Making Room for Improvement (5 min read)

Up or out. It’s an old strategy that may seem cutthroat to some. The concept being that anyone perceived as not worthy of promotion or advancement, after a certain period of time, isn’t worth keeping around, even in a “lesser” position. Those that miss the cut are subsequently let go and a new batch brought in only to face the same potential process of elimination. But loyalty can and does cut both ways. Providing an employee chance after chance with extra time and training can be rewarded with a solid team member. Then again, a lack of urgency around terminating underperforming individuals may also be rewarded with several time sucking “doctor appointments” and last minute call offs finally culminating with a less than ideal, one-week notice of resignation! 

It’s obvious that people are suited to different pursuits and trying to force a square production peg into a round sales role can lead to less income for both employer and employee. Sometimes, neither is brave enough to pull the plug on a bad situation. Although often challenging and almost always uncomfortable, a little pruning can actually be healthy and may clear the way for more productive team members to flourish. As it’s said, one bad apple can spoil the bunch. This analogy highlights the erosion that one individual can bring to an entire group of otherwise fantastic team members. Frankly, teams can quickly lose cohesion when faced with that one bad apple whose poor performance or bad attitude drags others down with them. In those cases, acting quickly and with foresight can stop the “rot” before it spreads. 

However, not all terminations are for just cause. Often, forces completely outside anyone’s direct control can lead to great team members being terminated through no fault of their own. The complex world surrounding employee terminations can make tough times even more difficult. Thus, to help hiring managers with any part of this, we would like to highlight below some general guidelines and tips to keep in mind, should any of the less-than-optimal market predictions come to fruition.

To help alleviate the need for a termination, first establish clear and concise metrics of performance and expectations. When expectations are clearly laid out and visible for all to see from the very beginning, then pointing out areas that require improvement typically comes as far less of a surprise. To be sure, everyone needs some time to get on their feet and find their groove in a new role. Thus, it is beneficial if a leader can model what “good” looks like to let employees know how much improvement is actually needed. When goals and expectations are missed, it’s important to document it and address it. Determining why those goals and expectations were not met, and how you can work with an employee to ensure they are not missed again should help avoid any future need for escalation. To build on this preventative concept a little more, it is also imperative to have adequate training systems in place to attempt to correct potential performance deficiencies if they do happen. If you do not have adequate training capabilities, then you may find yourself dealing with troublesome terminations far more often than absolutely necessary. Should the time come for you and an employee to involuntarily part ways, being able to provide a well-laid-out justification with supporting dates and supporting numbers can not only protect your company from erroneous prosecution, it can also provide the parting employee with insightful information that could help them avoid similar issues in the future…if they are willing to recognize that for what it is.

Speaking of will, a major concept to understand when considering the world of hiring and firing employees is appreciating the at-will-employment concept. Wikipedia describes it thusly “In United States labor law, at-will employment is an employer's ability to dismiss an employee for any reason (that is, without having to establish "just cause" for termination), and without warning, as long as the reason is not illegal (e.g. firing because of the employee's race, religion or sexuality).” This concept is often argued as being harsh against employees’ rights, but again, it can cut both ways. At-will-employment makes it easier to fire employees which in turn makes it easier to hire employees. The market is a fickle beast and business owners are risking their own capital betting that they can turn a profit. If adding additional workers means that they are then obligated to maintain those salaries and costs even if the market turns sour, it can be seen as a greater risk and therefore ventured into far more carefully. Part of at-will-employment, or lack thereof, is a basic truth of human nature, not everyone always gets along or fits in. 

Without at-will-employment, a business owner could be legally forced to continue employing, paying, and working with some individual, day in and day out, that they can barely tolerate. One of the most common and highest listed priorities shared by our clients looking to add talent in the Real Estate Settlement Services space is the understandable desire for company culture and personality fit. The idea that some people just don’t mesh with others should not be a major controversial statement, however, within the hiring and firing world it is often tied to racism, sexism, and the “old boys club” cultures that may exist at any one company. Thus, when terminating an at-will employee without cause simply because they are not a cultural or personality fit with your company, you must go out of your way to ensure there isn’t even a whiff of impropriety. If you find yourself terminating numerous employees for cultural fit, or you recognize a pattern to those that don’t fit in general, you may also need to reevaluate your company culture to ensure it is not problematic to begin with. In a 2021 interview, SHRM President and Chief Executive Officer Johnny C. Taylor, Jr., was asked about being fired for not being a cultural fit and he provides some great insights. He notes that “employees can and do choose to resign for any reason they see fit. Make no mistake, the employee and employer relationship can be as volatile or as harmonious as any relationship. But just because you may not be seen as a fit for one situation does not rule out the possibility that you may be the ideal fit for another.”

However, the pressures of personality and cultural conflicts may be slightly alleviated by the modern push toward remote employment, though remote employment can open a new can of worms when it comes to terminations. The classic surprise midafternoon Friday meeting in your supervisor’s office does not work when dealing with letting remote employees go as they can be halfway across the country. Also, the standard etiquette of a face-to-face firing is far more difficult to accomplish. Often, remote employees only connection with the mothership is virtual via computer networks. Cutting the cord to these connections must be done promptly and with couth in order to avoid potential security issues. This time sensitive split can require coordination across numerous different departments including IT and HR. Frankly, you probably don’t want them learning that they are being let go when their VPN disconnects, their phone quits working or their severance check hits their bank before the news is delivered. This happens more often than one might think. Thus, having an awkward phone call or Zoom meeting might seem less traditional than the respectful face-to-face meeting but it may be a necessity of the times. 

It’s no secret that a change has been felt in the economic winds and the prospects for a recession have become less of a question of “if and when” and more “how long.” Hiring and firing are two sides of the same coin. Just as we have previously espoused the virtues of strategic planning when it comes to adding talent, the same amount of planning and coordination should be applied when the time comes to reduce. The good times don’t last forever, neither shall the bad. Companies can come out the other side of downsizing leaner and with open space to slot in new talent (this is happening all over the place as we type this). To that end, as teams are honed, we suggest that you keep an eye to the future and have a plan to start adding this new talent to quickly take advantage when opportunity presents itself. Often, the pressure provided by these more trying times can make it far easier to identify the real superstars and what business lines are the real money makers. When times are good, gathering low hanging fruit is easy.  It’s when pickings get slim that you see who is really willing and able to climb and eat.

Should you have any questions, please feel free to visit our website or call (866)-688-7199 and one of our team members will be happy to hear your thoughts.

Anderson|Biro is a full-service, Executive Search firm dedicated to the Financial Services sector around the country. We source talent to service all aspects of the Land Title Insurance, Settlement, and Appraisal industries. We offer quality solutions for clients in these primary fields and beyond. Our candidates are screened for specific industry experience, outstanding track records, and values that complement your mission and culture. We have also built successful partnerships with leading Homebuilders, iBuyers, Fintech, Servicers, Law Firms, Real Estate Brokerages, and Lenders with direct or indirect stakes around the real estate closing table.