Why dealing with underperforming employees is essential for your startup’s success

Why dealing with underperforming employees is essential for your startup’s success

Dan Finnigan is the CEO of Jobvite. He spent his career launching and growing Internet businesses with a focus on the recruitment market. Previously, Dan served as Senior Vice President of Yahoo! and General Manager of Yahoo! HotJobs, and was CEO of Smartpages.com (now Yellowpages.com).

Dealing with an underperforming employee is never easy, especially in the case of a startup. It’s easy to grow attached to an employee who took a chance on your company, making it increasingly difficult to discipline or take action against the employee in the case of underperformance. Yet, it is imperative for a startup founder or manager to put both discomfort and any personal connections aside, and do what is right for the company. Inaction will not only severely harm the business and other employees, but the underperforming employee’s career as well. For these reasons, I believe firmly that inaction is a form of professional abuse.

Always give your employees feedback

An employee should receive constructive criticism from a founder or manager from day one of their employment so there’s no question about where they stand. If you decide there’s an underperformance issue and the employee hasn’t made changes based on feedback, it’s critical to act quickly. There are serious implications if you fail to take action or if you drag your feet. By allowing an underperforming employee to stay in the position they are not fulfilling, you are damaging their career. Chances are if you aren’t happy with your employee’s performance, they aren’t happy in their current position as well and would be better off in a different role inside or outside of your company.

One bad apple can spoil the bunch

A company is a team undertaking and higher-performing team players will be severely impacted by an employee who is falling short. For people who are good at their job, working with an underperformer is frustrating and discouraging. Inaction will cause a performing employee to not only lose faith in the manager’s ability to put the company’s best interests first, but could also create a ripple effect by either causing higher performers to underperform themselves or push them to look elsewhere. The impact of inaction will not only be felt by performing employees. Your company’s bottom line will take a hit as well. Happy employees are better at their jobs, which is why so many companies go above and beyond to offer employees unique perks. Perks are great, but ensuring your employees have competent and capable coworkers will satisfy your employees at a very basic and necessary level. The happier your employees are, the better they will perform, which will help your company achieve success. Additionally, by keeping an underperformer employed, your company is throwing money into a black hole for training and development that could go towards someone who’d be better suited for the role. As painful as it may seem to have to address an underperformance issue or even worse, have a vacancy to fill, the short-term pain will be worth the long-term gain of hiring someone who will thrive in the role.

Some things aren’t meant to be

When dealing with an underperformer, it is important to remember that just because an employee is not right for their position, doesn’t mean they are not right for another company or role within your company. Help the underperformer figure out their next steps in their career, since you have a unique perspective of your employee’s strengths and weaknesses. Image credit: saiva/Shutterstock

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