This article is part of a larger collection titled
The MDRT Hiring Guide.

Section 1: Hiring and retaining talent

Section 2: Employee compensation and motivation

Training and compensating junior advisors
Developing, compensating and retaining a protege
Design a simple bonus plan
Knowing what employees want encourages long-term commitment
Reduce turnover and encourage your staff with authentic appreciation
Get employees with performance issues back on track
Non-monetary approaches to engaging staff

Section 3: Employee processes/managing employees

It’s inevitable that at some point in your career you will have an employee who is not living up to your expectations. Having an underperforming or challenging employee is so emotionally draining that this situation is probably the one that most frequently causes advisors to reach out to me.

In addition, it’s sad how many advisors live with a problem employee simply because they don’t know how to or are afraid to address the situation. You may think that living with even a bad employee is better than having no employee, but that’s wrong.

If you’re living with an underperforming employee or an employee with a bad attitude, you know it can suck the energy out of a team, drain your bank account and make you dread coming to work. There is no need to let an underperforming or bad employee become a life sentence because I’m going to give you the tools to either make the situation better or make it go away.

I always approach the challenge of an underperforming employee from a positive standpoint. After all, you hired him or her. You believed in the individual. You made an investment in the employee. You care about him or her. So the goal is always to help that employee get back on track.

Here’s how we do that:
Step 1: Identify what kind of problem you have.
There are two types. There are “how” problems and there are “why” problems.

A how problem is a situation in which the person legitimately does not know how to do something he or she is being asked to do. An employee with a how problem might say to you, “Bill, I understand why you believe that having processes is so important. And I agree with you. But my phone rings 24/7, and I just don’t know how I can find the time to document my processes.” That’s a legitimate how problem. And you or, better yet, a manager on your team needs to help the employee figure out how to do what you need to have done.

A why problem is a whole different animal. A why problem sounds like “I don’t see why it’s necessary to document our processes. No one has time, and we all know how to do our jobs. It’s a waste of time.”

How problems are almost always fixable. Why problems are almost never fixable. If you’ve got a person on your team who always seems to give you why problems, that person needs to go.

Step 2: Name the problem.
This is something we often avoid doing. We hint at the issue, we roll our eyes when the same mistakes happen again and again, we get mad, but what we frequently fail to do is to name the problem. If we don’t name it, we can’t fix it. Chances are if you have underperforming employees, more than one of these issues will be involved:

AccountabilityThe work just isn’t getting done and the person has a bunch of excuses.
Attention to detail.There are typos, misspelled names, wrong forms and missed fields.
Communication.The emails to clients aren’t warm enough; the meeting summaries aren’t succinct enough.
Client focus.There is no sense of urgency when responding to client issues; they don’t behave like the client is a VIP.
Dependability.They are a little late to work almost every day. They frequently have to leave work early to take care of unplanned personal issues.
Flexibility.They “only have two hands.” When the priorities shift, they go to pieces.
Initiative.They’re smart enough, but if someone doesn’t tell them exactly what to do and when and how to do it, they sit around doing nothing.
Integrity.They take some shortcuts that compromise service or compliance protocols. Perhaps they take advantage of the organization in small ways that put their character in question.
Learning agility.They struggle with informal and on-the-spot training. They keep asking for classes, but that’s not how we train. Because they’re slow, methodical learners, the work is backing up.
Organization.Their desk is a disaster, and they can never, ever find what they or anyone needs. They doesn’t use the task management system. There are sticky notes all over their workspace.
Teamwork.They may really know their job, but they are difficult to approach and abrupt with teammates.
Technical proficiency.They are struggling to grasp the nuts and bolts of their role, and, consequently, little value is being added. “Nuts and bolts” may refer to technical concepts, processes or technology.

Step 3. Diagnose the cause of the problem.
The cause of the problem may not be with employees, it may be with you. Causes of performance problems include:

Unclear expectations.People are confused about their roles, tasks and projects. We ask, “Who’s on first?” and nobody seems to know.
Lack of communication. Proactive communication through staff meetings is essential. In the absence of good communication, people will fill the void with whatever they believe.
Ineffective delegation.Are you holding too tightly to the task strings? Too loosely?
Lack of training.Our industry is famous for its “baptism by fire” training of employees. We’re a school from which there are no graduates, just survivors.
Too much work.You can have a well-trained, effective team and have periods of dysfunction. Many times the culprit is simply too much work. That’s where looking at your activity metrics monthly can really help assess the intensity.
Wrong people.Sometimes the cause of the dysfunction is simply a wrong person. He may be wrong for the job or wrong for the organization. If someone is wrong for the job, no matter how skilled a manager you are, you can’t make it work. My old boss often said, “Kid, people change, but not much.”

Step 4. Set a meeting with the employee.
Calmly and directly communicate where the employee is falling short and how he or she needs to improve:

Name the issue.
Provide an example or two.
Collaborate on an action plan.
Set checkpoints so you can monitor progress.
Send a brief summary of the meeting and actions by email to the employee and put a copy in your management file.

Step 5. Stay on top of it.
You or your practice manager need to meet with the employee regularly until the performance issues are remedied.

If the issues continue, each incidence should be identified by a quick email.
If the issues are not resolved by the dates you set, you move on to the termination process.
If issues are resolved, don’t forget to formally communicate to the employee that the progressive discipline process has ended and she is now an employee in good standing.

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