Do not Fire the Bottom 10%, Here’s why (The Leadership Playbook)

A young entrepreneur asked me what I thought about the idea that you should fire the bottom 10 percent of employees each year. You should not fire the bottom 10 percent of employees in your ranking each year.

• If an employee is in the bottom 10 percent in employee rankings at the end of the year, something should have been done long before that time.

These is no reason to allow an employee to struggle until you notice it’s the start of another trip around the sun. It’s unfair to the employee to allow them to struggle or fail for a long period of time without intervening. There is no reason to be unhappy with an employee’s performance for long periods of time. You also shouldn’t let them be unhappy with their performance, nor should you allow them to believe they are doing okay when they aren’t.

Your intervention needs to start as soon as you notice an employee is struggling.

• Hanging onto employees that aren’t succeeding is expensive.

If an employee is not producing the outcomes they were hired to deliver, you are going without those outcomes. In sales, this means you aren’t winning the new opportunities you need to grow. In operational roles, it means you are failing your clients—and likely failing the rest of your team. You are failing, because you are allowing a struggling employee to fail.

There is no reason to forego the outcomes you need while waiting for an artificial date. Time is the one resource you can never get more of, and when it’s gone, it’s gone. You have to produce results you need now.

You need to help your employee improve, or you need to do something else.

• If the bottom 10 percent aren’t performing, there are three choices available to you, two of them that don’t require firing them.

You can retrain employees. You can work with them to give them every opportunity to succeed. This includes coaching them and engaging with them at a deeper level and more frequently. If you haven’t done everything you can to help a struggling employee to succeed, it is unfair to fire them.

You can reassign employees by moving them into roles where they are likely to have a better opportunity to succeed. There are a lot of people who want to work in sales because the want the autonomy and the income who don’t do well for any number of reasons. These same people often do well in other roles, roles that don’t require the same mindsets or skills as sales.

Replacing an employee is expensive. Replacing them may not have been necessary if someone intervened early enough to help a struggling do better. You should never be clinical or casual about firing a person, and you should do everything in your power to keep from having to do so.

You are being watched. If you fire people without making an effort to help them, you are sending a message to the rest of your employees that you care only about the outcomes you need and that they are simply a means to an end.