Rehab or Reject Problem Employees: When Technical Skills Aren't Enough

For midmarket companies, replacing employees can be costly. Can CIOs turn difficult staffers around? If not, when should they cut bait?

When employee work styles or poor soft skills imperil performance, you gotta do something: rehab or reject.

When Christopher Saah was promoted to CIO of Transwestern, a privately held commercial real estate company, he sized up his team. Of the 34 people on staff, one stood out as a particular management challenge.

While technically astute, she maintained strict adherence to logic and process, which sometimes left customers cold. When the company's brokers asked for software changes that would make it easier for them to access data from the road, for instance, she would respond by listing each piece of information missing from the request, along with numerous reasons the changes would not work -- all in excruciating technical detail. "You could literally see the [brokers'] eyes glaze over," Saah says.

Discouraged, he confided in his wife, "This is not going to work. My first challenge is going to be to replace her."

At least that was his gut reaction. Like many CIOs at midsized companies, Saah had little training on how to manage problem staff, especially technical staff, many of whom have spent their careers honing their technical skills at the expense of people skills.

Problem employees come in all stripes. Some are chronically late, some drink or nap on the job, some have been known to embezzle. Francis Juliano, CIO and chief marketing officer at the Wine Enthusiast Cos., a privately held marketer of wine accessories, publications and events in Elmsford, N.Y., has encountered all these problems during his career, though not necessarily among his own employees.

In a past job, Juliano discovered that a co-worker liked to sleep during the day so much that he came prepared with a pillow and blanket. The habit came to light when the man's child was hurt at school and his co-workers couldn't rouse him to answer his office door. When they burst in, they discovered him, supine, under his desk.

While firing troublesome employees may seem efficient, it can be especially problematic for midmarket companies, which often rely more heavily on individual expertise because they don't have deep benches. When a problem staffer is also the only programmer who has sought-after skills such as security or business analysis expertise or Web services know-how, the CIO is not in a good position to discipline the employee, let alone fire him.

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What's more, firing is costly. When you add the costs of paying severance, hiring contractors, and recruiting and training a new hire, it can add up to 250% of the departing employee's salary to replace him, says Diane Berry, managing vice president at Gartner Inc.

On the other hand, keeping the wrong person in a job can cause major problems. A poor performer "sets a low standard for everyone else," says Andrew Walker, a research director at Gartner. And tolerating lower standards leads to lower morale and productivity, which may cost more than simply replacing the problematic person at the outset, he says.

When they face the question of whether to fire or retrain, CIOs at larger midmarket companies can probably count on help from their human resources departments. But CIOs at smaller companies are less likely to have robust HR departments. Worse, CIOs themselves are less likely than other executives to have management training. Chances are they learned what they know about management by observing their own bosses. "If they had a bad boss and learned from that, they're going to repeat those bad habits," Walker says. In the context of personnel problems, bad management habits include ignoring festering problems and, on the other end of the spectrum, firing people when it's not necessary.

Humberto Quintanar, CIO at Antelope Valley Hospital in Lancaster, Calif., maintains that firing poor performers at the outset is the easy way out. Quintanar likes to assume that most problem employees can be rehabilitated. "These people have talent. They have probably been in the company for a long time. Just because you happen to come in as the new CIO, or they got moved in [under you], doesn't mean they can't do work," he says.

In fact, a smart CIO will recognize that some staff members have important institutional knowledge. In Quintanar's case, some of his customized clinical accounting applications use an older version of software, which Quintanar is upgrading. The hospital also uses legacy systems such as a materials management system for the emergency room. "To find somebody in the marketplace that has that skill that is specifically related to the way software is used in our hospital is very difficult," he says. The nearest qualified applicants probably live in Los Angeles, which is 80 miles south.

"The challenge is to find the right work for these people. What is it that makes them thrive, that gets them excited, that is going to turn them on and gets them to start producing? That's what I normally do with people: put them in the right place, see where they shine. I believe in giving them chances, coaching them and communicating with them."

There are rewards for doing this with tact and care: If a CIO can reassign an unhappy worker, the worker is more likely to transfer his institutional knowledge and will remain on staff as a sort of emeritus expert.

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What's the Problem?

For Quintanar, the first step in this process is keeping an open mind about troubled staffers, even when other managers say they should be fired. He recalls an incident more than 10 years ago, when he was a consultant at then-Price Waterhouse in Los Angeles. It started with a call from a young auditor in St. Louis who wanted to apply for an opening on Quintanar's IT consulting team.

Quintanar called the partner in charge of the applicant and got a stern warning. "He said, 'We're getting ready to can this guy. We can't work with him. He doesn't seem to get it.' I said, 'Oh, there's an opportunity. Transfer him to me.'"

As it turns out, like most new recruits at the big consultancies, the young man had been given tedious, unchallenging work as a kind of initiation test. His job was to sort and tag boxes of documents "so someone else could come over and do the smart work," Quintanar says. The dreariness of the assignment had crushed his spirit.

In Los Angeles, Quintanar gave the young consultant the more challenging task of working directly with a client as part of a team. The team helped midmarket companies set up accounting departments and review their infrastructure and platforms. Over time, Quintanar gradually increased the employee's responsibilities; within three months, the newcomer -- at the tender age of 24 -- was running the client's entire accounting team, which included all responsibility for hiring lower-level IT professionals to implement the accounting department's infrastructure and software. The client was so pleased he wanted to hire the young man (though the employee declined the offer). "All it took was for someone to give him a little bit, to empower him," Quintanar says.

In some cases, it's not so obvious that an employee has unused talents. Consider the unhappy desktop technician who came to Juliano's attention last year at Wine Enthusiast. Juliano was hearing complaints about the technician from internal customers. "I was getting calls saying, 'Could you not send him down? He's really dour,'" Juliano recalls.

Juliano likes to spend half an hour or so making the rounds of the office, talking with customers and staff alike. After hearing the complaint, he stopped by the technician's desk. "Is there anything bothering you? Is everything OK?" he asked. "My natural assumption was that something was difficult at home. I try to be bartenderish."

As it turns out, the technician was fuming over what he deemed to be a corporate injustice. In his mind, he had the skills to be a systems administrator. After all, he told Juliano, he knew how to configure Internet protocols. Why, then, was he just a technician? Didn't he deserve the systems administrator title and its higher salary?

As the two talked, Juliano pointed out there were a lot of things the technician didn't understand about the coveted job, like how to configure firewalls. After the conversation, Juliano arranged for the technician to enroll in three days of training a month. The employee could have requested the training but didn't, Juliano says, because he feared appearing unqualified for the systems administrator job after all.

After the technician began his training, internal customers noticed a difference in attitude. "They were complimenting me on his turnaround," Juliano says. Early this year, the man got what he wanted: a promotion to network systems administrator, at higher pay.

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A Clash of Characters

At first glance, some problem employees seem beyond rehabilitation. That's what Transwestern's Saah thought when he watched his extremely logical, rule-bound employee alienate some of the real estate company's star brokers by shooting down their requests. (Transwestern of Houston has annual revenue of about $170 million.)

Saah fought his instinct to fire her; instead he decided to learn more about his entire staff by inviting his personal career coach to assess employees with the Myers-Briggs Type Indicator. Many employers use this personality test to identify how employees analyze problems, make decisions and interact with other personality types.

After the staff took the test, the coach gave employees more information about their personality types. Saah was an extrovert and learned that his personality type is less suited to executing details and more to identifying solutions -- a common trait among CIOs and other senior managers. Not surprisingly, the staff member with whom he clashed was his polar opposite: While she often lacked the ability to see the big picture, she had a keen sense for the details and could execute in a careful, rule-bound way. And of course, she was not the only detail-oriented person on staff.

During a coaching session, as Saah's team discussed different approaches to problem solving, another seemingly inflexible staff member explained her preference for order. As she candidly told the group that day, she uses a grocery shopping system from which she does not deviate: She puts her grocery list in the same order in which store items are stocked. If she mistakenly passes an item on the list while shopping, she doesn't retrace her steps to get it from an aisle she's already passed; that's not part of her system. "People said, 'Are you serious?' She was very serious," Saah says.

Saah was already well aware of the drawbacks to such rigidity. For instance, the company's top real estate brokers complained that it was difficult to get the methodical grocery shopper to solve their technical problems. One vice president wanted his cell phone billed another way; his request didn't meet her parameters, so she turned him down. More recently, the marketing department requested a change in the content management software for the new corporate Web site. She agreed to research the solution but added that she had other priorities, which she proceeded to list.

The coach helped Saah see that this irksome rigidity often worked to his advantage when applied to the right situation. In fact, it's a good trait for software development, quality control and following corporate governance practices. After realizing this, Saah sat down individually with his more process-driven employees. "I love the way you impose order on this, this, this and this, and it serves us well," he recalls saying. But for meetings with customers, "it doesn't serve us well," he explained.

He explained the problem as a type of culture clash: "You've got the broker, who's very verbal, very conceptual and makes money by thinking out of the box. Then you have the people who succeed by maintaining the box. Put those two in a room without any instruction, and it can be a recipe for disaster."

Saah advised his more rigid staff members to keep an open mind when fielding customer requests and to suppress the urge to say no on the spot. That advice made a huge difference in the staff member he once thought he could not work with. Now, in customer meetings, she responds to requests by saying, "OK, we'll see what we can do," Saah says approvingly. "She has totally transformed her personality. It's been an incredible transformation over 18 months."

Of course, it's not realistic to think that every employee is capable of an incredible transformation. As Gartner's Walker notes, sometimes it makes more sense to cut losses and move on.

Wine Enthusiast's Juliano says in his experience, it is very difficult to rehabilitate employees who don't play well with others or who are insubordinate. He recalls the case of one star performer who doubled her personal productivity by demanding help and information from others while refusing to reciprocate. She was "killing the output" of other staffers, he says. When meetings, written warnings and coaching failed to help, he let her go. "It's amazing that you can have one person doing the work of two and taking down 20 other people," Juliano says.

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Cutting Your Losses

Some workers cause problems that not only sap morale but also open the company up to allegations of racial and sexual harassment. Quintanar recalls facing this problem at Antelope Valley Hospital, which has annual revenue of about $700 million. The problem stemmed from an employee who had an unstoppable habit of playing practical jokes on his co-workers.

For his first prank, the man bought a remote-controlled device that made farting sounds and hid it in a co-worker's office. "Every time there were two people in the room, he would push the button," Quintanar recalls. "No one knew where this thing was." He speculates that the prankster was moving the device to make it more difficult to find.

Eventually, Quintanar's staff found the device and linked it to the prankster. Quintanar told the employee he had to stop. Instead, the prankster took a new tack, which posed potential legal liabilities. He began using photo editing programs to paste his co-workers' faces into caricatures of people of different races and then emailed the result to the person. One staffer of Irish ancestry found his face pasted into a picture of a drunken Irishman. A staffer of Asian ancestry found her body pasted onto a picture of a person pulling a rickshaw. One of Asian Indian ancestry received a picture of himself in an American Indian headdress.

Each time, Quintanar ordered the prankster to stop, saying the photos were not funny and were in fact offensive. Some of the pranks' targets began complaining to human resources. Quintanar wrote the employee a formal letter, warning him his job was in danger. He advised the man to take advantage of the hospital's counseling services.

 

Instead of stopping, the prankster started a new trick: When he produced computer-generated billing or medicine administration reports for his co-workers, he added tiny print at the bottom of the digital copy of the report that made fun of a specific co-worker who was charged with printing the reports. The comments did not show up on the hard copy of the reports. In one case, he claimed to know the person's sexual preference.

It was too much, and Quintanar ultimately had to dismiss the man. Although everyone deserves a second chance, he says, "a lot of people can't be helped." As a manager, you can try to turn around a problem employee but at some point "you have to say, 'I'm sorry, you can't be helped -- at least not by me.'"

Although most staff is inherited, and it's impossible to predict what sorts of personnel problems a CIO will encounter, careful recruiting can reduce the odds of future problems.

Gartner's Walker recommends that CIOs carefully screen new employees by making sure the interview process addresses the applicant's work habits as well as his technology know-how. Specifically, CIOs should make sure potential hires share their ideas about issues like work hours, the amount of time that should be spent in the office, how to collaborate and how to handle disagreements. In addition to asking applicants directly, CIOs can find out about applicants' work habits during reference checks.

Better yet, try to hire through employee referrals. Employers generally have a good experience with these hires because a valued employee "senses that this person is going to fit in -- and that's almost half the battle," Walker says. "They know this person. They would not be likely to bring in someone they knew would not fit."

 

Joan Indiana Rigdon was a contributing writer for CIO Decisions. To comment on this story, email editor@ciodecisions.com.

This was first published in May 2007

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