An experienced business development expert with more than 40 years’ experience - Gary Newborough has done it all.
During his varied career, he’s worked as head of management development for BT, headed up the Kent Chamber of Commerce and enjoyed success as a restaurateur at one of Manchester’s hottest venues.
Now working as an independent business consultant, Gary provides distilled guidance on multifarious issues, ranging from marketing and management to development and HR.
In this guide, Gary offers SMEs advice on dealing with problem employees and how to prevent them from becoming dissatisfied in the first place.
What are some of the best ways for SMEs to deal with problem employees?
People don’t generally set out to be problem employees. Every member of your team has a contract of employment, which sets out clearly what’s expected from that person. It might cover the specifics of your job in varying amounts of detail, but it’ll contain details of how much you’ll be paid and what holidays you’re going to get.
The thing is, everybody thinks that’s all there is to the employer/employee relationship, but that’s far from the case. There’s another level at play, which we’re all somewhat aware of, and that’s the psychological contract that governs the expectations of both parties. And it’s when there’s a drift or difference between those two sets of expectations that problems first start to develop.
This can generally fall into one of three categories. The first is the ‘coercive’ psychological contract - where people who work for your organisation perform out of a sense of fear. They do things because they’re told to and their performance is directly proportional to the worries they have about repercussions.
As with any management style, this has its pros and cons. In areas where staff have to do fairly routine tasks without deviation, for example, it can be effective.
The second is known as the ‘calculative’ psychological contract. This is where people are motivated by the prospect of performance-related bonuses, a higher salary or promotion and are willing to go the extra mile to achieve this. Again, this can form the basis of a perfectly healthy employee/employer relationship, but problems can arise when it’s exploited, quite cynically, by either party.
Employers can move the goalposts and keep holding these rewards ever-so-slightly far out of reach of employees. Similarly, employees can know just how far they can push things, know just how much effort they have to put in and follow instructions to the letter - and not beyond - to achieve these goals.
Finally, you’ve got the ‘cooperative’ psychological contract, where both employee and employer are both moving in the same direction towards mutually beneficial goals. It can be quite hard to define exactly where the transition from calculative to cooperative takes place, but it tends to feature the employee having more of a direct influence over how their work is carried out and/or business-level decisions.
Obviously, the specifics can differ and this isn’t always possible in every role, but you find that where cooperative psychological contracts exist - there tends to be very few problem employees.
How can SMEs foster cooperative psychological contracts?
Firstly, you’ve got to establish an environment where the employer and employee have very clear views of what their expectations are and how these are going to be met. This necessitates an open and honest dialogue between both parties, where they set down and air their expectations.
This shouldn’t be a one-and-done, however, and should take place on a regular basis. Then, if gaps in performance do arise, it should be quite comfortable to explore these and come up with a strategy for eliminating them.
Most organisations will have some kind of formal appraisal system, however, this shouldn’t be an annual exercise that’s sent down from head office. In my work with The Skills Company, we’ve helped to train many managers in appraisals. Interestingly enough, we’ve also trained appraisees in understanding their part in the process.
In most cases of a difficult or problem employee, it’s an issue where there isn’t clarity about their role or they lack the necessary training to carry it out to specification. And a regular appraisal process can help to bring that employee back into line.
In a small number of cases, there can be bigger issues. An employee might be a square peg trying to fit in a round hole or they might struggle to keep up with changes in technology.
It’s sad, but the organisation then has to deal with how both that employee and the organisation is going to be best served in the future and sometimes, that means parting ways.
Is managing people out a major undertaking for employers?
When you’ve exhausted all other options and it becomes time to manage people out, this can be a fairly straightforward process - but only if you’ve followed the right HR pathway.
If you’re abiding by relevant HR regulations, it needn’t be a major undertaking. However, while many organisations do go through the correct steps during the disciplinary process - they often don’t document things properly.
In cases where this process is mismanaged, the end result is conflict, expense and potentially even legal costs if taken to tribunal. Proper management of the disciplinary process can be quite straightforward, but it’s necessary to tick all the boxes. Taking the ‘seat-of-the-pants’ approach may seem more efficient in the short term, but it can lead to serious difficulties and greater expense.
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