How are you handling your problem employees?

You’ll note that I didn’t ask whether you have them. It’s likely that if you’re an organization with multiple employees, one or two aren’t performing quite the way you’d like. (Of course, as is the case in many associations, it may be you’re the sole staffer—which is its own kind of problem.)

You have them. But how do you manage them, handle performance reviews for them, and, if it comes to it, let them go?

“I hate coming up with the questions. I hate asking the questions.”

Last week, small-business owner Paul Downs shared his experience on this front in a series of candid posts for the New York Times‘ “You’re the Boss” blog. Downs’ furniture shop had been climbing out of the the doldrums of the Great Recession, and for a while he, er, tabled performance reviews for his staffers to better focus on day-to-day concerns. Like many leaders, he found performance reviews time-consuming, potentially divisive, and perhaps not especially informative. “I hate coming up with the questions,” Downs wrote. “I hate asking the questions. I hate hearing that my workers wish that they had a better job when I’m doing the best I can just to keep the doors open. I hate the pressure to give everyone more money. And I hate the enormous amount of time involved.”

But as business picked up and the company grew, a few of the fault lines at the company became increasingly exposed. Though Downs had 17 employees, he was particularly concerned about one, whom he calls the Veteran. You can probably sense the problem from the nickname alone: Lots of experience, gets the job done, but relatively inflexible and often alienating with coworkers. A newer, more creative staffer was promoted over him; sensing that the Veteran was quietly seething, Downs offered him a position with some new responsibilities after the first set of revived performance reviews. But months later, he was unhappy, and his unhappiness was beginning to radiate outward.

In today’s post, Downs disclosed what he decided to do, and I won’t spoil it by sharing his decision here—the post is worth reading in itself. Regardless of which way he ultimately went, though, there are a few aspects of Downs’ leadership during the period he describes that are worth discussing.

Throughout his posts, Downs is a remarkably empathetic executive, sensitive not just to the shifts in the business landscape and the capabilities of his staff to respond to them, but to the emotional temperature of his employees. But his posts lack much evidence that he was actively involved in talking with them. He mentions Monday-morning all-hands pep talks with his staff, but largely seems to delegate management of the shop floor to others. Moving away from wearing sales and shop-floor duties, he writes, gave him “a lot more time to devote to tasks that would make the company better.” But on the evidence, that didn’t entail much extended regular engagement with staff; it wasn’t until he began writing performance-review questions that he discovered what it is he truly wanted to know about them. He says that before he reimplemented reviews that a lot of his plans to do more of it were “had been just talk.”

This is the problem with performance reviews—or, rather, with the mindset that allows leaders to think that there’s no serious problem with staff that can’t be fixed by doing a once-yearly drill-down with each staffer. I like John Spence’s “four sheets of paper” method of helping troubled employees get back on track, but that’s not a conversation to delay. Reviews can show you where the gaps are between your perceptions and an employees. But regular engagement can narrow them before it comes to review time.

It can also clarify when an employee needs to go sooner rather than later. Last week, nonprofit consultant Jerry Hauser delivered a bit of tough love at the Stanford Social Innovation Review, writing that letting go of low performers, however stressful, is one of the most important moves a leader can make. That’s in part, he writes, because a leader’s time is better spent elevating top staffers than helping struggling ones become competent.”[T]he pay-off from your investment in strong performers is often far greater than it would be if you focused on getting lower performers to raise their game,” he writes. That makes for an uncomfortable conversation for both sides, but better to address it head-on than delay it until some artificial review period.

What’s your strategy for performance reviews, and what do you do to keep tabs on your staffers between them? Share your thoughts in the comments.

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