Why You Should Cut Your Losses Early With A Poor Performing Employee

Millennials who graduated between 2007 and 2010 can expect to earn less money over their lifetimes than people who are graduating this year. Why? Because they started their careers during the recession and got off to a poor start.

As author Daniel Pink illustrates in his bestselling book When: The Science of Perfect Timing, a poor start has long-term negative effects.

I have seen this phenomenon many times in business: It’s really difficult to overcome a bad beginning. At my company, Acceleration Partners, there’s a very high correlation between employees who start well and those who become high performers, sometimes even taking on leadership positions. On the flip side, employees who don’t start well often continue to struggle and can drain limited organizational resources.

I know many company leaders have noticed the same trend. Often, they ignore the red flags raised by a poor start.

That’s understandable. No one likes to admit a new hire is not living up to expectations. Nevertheless, after making this mistake many times, we eventually changed our approach. Now, team members trust their gut instincts and face the challenge of rethinking hiring choices — even when that means initiating a difficult discussion or making a tough choice.

Here’s why we made the change.

People who start off struggling rarely recover.

Employees who start poorly can improve, but their improvement often has a ceiling — especially when they’ve struggled with core functions that other people hired for the same role do very well from the start.

The poor start also generates a lack of trust with the team and with management — a deficit that becomes harder to overcome as time goes on. It also costs money to train, support, coach, and sustain these employees. Investing resources to get a worker just up to the expected baseline performance for when they were hired often represents a big opportunity cost — and a poor return on investment.

It’s often better for all involved to cut their losses.

At my company, we now make decisions about struggling employees after just a month or so of poor performance.

First, we ask ourselves: Does this person share our core values? If not, we know it’s not going to work out.

Next, we consider whether the employee is just in the wrong role. If so, we look to see if there’s a better spot for that person in the organization. (Unfortunately, such a role is not always available.)

Finally, we bring the employee in for a open and honest conversation. It’s rarely a surprise, they know they are struggling. It can be a relief.

At that point, both sides often acknowledge the possibility that a mistake has been made. We talk about the employee finding a position that is a better fit somewhere else and discuss how we can provide support through a process we call “Mindful Transition.”

It’s an advantage to have this discussion early, because it gives the employee a chance to make a clean start somewhere else without doing resume damage. A really short-term hire can simply choose not to acknowledge ever having worked at our company. For both the employee and the company, this early action also minimizes the cost of doubling down on an effort with a low chance of success.

If you find employees are regularly making poor starts at your company, take time to examine your hiring process, your onboarding training, and your methods for setting expectations. Think about what you could be doing better.

But don’t ignore that little voice in your head or that feeling in your gut. As author Malcolm Gladwell summarizes in his book Blink, your initial judgments are often based on hard-earned experience.

Stick to this rule: Never invest to get to “average”.

In my company’s early days, we had managers who were happy to spend time and energy coaching under-performers we probably never should have hired in the first place. That’s time and energy we could have put into growing our best people.

Companies thrive thanks to the energy and productivity of great employees. New employees who start poorly and don’t improve quickly will have hard time reaching that level.

Don’t limit your company’s potential by failing to make the hard decisions. You know it’s the right thing to do.

This post was originally publishing in Inc.

Robert Glazer is the founder and CEO of Acceleration Partners and the author of the international bestselling book Performance Partnerships. Join 35,000 global leaders who follow his inspirational weekly Friday Forward, invite him to speak, or follow him on Twitter.