Firing People is a Lousy Way to build a Company.

There are some CEOs who believe that you should only hire “A” players and fire everyone else who doesn’t measure up. I am not one of them. Don’t misunderstand –I have fired people who cannot or will not do what is asked of them. But I don’t believe that automatically thinning the herd is a good technique for building a company. Here’s why:

Culture. When I was at MEC, the media agency, we built a digital practice up from almost nothing to 200 people over the course of six years. During that time I can only recall a couple of employees who were fired for non-performance. Was every person in the organization an “A” player? Of course not. Did every employee have the appropriate work experience before joining us? No. But our culture was one of helping each other to meet our company’s goals. As a result, we all got better as we went along.

Leadership. People cannot get better at what they do if they don’t have a clear idea of what is expected of them. For this reason I am wary of any leader who blames his or her “B” players for his company’s under-performance. Castigating the troops for your own failings as a leader is unfair and shortsighted.

Process. If you hired a person who didn’t work out, then something went wrong with your hiring process. I still kick myself for some of the hiring mistakes I made when I was younger, but I can take some solace in the fact that I have made fewer of them lately Coaching and appraisals. Unless you’re dealing with someone who is truly unmotivated or has personal problems, most employees want to get better. This is where regular check-ins and monthly or quarterly appraisals can help. If you’re having a performance issue with an employee, don’t wait for the employee’s next annual performance review to deal with it.

Responsibility. Some startup CEOs claim that the pressure to succeed is so intense that they can’t afford the time it takes to help their people get better. That’s nonsense. Great CEOs make everyone better, no matter what the obstacles are.

Stability. Nobody, not even “A” players, wants to work for a company that is unstable and constantly firing people.

Reward. Some CEOs with far more skin in the game than the rank-and file demand that everyone around them work as hard as they do… or else. That’s unrealistic and unfair.

Cost. Churning through people can take up a lot of resources in terms of time, severance pay, recruiting fees and even lawsuits. Just ask Time Inc., which recently took a $60 million charge after letting hundreds of people go.

Firing should be an option of last resort, not a strategy to build a company.

By Matt Straz
Matt Straz was a senior partner at MEC from 2002-2008. He is currently the CEO of Namely.
Courtesy of MediaPost