It happens to employers all of the time, and regardless of the size of your company, you often wonder if someone doesn’t seem to be working out for the amount of money you’re paying for them. The question you need to ask yourself first and foremost, “am I ready to consider letting them go or doing a salary reduction?” Depending upon what you have agreed either verbally or in writing, you need to start first when you hired them.
1. When you went through the hiring process, they likely gave you a higher than normal salary amount than they were used to making and you likely took it on blind faith that they were being honest with you. However, you realize that their skill level just wasn’t there and you need to determine what to do.
If things were fairly recent, say you are still in a 90-day probationary period, you have some discretion to consider either replacement or a potential salary reduction. However, in the State of Texas, if you reduce an employee’s salary (if they are hourly or salaried) at least 20%, then they have the legal right to pursue unemployment. This is a key factor. If you choose the route of replacement, then if people should ask, “it just didn’t work out” is an appropriate response.
2. You encourage your employees to perform better work with a nice raise and/or bonus, but suddenly they begin slacking off. Money isn’t always the best motivator for employees, and in fact it can often backfire.
Just as noted in the previous response, it can be financially detrimental for you to do a salary reduction, so you need to consider other alternatives. Discuss directly with the affected employees, what their true motivation is, why you felt they would do better with a raise, and try to work together as a team for the common goal of increased productivity. Unfortunately some people still have the belief that you can throw money at everything, but in today’s economy, that’s not always the case.
3. You’ve hired an absolute idiot but you’re not sure if you think they can be fixed.
Ask anyone who has dated someone because they thought they could change them, and after several months or even years, realize that this is who this person is and nothing more, they learn to simply move on. How much is your business worth to avoid suffering this waste of time and money, when you could be focusing on growing yourself and your company? Some people cannot and will not be changed, so “if they don’t make you money, why make them money?”
About Our Show Advisor: Dwayne Briscoe is the founder and owner of Bookkeeping-Results, LLC. Dwayne began his company in January 2007, based on the foundation to educate small business owners and bookkeepers who use QuickBooks®. Working as a full-charge bookkeeper and trainer in a variety of industries for over 15+ years, he is a certified Pro Advisor with 5 certifications, including Enterprise Solutions and Point of Sale. He is also an instructor at Brazosport College in Lake Jackson, where he teaches basic accounting, QuickBooks®, and basic payroll, along with hosting his own private classes.
Bookkeeping-Results, LLC has focused more on quality and not quantity for their clients, by paying attention to the details. Through regular continuing education participation, as well as exploring additional ways of “thinking outside of the box” to help expand people’s knowledge of their own financial well being, it’s important to focus on not only saving the client money but also making the client money.