Most organizations have many reasons for underachieving: managers can't agree on a strategy, managers can't agree on priorities or managers are unready for twists along the economic landscape. But the most glaring reason for underperformance is that most managers stink at the art of firing people.
The economic and human costs are huge. Organizations stagnate when managers are too timid to ease out employees who are underperforming -- and these employees resent the palpable sense that they're not appreciated, which leads to sniping that yanks morale down further. Worst of all, a culture of non-accountability builds. It benefits everyone if the civilized art of "employee liberation" is cultivated.
Firing will always be a sensitive matter for the recipient as well as for bystanders (which is why armadas of legal and HR representatives are involved. You should consult all of them, because I don't want to get sued for my advice not being 100 percent appropriate to your particular institution, union or mob outfit.) Still a few larger principles exist:
1. Remember that no employee needs your charity. Too often, managers suspect they're performing an act of compassion by keeping underperformers on the payroll. They should ask shareholders and other stakeholders to which they're beholden whether that charity is appropriate. They should ask high-achieving colleagues if they feel such charity to underachievers is appropriate. Just as importantly, a manager would do an underperformer a favor if she instead gave him a new lease on their career, at a place that might be a better match for their talents.
In one corporation, a senior manager had little faith in the ability of a middle-manager but was too kind (or too cowardly) to terminate him. Instead, she moved him around from one department to the next over two years, while hiring new staff to compensate for his deficiencies. He in turn, understandably, felt unappreciated. When she finally dismissed him after having had enough, he turned around and filed suit. Consider her mistakes here: She bloated the organization's headcount irresponsibly; she failed to give him the proper feedback in real time that could have allowed him to make peace with the notion that he was a bad fit at the company; and she treated him too long like a charity case, which only increased his resentment and readiness to sue.
2. Clean up your own act. Judge not lest ye be judged, Jesus said, and cast not the first stone unless you're without sin. Everyone has had an easy enough time ignoring the good Lord's advice, save when we become a manager. Then, suddenly, we become humble at all the wrong times, unable to push an incompetent employee out, since we realize that we're not perfect either, and because we worry that holding someone accountable will lead to us being held accountable. Make up your mind to hold yourself to the highest standard, then you'll be able to hold your employees to a standard that your organization should expect from them.
3. Define success clearly. Your organization won't value you for just treading water. It will value you as a manager if you raise productivity or quality in your area. If you can't define what that looks like, you shouldn't be a manager. And if you can define it, for yourself and your employees, you now have clear, guilt-free parameters for addressing underperformance.
4. A firing, ideally, shouldn't be a surprise. There may be times when a firing has to be sudden. But for the most part, human beings resent the idea of the ambush firing or layoff. In companies, the "human" in "human resources" often yields to the "law" in "lawyer." This is understandable. But in too many cases, this leads to managers only having the guts to fire an underperformer for an irrelevant technicality rather than for the actual underperformance. If a valuable employee gets caught Facebooking during regular work hours, in a violation of company policy, her violation will likely be quietly reprimanded or ignored altogether. If a ne'er-do-well does the same, he may get canned. This approach is cowardly, as it allows expedience to take the place of honest discussion about overall performance issues.
5. You can be friends after a termination. In most cases, I've had good relations and friendships with those whom I've had to move out the door, mainly because they knew it was nothing personal -- just a matter of them and our organization being better served by a change.
I used to believe that nonprofits aren't as effective at firing than corporations, because corporations are more ruthlessly interested in maximizing profits. I later found that to be untrue; a classic example was a friend's PR firm, which organized workshops instructing managers on why never to fire employees, lest the firm get dragged into court.
It's certainly the job of lawyers to minimize legal exposure, and we can all respect that. But one key job of a manager is to maximize her unit's performance, and a pure obsession with lawsuit-avoidance doesn't allow for that. But the more pressing reason for effective firing isn't a legal or business issue, but a moral one: We owe it to one another to be honest about where we need to improve... and when we might need to move on. It's the human thing.