client just can’t state clearly what the problem is, especially when it is behavioral based.
• Don’t have a roadmap for the process—i.e., starting and finishing a path of corrective action to improve behavior. Clients may not know what to expect or have the tools to do this properly.
• Feel like they don’t have time to manage performance—they’re too busy, but the problems persist until something is done about it.

When we find a business owner struggling through this, we show them the process to manage performance effectively so that they can make better decisions about improving performance. Here are some of the techniques we use:

• If they have not yet done so, we facilitate a discussion of what is expected of the role, both in terms of job duties and expected behaviors. This often helps the client zero-in on the specific performance issues.
• Scanning their employee handbook and policies and procedures. Often overlooked, the descriptions of what is acceptable and what is not may be found here. This helps develop a plan to manage performance and hold people accountable.
• Uncovering exactly what the performance issues are. Are they related to failing to meet key performance indicators, sales or production goals? Are they violating company policies? Do they behave in ways that are not appropriate for their role?

Once the client has defined the issue, we then assist with preparing corrective action tools that can be used in coaching, corrective action, or if necessary, termination, to ensure that the process is firm, fair, and consistent.

Managing poor performance is a challenge. It’s often not pleasant…but if you can save a poor performer by learning to address clearly and thoughtfully performance issues when they arise, you’ll strengthen your business. While it may ultimately require the most drastic action such as termination of employment, in most cases effective performance management leads to performance improvement, which saves time and money on recruitment, training, and maintaining employee morale and productivity.

Mark Fiala is a member of the Galliard FBA Institute with over 15 years of strategic human resources leadership. His company, Organizational Architecture, is based in Cleveland, Ohio.