Friday, May 29, 2009

Wasting Money With The Wrong Staff

In an earlier post, I posed the question, "Do charitable organizations have a duty to spend their grants and donations the way a reasonably prudent business person would spend his or her own money?" My goal was to prompt discussion on whether not-for-profit managers have a duty to use their resources to the best of their capabilities. I believe that duty is higher for those who manage taxpayer funds than even the duty on those who manage shareholder and investor funds. Based on some questions and stories I received since then, this topic deserves more discussion.

The issue tends to come up only when there is some type of problem: employee performance is substandard, financial resources are squeezed, or the overall economic outlook is exceptionally challenging. That makes sense. In good times, most people are willing to overlook things and put off unpleasant tasks. When times are tough, however, every “minor” matter becomes an aggravating thorn in the organization’s collective neck. But that does not mean managers snap into proper form and deliver.

Take a recent example that is behind the headlines: a public school district in a large U.S. city is cutting teachers because of severe budget problems. All across this large district, experienced, good teachers are getting pink slips. Yet in that very district, other teachers who abusively yell at kids or sneak out during the work day to meet friends for coffee will not lose their jobs.

Another example comes from the nonprofit sector. Even though one particular organization is not facing budget cuts, it never has enough money to hire enough staff to meet the needs placed on it by the communities it serves. Yet within that large organization are staff who have been moved from department to department because they are either incompetent, unmotivated or incapable of performing their jobs adequately.

Both of these situations were created by the same thing: supervisors’ refusal to take the steps necessary to appropriately set expectations and terminate employment for substandard performance (or even outright policy violations).

If you have managed people and been responsible for hiring and firing, you may sympathize. It is not fun. No one likes to do it. Unless the employee is a total jerk or commits a crime, there is no satisfaction in tossing anyone out onto the unemployment rolls even in good times. But making good firing decisions is just as important as making good hiring decisions and when budgets are stretched thinly, it may be even more important.

Here is why: somewhere there is someone more capable who wants that job. In today’s economy, they may even be unemployed and also need it. By leaving an unacceptable employee in his or her position, you not only cheat that very worthy, motivated, qualified prospective employee of the opportunity to do a great job for your organization and its constituents, you also cheat your funders—who do not get all they should for their money, your other employees—who pick up the slack or at least share the strain caused by a weak link in your staff lineup, and the communities you serve—who get BOTH substandard services from these inadequate employees and less total services than they would get if everyone was working at capacity. And when the funders are taxpayers, directly or indirectly, they have every right to want to see heads roll: their money is being misappropriated from its intended purpose and diverted to someone who cannot or will not do the job while too many willing prospects sit idle. It is offensive. It is immoral.

What should an organization do? It is not complicated or difficult and you have probably heard this countless times if you have been in management very long: set expectations and build a file when your staff fails to meet them. You take risks if you are sloppy, and perhaps some managers avoid this process because they think it takes too much effort. However, this is not difficult to do correctly. The reward is great, however, and the effort is generally short.

First, make sure you have clear performance expectations for all employees, from the top to the bottom. Exempt no one. Second, make sure those performance expectations have been communicated to each person. It sounds odd, but it happens more than you would think that job descriptions are buried in HR files and never handed out.

Third, document your training and offers of help for anyone who lacks the skills and knowledge to perform their job duties. Fourth, document every incident where the employee has failed to meet expectations AND your plan of action for helping them avoid future incidents. Finally, take prompt, progressive, appropriate action when failures continue.

Progressive action could follow this type of pattern: oral warning -> written warning -> probation -> suspension -> termination.

Before you hire a replacement, review those performance expectations. You want to hand them to the new hire on day one. Hopefully, you will not have to follow this plan very often. Unfortunately, if you are an employee, you probably have worked or will work for a manager who never does.

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