YOU’VE LOST YOUR EDGE

Steven Cesare, Ph.D.

A business owner from what’s left of the state of California called me the other day to talk about various human resources issues including compensation, staffing, and performance management. When talking about the employee discipline incidents, the owner shared details about an employee who has repeatedly missed performance goals, demonstrated ongoing absenteeism, and developed a penchant for making derogatory comments about co-workers, management, and the company in general.

Upon hearing the well-documented details, I asked the obvious question regarding the timing of the employee’s implied termination date. In response, the business owner told me that he no intention of dismissing the employee. True to form, I reflexively inquired about the rationale for his reluctance to take action and remove this problematic employee from his team.

Sheepishly, the business owner explained that he recently “survived” (i.e., went through) a very long, difficult, and costly legal claim from a different employee. Despite possessing suitable EPLI coverage, due solely to that stressful experience, and the associated fear of possible future reoccurrence, the business owner told me that he does not want to do anything that will put him in that situation again. To that end, he stated conclusively that he does not want to write up or terminate any more employees.

I told him point blank: “You’ve lost your edge!”

Upon hearing my pointed assessment, the business owner hastened to soften his declarative position, through an oblique excuse referencing the politically correct position that he is trying to preserve company viability, avoid fulsome legal fees, and promote a more employee-oriented culture. While that rhetoric may sound cosmetically appealing for a fledgling company of $2,000,000 in revenue, it is holistically misguided for an established company approaching $13,000,000 annually.

Let me be clear. It’s his company, and he can conduct his business operations, especially the employee discipline process, any way he wants to. And honestly, given his ownership role, I respect his decisions; even though I don’t agree with them. It’s still his company.

As a capitalist, after a brief pause in our conversation, I focused on the incontrovertible impact of accountability to his company’s success, and how employee coaching, discipline, and documentation contribute to stated performance expectations which are directly linked to organizational goals. Dismissing accountability is an invitation for anarchy.

I sincerely acknowledged his visceral aversion to another potential lawsuit, though I persistently, albeit delicately, reminded him that risk is inherent in many organizational functions like driving vehicles, operating equipment, handling chemicals, and so on. Risk can seldom be avoided, especially when employees are involved; but it must be managed properly to minimize its potential hazards.

I worked from a position, that given today’s litigious work environment, other than selling his company, or hiring a replacement General Manager, the likelihood of future litigation must always be considered. From that stance, I suggested that his company expand its training resources onto various supervisory skills like: employment law, documentation, coaching, conflict resolution, interpersonal skills, goal setting, and conducting performance appraisals. All successful business owners work from the inferential assumption that enhanced supervisory training minimizes exposure to future litigation.

The role of company culture was also discussed. Employee rewards and recognition are at the opposite end of performance management spectrum, antipodal to employee discipline. A mature company culture must contain both components: positive affirmation and performance correction. A company culture distinguished for such balance, underscored by frequent communication and team building, can reframe formal discipline as performance feedback, not personal attack.

Successful business owners manage functional, personal, and legal risk every day.

The best way to manage risk is to lead with a tempered edge; not by fearing it, denying it, or, avoiding it.

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