Problem employees quietly drain focus, money, and momentum—address them early.

Some weeks have themes. This week it’s million dollar employees.

Not employees who earn a million. Not employees who generate a million in revenue.

This week was about employees who cost their companies a million or more. Always a big deal, but especially so in small and medium sized business.

These aren’t just “dinging the bottom line” numbers. These employees hurt the businesses. It wasn’t just the owners who felt it. The teams or even the entire company feels the inability to bring on needed staff, to buy equipment, to provide bonuses, etc. Sometimes this impacts reputation or liability. Vendors or partners feel it. Customers feel it.

This week, a number of clients have come to me with, “What do I do about (Tom or Sarah)?”
As I work with them to dig into what is going on with Tom or Sarah, common patterns emerge:

1. This is not the first time there has been an issue with this person.
2. They don’t seem to respond (or don’t respond for long) to mentoring, guidance, correction or even disciplinary action.
3. Most are nice people. A few are clearly jerks.
4. Their performance cost their companies a million or more dollars. (This is often not even recognized initially.)

The Toms and Sarahs tend to fall into one of three buckets:

• Kind, well-liked people who can’t deliver in critical areas even with support.
• High performers with toxic behaviors. Toxic meaning behaviors that poison team health or morale.
• Employees with both poor performance and poor attitude – but are viewed as valuable or even indispensable because of relational dynamics, institutional or industry knowledge, etc.

So what do you do? Answer: Make a decision and act quickly and decisively.

Here’s a tool that helps.

The Four Filters For Quickly Addressing Employees With Chronic (Or Acute) Problems

This is a decision-making framework that is simple, clear and usable. The risk that it runs is over-simplification. I recognize that there are unique situations.

These filters are principles. Not rigid rules. They are designed to help you quickly find direction and act. Every business and situation has unique circumstances but these principles will help guide you through most.

The tendency with problem employees is that most leaders avoid being decisive and timely to address them. I have had a few clients who tend towards being rigid and defaulting toward “just fire them.” Also not the right approach. Hopefully this article helps speed up the first and slow down the second.

Filter One: Red Lines: Ethics, Safety, or Professional Standards?

Do they regularly cozy up to or even cross red lines in terms of ethics, safety or professional standards? Or was there a major violation due to blatant intent, negligence or foolishness?

• If yes → decision should be immediate: In most cases, they should be let go. In some cases, moved to a position where they are unable to make decisions of that nature. But generally, they are damaging to others and not a good fit.
• If no → move to next filter.

For many leaders, problem employees drain focus that should be spent on growth.

Filter Two: Leadership Ownership: Did I contribute to this?

Leaders create environments that make it easier or more difficult for employees to succeed. Common examples include lack of clarity about expectations (including values and vision), poorly defined roles and responsibilities, inconsistent accountability practices, or weak hiring and placement decisions. Some leaders hope that employees will guess at their dissatisfaction but won’t tell the employee that there is a problem.

These are leadership issues. Not employee issues.

• If yes → fix my part.
• If no → move to next filter.

Left unaddressed, problem employees quietly multiply costs across the business.

Filter Three: Alignment: Do they live the values and support the vision?

Do their decisions and behaviors consistently reflect your organizational values and their profession’s values? Does their work performance meaningfully contribute towards accomplishing the vision?

• If yes to both → move to next filter.
• If no about either → They probably aren’t a fit. While not impossible, it is difficult to take people who are not aligned with clearly defined values and vision and bring them into alignment.

Clear expectations and coaching are essential—yet some problem employees resist both.

Filter Four: Trajectory: Is there rapid, visible, sustainable improvement?

Employees who honestly try can almost always be grown or put into a position that is a good fit. Employees who don’t try, can’t remember to try or can’t figure it out are unlikely to change.

Expect immediate signals of change (attitude, effort, responsiveness) within days. Skills can take longer, but the trajectory should be unmistakable. Use 90-day plans to test sustainability – not to wait for evidence of change.

• If yes → keep investing.
• If no → waiting is unlikely to change the trajectory.

Strong cultures surface problem employees faster and make decisions easier.

Your Next Steps

These filters aren’t meant to bog you down in analysis. If you’ve done your work as a leader, the first three filters should take seconds to think through. If you missed something as a leader – correct it quickly and get things going.

The only one that always requires some time is Trajectory. But even then, it doesn’t require as much time as most leaders give it. You should see immediate signals of growth. If you don’t or the signal is ambiguous – accept it for what that tells you.

The typical 90-day performance improvement plan should be primarily to test sustainability. It’s not a deadline by which you should begin to see growth.

Final thought: Addressing the problem employee isn’t primarily about them. It’s about protecting your team, your customers and your partners. They are paying a price. You can change that.

Take good care,

Christian