No function of management is more critical than hiring people who will go on to be competent, productive and loyal employees. Unfortunately, the vast majority of hiring decisions are made by people who are novices at the game. They rarely hire more than a few people a year and as a result, they make mistakes.
After all, hiring is an act of faith-you hire with the expectation that your workers will succeed, not fail. And it's pretty hard to accept failure.
You may be a shrewd judge of character, but you cannot know in advance what a person will or will not do. You may have to fire someone tomorrow who wins your approval today-things don't always work out as you thought they might. And if you have to fire someone, it means that you didn't hire the right person in the first place.
Firing an employee is one of the toughest, stressful and unpleasant things you can do as an employer. When I operated my own dealership and retread plant I had to fire a number of people and, from personal experience, it never gets any easier.
Even when there was ample reason, it was enough to give me a big headache. Firing has always been an uncomfortable chore, but it used to be clear cut and relatively free of legal complications. You simply paid the former employee his accrued wages and any earned but unused vacation time. And that was that.
Things are a lot more complicated in today's litigious society. The 1991 Americans with Disabilities Act is one of the vaguest on the books as it leaves much of its meaning for the courts to decide. Congress thought the law would have greater impact on hiring, but that hasn't proven to be so. Most ADA litigation focuses on firing and lost benefits. Firing claims outnumber hiring claims by 6 to 1.
Every time you fire a worker, you risk being sued. Hell hath no fury like an employee you've just fired. Do it for the wrong reason or in the wrong way and you may find yourself paying out a lot of money in damages, or having to re-hire the worker.
Some people who file complaints may not even want their old jobs back, they devote their attention to finding a new job. However, they do want to punish their employer and they expect a fat financial settlement.
The number of wrongful termination suits filed each year has increased about 2,000 percent in the last decade. A few years ago the Rand Corp. examined 120 unjust dismissal cases decided by jury trial. Employees won 82 cases. Employers averaged $80,000 defending themselves. The plaintiff's attorneys got 40 percent of the collected damages and legal costs just about equalled the damages paid.
Attorneys profit almost as much as their clients and they don't have to hunt for business. An employer may face a lawsuit every time a person is terminated. The American court system gives employees the financial incentive to sue. It acts something like a lottery, with jackpots awaiting those who win. You can avoid funding someone's jackpot by making sure you don't have to go to court in the first place.
It's important for your company to have a firing policy-one that is in writing and detailed enough to cover any situation that warrants dismissal. It should also be part of the training program and ground rules for new employees.
But no matter how carefully you lay the groundwork to fire someone you expose yourself to litigation-anyone who gets mad enough can sue. Firing can be a drastic and traumatic step and as a result many employers hesitate to fire even the most incompetent or unproductive worker. Some employers give in by choosing not to fire problem workers until their manageable troubles grow into crises.
Some years ago, I was visiting a retread shop that was having problems repairing radials. It was an exercise in futility. The repairman had his own ideas on repairing radials and resisted every guideline with the assertion that repairing a radial was no different than repairing a bias-ply tire. A tire was a tire. Radial patches caused sidewall bulges-bias ply patches were stronger and the only type to use. I was only trying to sell radial patches.
At the end of my visit I discussed the problems with the shop owner and recommended termination of the repairman as I could see nothing but trouble ahead for the shop.
Some months later I returned to the shop to examine a failed repaired tire involved in a lawsuit. As I entered the shop, the same repairman greeted me with, ``You're the S.O.B. who tried to get me fired. Well, I'm still here!'' Yes he was, and so was the problem-only now it was a major crisis.
The shop owner told me he decided to keep the man on because he had a family and felt sorry for him as he did not want to create a crisis in his family life. What he did not understand was by not firing the problem worker he made a bad situation worse. It was unfair to the other employees as it jeopardized their own situations. The lawsuit was found in favor of the plaintiff for a very large sum of money and the shop closed its doors within the year.
Retreading is a labor-intensive industry, so we don't have the option of using automation to handle many tasks like some other types of service businesses. Tire dealers and retreaders have no choice but to hire locally and the people they hire must work hard. As a result, many fall victim to high labor turnover.
Entry-level employees are drawn from the group of people living around you. Take a good look at who lives in your area because that's who your workers are going to be. That means immigrants and minorities these days. Most will need special job training, some need to learn the language and some may need basic math.
A trap to avoid is the tendency to hire only those people with experience in retreading. This not only limits the field, it fosters inbreeding; you often end up with people who have been recycled through other shops with different working procedures. Re-training can be a problem.
Since our economy is now a service economy, employers must invest in training people. This, too, costs money but it allows you to search among a greater number of people in filling a job.
Training is a matter of investing money to limit your exposure to loss. The solution may seem expensive, but the alternative can be 100 times more costly. It can often break your company.
Sometimes firing an employee is the only solution to a problem. And sometimes you have to act even if you're not sure you are doing the right thing. You must act decisively and quickly and take as much care in firing your employee as you take in hiring.
If you rely on gut feelings when you hire someone, you're likely to end up with other gut feelings later on-namely heartburn and ulcers.