Most managers know the time to hire - new contracts, expansion, budgets, additional reporting requirements and voluntary turnover typically drive hiring needs. However, determining the time to fire can be a little murkier. While there are no absolutes, below are some general rules and red flags which may indicate it is time to make a change. Each point is accompanied by a supporting quote from a key figure in American history, do you recognize the author?

I have always found that mercy bears richer fruits than strict justice. Overachievers typically have personalities that lead them to extreme accomplishment, but the same factors that drive success can also result in major setbacks. Couple that with the fact that the best employees spend the majority of their time on the job, so the law of averages indicates they will make mistakes along the way. In evaluating disciplinary actions, consider if it is an isolated incident, is it reflective of overall performance, how will the employee recover and what is the long-term potential of the employee. If it is not indicative of a trend, giving the employee a harsh disciplinary action and an opportunity to overcome the mistake may instill even stronger loyalty and motivation than the good employee already exhibited.

Most folks are as happy as they make up their minds to be. Most employees go through peaks and valleys of motivation, but the best employees recognize the valleys and are quick to adjust their attitude. However, some great employees' attitude may continually decline in the face of evolving corporate structure or changing responsibility. For example, there was a controller of a $120 million company that grew to a $1 billion company through acquisitions. He was a star employee at the smaller company, but consistently resisted changes required of a larger organization. The new company gave him a larger salary, stock, and increased responsibility, but he felt he should have been offered a higher position for which he was clearly not qualified. The company was extremely accommodating as his talent was an asset to the organization, but finally the decision was made to part ways. The company realized there was nothing that could be done to erase the grudge the employee was carrying. As a result, the company hired a motivated professional that was excited about joining the company, and the outgoing employee took a controller role at a $250 million company at a slightly lower salary and is doing very well. Both the company and the employee had a lot to offer, but for each to reach their potential it was time to make a change.

Let's have faith that right makes might; and in that faith let us, to the end, dare to do our duty as we understand it. In most situations, once it is clear that a change needs to be made, make it. While it may seem it is more disruptive to terminate without a replacement, it is not true for three reasons. Number one, the employee typically sees the change coming and will focus efforts on the next opportunity and in the worst situations, will take or sabotage valuable company information. The second reason is the effect a 'lame duck' employee has on morale. Other employees see the bad seed should go and may spend half there time gossiping about when the employee will go and the other half gossiping about why he is still on board. Finally, having the spot vacant brings attention to hiring someone in critical positions and bad employees don't linger. If it is critical to have someone available in this position, it is more effective to bring in a project professional focused exclusively on critical projects to allow the company to focus on finding the ideal permanent candidate.

He can compress the most words into the smallest ideas of any man I ever met. The success of many companies today is dependent on the performance of key mangers at geographically dispersed location. Managers with multiple locations may find themselves unable to devote adequate time to any individual location. It is easy for today's managers to rely on conversations with site management to gauge the health of a location. The danger of this approach is that expectations are not clearly defined and developing problems can be covered up through general conversations with site management. It is more effective to take the time to identify critical success factors for a location and set quantifiable objectives to be achieved over a specified period. In the limited time corporate management has to have conversations with site locations, the conversation can be driven by expectation sheets and site locations can be held accountable. This gives management the ability to crave quantifiable successes and document failures, both of which give the manager the ability to make quick, informed decisions.

I do not think much of a man who is not wiser today than he was yesterday. For the first time in the last ten years, in many fields there is more available talent than jobs. This gives companies a unique opportunity to evaluate key positions to determine if it is fielding a championship team. Companies want to know their team consists of industry, technology, social, and functional leaders. Companies that have experienced rapid growth, consolidation, a radically different marketplace, a need for systems advancement or a shift in strategic direction are all candidates for strategic talent acquisition. In this analysis, key hires and reallocation of existing resources may be a better option than termination of experienced employees.

The best corporations recognize the high cost of turnover and scrutinize terminations to see if there are any lessons to learn. Was there a breakdown in the hiring process? Was the person adequately trained? Were expectations clearly defined? Companies use exit interviews with terminated employees and affected parties to gather information to make better hiring, training and management decisions. Turnover situations require tough and fair management. If you see your task as difficult, try the guy whose quotes are listed above. Management requires consistent direction in the most extreme circumstances, and Abraham Lincoln, the author of the quotes above, defined the role of management well when he said 'I desire so to conduct the affairs of this administration that if at the end... I have lost every other friend on earth, I shall at least have one friend left, and that friend shall be down inside of me.'

If you are faced with questions regarding staff turnover, please don't hesitate to contact the professionals at Vaco Financial, LLC.

Over the last couple of years, the uncertain economy has not been conducive to employees changing jobs. As such, employees may be staying with the sure thing, regardless of actual job satisfaction. With experts predicting a turn in the economy by Q1 2003, it is a good time to assess how well your company will retain top talent when opportunities return. While distributing truckloads of cash, months of vacations, and free usage of the corporate jets are guaranteed to work, these options may be a little more cost-effective.

In non-commission based compensation packages, it is up to management to find creative ways to reward extra effort. Effective reward plans can be centered around continuous improvement, beating defined deadlines, error free work, positive surveys from internal and external clients, or outstanding motivation. Reward programs can be ongoing or campaign driven and rewards range from award certificates to extra time off to monetary prizes. According to most work place analysts, it is the recognition, not the reward that motivates employees.

If possible, at least 10% of all employee income should be incentive driven. A common complaint in non-direct revenue producing positions is that the employee has very little opportunity to maximize personal income. Companies that have successfully tied compensation to individual and department results have seen quantifiable improvements in productivity. The biggest reason companies give for weighting bonuses heavily towards individual and department production is that individuals can more clearly link effort and results individually or as a department that on the entire company. For example, a controller may feel she has minimal influence over how many widgets the company sells, but will feel she and her team have absolute control over how quickly monthly and yearend closes are complete. Other key measurement factors are accuracy of close, number of audit adjustments, employee retention, continuous improvement suggestions, and survey results from other departments. This type of incentive bonus contributes to the success of the entire team, but is directly tied to actions controlled by the employee.

Employees are most effective when they understand how they are perceived by management and the goals toward which they are working. Studies show quarterly performance reviews are most effective and should address:
Consistent dialogue with employees will keep them focused on individual success factors, will give them opportunity to be heard, and will provide a record of performance to be used in promotion or termination decisions.

In large corporate environments, it is easy for an employee to feel disconnected from the company's vision and direction. To combat this, many companies will find ways to challenge employees to contribute to the success of the company in creative ways. A few examples include:
Employees that feel they are connected are contributing to achieving the goals of the company will be more satisfied with their jobs and less likely to distribute their resume.

Busy seasons, transition periods, turnover and system implementations can put additional pressure on employees and drive them to seek other opportunities that provide a more tolerable work-life balance. While most employees expect periods of excessive workloads, stretching those periods longer and longer negatively impacts the morale of employees and reduce the quality of their work. Also, studies show that employees reach a point of diminishing returns when working over ten hours a day. Management that invests in project professionals to cover the additional workload benefits from a happier, more effective workforce and is more likely to retain key employees.

Periodic team building exercises and contests can contribute to an esprit-de-corps that will help retain and attract the best employees. Effective activities and initiatives include: There are thousands of team building activities and the best fit for your organization will depend on the players on the team. To maximize effectiveness, present options to your teams and let them vote on the best plan of action. As with most team building exercises, expect moans and groans in the beginning, then see the motivation surge once everyone is fully engaged. The number one intangible most candidate's desire in a company is a motivating and team oriented environment.

Sharing the cost of tuition, certification and continuing education demonstrates a Company wants to develop its employees. It also gives companies an opportunity to celebrate individual employee success when degrees and certifications are earned.

This does not work in all situations, but when appropriate, the retention and effect on employee morale is dramatic. Changing family dynamics, spouse work schedules, school hours and changing priorities can all present situations where a flexible solution is required. Creative solutions can mean the difference between keeping a star employee and losing her to a competitor. If you decide to offer this benefit, however, it is critical to take time to develop a written plan of action and list of responsibilities.

Whether your company is well-established or a start-up with an uncertain future, employees need to feel connected to the company direction. Did you just land a major contract? Did the last round of funding secure operations for the next 12 months? Celebrate with everyone from the shipping clerk to the CEO to let everyone know they were part of the success. On the other side of the coin, is the future uncertain? Will you be laying off 10% of the work force over the next six months? Tactful communication of the position of the company will show your employees that management is committed to delivering an open and honest company message. That message will reduce the time spent around the water cooler and increase the effort employees commit to the success of the company.

Focusing on any of the above retention strategies can save companies thousands of dollars in turnover cost and facilitate a more livable work environment. If you are evaluating your employee retention plans and would like to hear about initiatives implemented at successful local companies, please call the professionals at Vaco Financial.