In the hunt for purple squirrel, where do bad hires stand?

Is it okay to jettison poor hires for effective corporate navigation and how it should be done? 

When a boat is sinking, everything is done to save the ship and human life in it. The luggage, equipment, and fuel are thrown off the boat to keep it floating. It’s called jettisoning.

Now think of applying the same analogy in corporate management. Would it be alright to remove bad hires just like that? Because we are talking about human life here. But the cost of bad hires is huge and if we are talking only about money then we are not talking at all. Can bad hires be avoided? And can this mistake be mended with least possible damage?

But first things first. Before we answer those questions lets understand what exactly is a bad hire.

A bad hire doesn’t fulfill any of these:

• Proper performance
• Positive attitude
• Team bonding
• Ability to match the expectations set when interviewed
• Discipline and ethics

A study from Glassdoor says 95% of companies agree they hire wrong people. If this stat caught you by surprise, what’s even more surprising is that 1/3 of these organizations haven’t even got a clue on how costly this mistake can turn out to be.

With every hire, there’s a cost involved: fees for advertisements, technological cost, salary, training, and severance pay if you remove a bad hire. Then there are intangible factors too, uncountable but grave: loss of business profits, reduced team morale, greater turnover costs, and the likes. A CareerBuilder survey states the average cost of one bad hire is equivalent to USD 50,000. Zappos CEO, Tony Hsieh, has gone on record to say the cost of bad hires for them is USD 100 million. According to another reputed human resource industry association, a single wrong person costs 5 times his/her own salary. The greater the position and longer the tenure of the position, the higher is the cost of replacement for that position. In other words, the cost of replacement is 21% of the annual salary of the employee.

Red Flags: How to Know You Have a Bad Hire:

Questions: If an employee doesn’t ask questions throughout his span in a company then he doesn’t care much. Though you have to be intuitive in such cases, couple the trait up with other signs below.

Job Hopping: A job hopping tendency is a clear sign that a person is looking out for the moolah side of a job and isn’t passionate about the job description.

Excuses: If during an interview, an interviewee blames every external source for failures and accepts no shortcomings on his/her part, this suggests loophole and you have to be clear how you navigate your action plans.   

A Multi-Pronged Approach: A Step-by-Step Process

When you have known through various supervisors and behaviors of the professional that she is not a right hire, here’s how you go about it:

Process: The organizational charter should contain a written document that broadly outlines a complete progression of corrective actions from disciplining the employee to her termination. An unwritten or verbal policy is never clear and is not even fair.

Training: Check the trainability of the employee by answering these questions:

• Are there specific details the individual needs to complete tasks efficiently?
• Is there any specific skill you can arm your employee with, which will help her perform optimally?
• Are descriptions or performance expectations undefined?
• Is a usually good-performing person showing sudden behavioral changes?

 Warnings: If the employee fails to improve satisfactorily even after training, disciplinary actions in verbal and written forms can be taken against her. If still, no change is visible, you have to go forward with her termination.  

Employee Termination: According to Mary Dunlap, a consultant, you can’t drop an employee just like that. Consult legal authorities on laws governing suspension and severance pay. Check employee on these parameters before you conclude termination is the best way forward:

• The standards of professional behavior have been established in advance and communicated effectively to the employee.
• The testimony or proof of employee culpability has been obtained.
• The employee has been communicated about his/her non-optimal performance.
• Corrective action has been taken.
• Expected performance and discipline standards have been repeatedly and clearly communicated to the employee.
• The exact consequences of non-conformance have been duly communicated to the employee.

The Art of Effective Firing:

Here’s what Warren Buffet has to opine: “Its pure agony, and I usually postpone it and suck my thumb and do all kinds of other things before I finally carry it out.”

• Jack Welch’s ‘Rank and Yank System’: Going by opinions of Jack Welch, Rank and Yank is a popular system for grouping all members of an organization into three categories of the top 20%, middle 70%, and bottom 10%. The middle rank must be trained and coached successfully for them to be pushed into the category of top performers. The bottom 10% have to be let go. This has also found its way in Welch’s book ‘Winning’.
• Netflix’s ‘Adequate Performance’: Netflix is very particular about the ‘top performing legacy’ it propagates. In contrast to sound-good policies, the culture speaks of either do or die (not die, but leave aka get fired). CEO Reed Hastings has given strict and clear instructions to the talent acquisition team which goes with the mandate- ‘which of my people, if they told me they were leaving, for a similar job at a peer company, would I fight hard to keep at Netflix?

Same is the philosophy of Bonobos CEO Andy Dunn who believes firing is as much a part of the organizational landscape as much as hiring is. It helps growth.

Some great pointers:

• No surprises: Candid feedback and clear expectations do a much effective job than giving an employee a shock of the lifetime.   
• Intervene ASAP: When you have recognized the mess, try cleaning it up with a transparent, formal, and methodical Performance Improvement Plan (PIP).
• Keep the negative office sentiments in control: Maintaining confidence in your business and brand is very crucial while firing and terminating bad hires. Effective communication with the rest of the team would be helpful. There’s no point in employing humiliation to fire somebody publicly when it can be done within the corners of cubicles.

All it takes for efficient hiring is the very first interview question. The rest is molded around it. 69% of companies agree to a flawed interview process. The chances of hiring a wrong person increase to 5 times if no standardized protocol is followed in interviews. Wrong questions lead to wrong hires.

Attract the right candidates by portraying a positive brand image. As candidates are shopping your brand values, establish a great candidate experience. A strong onboarding improves retention by 82% and productivity by 70%. Make hiring a slow boiling cauldron and not microwavable stuff.