A Poor Performer Costs Money, But If You Like Them It Will Cost You $76,500* – Two Approaches To Cut That Cost

*Based on the average Canadian salary of $51,000

Intuitively we know that having a poor performer on your team will cost money in lower production, inter-personal conflict, extra supervision.

Shockingly, a poor performer who is enthusiastic and is personally likable stays employed on average 18-months longer than if they were not liked.

Imagine taking $76,500* and lighting it on fire just because you enjoy the enthusiastic warmth it gives off.

That is what you are doing by paying someone for 18-months just because you like them.

What do you do?

You can follow the Servant Leadership model or the Netflix model.

The Servant Leader Model

Recently Ken Blanchard of the Greenleaf Centre addressed the problems leaders face when employees “won’t do” what is expected of them.

Blanchard defines a “won’t do” problem as one when, despite being given the tools, the person doesn’t have the desire to change his or her behaviour and that there is a cost to your organization.

Read my thoughts on servant leadership

In the Servant Leader model, you give your poor performer every opportunity to improve, and when you know that they understand what you expect but still won’t do it, it may be time to “share them with the competition.”

The implications of the Servant Leader approach to the ‘won’t do’ employee means taking time to assess a person’s mindset and skill set correctly, develop performance management plans and manage the risk in letting someone go.

All of this cost money, time and the opportunity costs when you are focused on the poor performer when your time could be better spent with you higher potential employees.

The Netflix Model

When Netflix has someone who cannot or will not do their jobs as they expected, they choose to limit the cost quickly.

Like pulling a Band-Aid off.

In a recent podcast interview with Alex Blumberg and Patty McCord Netflix’s past Chief HR Officer she explained: Once they recognized there wasn’t a fit, they would knock on the door and say, “I think you’ve gotten kind of the vibe that I’m not particularly happy about the way things are going.”

If the employee disagrees or isn’t expecting the conversation, they say “Okay, so I haven’t been very clear about that. So here’s the team that I’m trying to build. And I need to have people that understand the technical people and understand what they’re. And unfortunately, you are not a fit.

Read about having tough conversations

The Netflix approach is to let you have three months of severance already in your pocket, instead of wasting that three months of time for you, the person and the rest of the team.

McCord recommends that instead of developing a 90-day performance improvement plan where once a week, she is going to sit down with the poor performer and prove that they are incompetent in writing. So not only is the employee and the supervisor miserable, because we both know it’s a farce. 

Conclusion

When dealing with poor performers, you need to do what is right for you and your organization.

And I understand that you may face HR policies or collective agreements that may trip you up.

Read about spending the right time in the right place

But do you want to waste your time, the employee’s life and all that money when you already know the right thing to do?