Six ways to save on dud employees
By Howard Levitt
Underperforming employees cost companies money, not just in lost productivity but in the many ways the employer squanders money while skirting the act of firing them. Management is generally under the misapprehension that they are fulfilling legal obligations to these employees. Here are some of the biggest wastes.
Using lawyers for workplace investigations
The law is straightforward and provides no special skillset for conducting investigations. Many consultants will perform the exercises equally well at a fraction of the cost. The vast majority of investigations can properly be — and should be — conducted in-house. My recommendation for large clients is to certify one or more in-house investigators.
I have seen too many cases where legal fees dramatically exceed what it would have cost to discharge the employee with full severance. That approach is particularly rampant in the public sector, where appearance and form trump economy.
If an investigation finds no cause for discharge, you are no further ahead. And if it finds there is cause, not only will that finding not bind a judge but the judge will not even permit the investigator to testify to that. After all, the court’s review at the trial is the only “investigation” that matters. Finally, the investigator and the law firm will be conflicted out if there is a trial, and you will have to educate new counsel all over again.
Not terminating poor performers
A weak performer, once trained, seldom substantially improves. But, faced with the cost of severance or the belief that they have a duty to work with the employee over an extended period before firing them, many employers permit underperformers to remain for years. It would be much less expensive to dismiss them with severance early on. The company won’t suffer from their further poor work product, and their continued presence won’t undermine a culture of excellence.
Large lump-sum severance payments
As long as employment standards minimums have been satisfied, employees will be compensated by a court only for their length of unemployment or any difference in income after re-employment. That being the case, unless there is a hefty discount offered in exchange for the employee receiving the monies immediately, it makes little sense for employers to pay a lump-sum amount upfront.
Never considering working notice
Working notice (i.e. advance notice of the termination date) can be very problematic. Employees having to work out their severance pay can be demotivating — or worse. It can lead to risk of confidentiality breaches and even sabotage. Other employees’ morale can also be negatively impacted.
But, some employees would prefer to create the illusion that they are employed while conducting their job search. Employers should consider giving working notice to those who want it, given that there’s paid labour in return for severance and they need not worry about paying for a replacement while the notice is ongoing.
Not challenging suspicious absenteeism
Many employers are so concerned about human rights claims that they permit employees to regularly absent themselves, alleging illness, when it is obvious they are not ill at all (for example, by routinely extending weekends or vacations or claiming illness after being denied a leave for that same period).
It is unnecessary to be that cautious. Courts and arbitrators are alive to both sick leave abuse and meaningless doctors’ notes. It is entirely permissible to require employees to provide medical notes for the days they purport to be ill, delineating their limitations, and often even requiring them see the employer’s doctor for validation. If you don’t, the other employees who are still at work may quickly start copying their habits.