Wake-up call: How to spot the tipping point for employee termination

Because terminating someone is such an important and complicated strategic decision, it helps to have an objective way to measure the impact of a difficult employee, including a dispassionate evaluation of the disruption caused by turnover.

Using a simple worksheet (like this one) to quantify the factors in a termination decision can help you evaluate the costs and benefits of individuals' performance, their impact on team dynamics and bottom-line results. You can list factors such as the employee's likelihood of improvement, the drain on your energy and the cost of replacement. The tipping point comes when the cost of keeping an employee is greater than the disruption of letting him or her go.

Consider the case of Jeff, a human-resources executive in a large global company (this is a disguised case). One of his managers, Karen, had a very strong skill set and brought passion and deeply relevant experience to her role.

She performed well initially but as the demands of her job grew she lost focus and had increasing difficulty completing complex projects. Unable to manage her time well, she became a demotivating influence on her team, failing to keep them informed.

For close to a year, Jeff tried to help Karen get back on track. Despite being an HR expert and well acquainted with best practices in delivering feedback, he was unable to overcome her defences and motivate her to work on her deficits. Worse, these conversations generally left her moody and unpleasant to be around.

Karen was well-liked, but she was so defensive when getting feedback that she couldn’t work on addressing the problems. Over time, Jeff found himself doing more and more of Karen’s job himself.

He continued to compensate for her gaps for far too long because the cost and disruption of making a change were so great.

However, Karen’s teammates grew resentful as her deficiencies began to affect the group’s ability to deliver. Jeff knew it was his obligation to minimise obstacles to the team’s performance, particularly as it was expected to produce more results with fewer resources. Equally important, Jeff felt drained by confronting Karen’s crankiness, especially when his effort had little chance of producing positive results.

Clearly, doing his subordinates’ work was not the best use of Jeff’s time, and facing Karen’s moods was not the best use of his energy. So in spite of her skills, experience and institutional knowledge, and notwithstanding the disruption that a vacancy would cause, Jeff fired Karen. Eventually, Jeff’s decision was fully validated by the significant positive impact of Karen’s successor. Jeff’s only regret was that he had squandered so much time avoiding making the decision.

Leaders are responsible for managing the resources under their control. In most cases, the single greatest resource they manage is people, with compensation and benefits consuming as much as 80 per cent of operating budgets. To sustain energy and engagement, and to retain the best talent, leaders must endeavour to make work life as manageable and palatable as possible for themselves and their teams.

Coming to grips with the need to fire a colleague, particularly when you've invested so much effort to remediate his or her weaknesses, is one of the toughest management decisions you'll ever have to make. – Copyright Harvard Business Review 2015 Allison Rimm is a management consultant, educator and executive coach. She is the author of The Joy of Strategy: a Business Plan for Life.