Workplace: Dealing with Mediocre Employees

If every employee fit the description of superstar or slacker, managing human resources would hardly be work at all. The top performers would get rewarded with opportunity and better pay. Their deadweight peers would be readily dismissed. Yet, all too often, physician practice leaders are forced to contend with members of the staff who fall somewhere in between - those who contribute little to the team but give no overt reason to let them go. Indeed, mediocre workers present a challenge all their own.

“It’s more difficult when you’re dealing with average employees because you keep thinking there’s potential for them to be greater,” says Judy Capko, owner of medical practice consulting firm Capko & Co. in Thousand Oaks, Calif. “It’s in your best interest and part of the psychology of a manager to want to save that situation.”

Second-rate employees come in many shapes and sizes. Some start off with a poor work ethic. Others lose their motivation along the way. And still others are unable to keep pace with their coworkers no matter how hard they try. Whatever the underlying cause, each requires disproportionate supervision, which costs your practice money.

Indeed, business consultants have long linked substandard employees with higher rates of absenteeism and tardiness, greater use of healthcare benefits, and lower productivity.

Good work adds up

A 2006/2007 WorkUSA Survey Report by Watson Wyatt global consulting firm in Washington, D.C., shows employee engagement (commitment to the company’s success) is associated with a 1.9 percent increase in revenue per employee. The typical employee in the study worked at a firm where productivity equaled roughly $250,000 per employee, meaning that a significant improvement in engagement was associated with an increase in revenue (productivity) of $4,674. For a typical S&P 500 organization, which employs about 20,000 people, that represents an increase in revenue of $93.5 million.

Physician practices are playing with smaller numbers, of course, but because there are fewer employees the impact of a single bad hire has an even greater relative effect on productivity, says John Sullivan, head of the Human Resource Management College of Business for San Francisco State University and author of “Increasing Productivity, The World-Class Way.”

“In a small business with 10 employees, each employee represents 10 percent of productivity,” he says. “Bad or mediocre employees are more visible. They can really hurt you.”

There is also, of course, the cost of lost opportunities to consider. Underperforming employees require more handholding, taking time away from otherwise productive activities like implementing cost control programs. A bad hire also means that a more qualified worker who would produce a higher return on investment cannot fill that position. Then there’s the multiplier effect. “Substandard employees penetrate throughout the organization, setting a tone for mediocrity that extends beyond one employee,” says Capko. “It’s very, very contagious.”

Who is accountable?

In some cases, physician owners and administrators can improve internal processes or provide new tools to help such workers elevate their game. But Tim Connor, a motivational speaker in Charlotte, N.C., and author of “81 Management Challenges Smart Managers Face,” says employers should first look to themselves to determine whether they may be partly to blame. “The first thing a manager needs to do is look in the mirror and ask themselves what in their attitudes or management styles could be contributing to this behavior,” he says. “A lot of the behavior problems employees have are because of direct or indirect reward systems in place that encourage or tolerate that behavior.”

If an employee walks in 10 minutes late, for example, and the manager says nothing, that action (or lack thereof) sends a message that tardiness is acceptable. Worse, it fuels resentment among the more motivated workers who show up on time.

Capko agrees, noting failure to provide a positive culture in which all employees are encouraged to do their best will ultimately result in higher turnover of your top performers, leaving you with a growing percentage of mediocre workers who can’t find other jobs: “You have to ask yourself, ‘Are we setting an environment that acknowledges a job well done and holds people accountable for substandard performance?”

According to Connor, managers often fail to appreciate the difference between training and coaching. “Training is when you teach people what to do,” he says. “Coaching is catching them doing it right and reinforcing that behavior or catching them doing it wrong and correcting that behavior.”

When mistakes do happen, says Sullivan, immediately take that employee aside and explain to them what happened, how it should have been done, and what the consequences of their actions are. “Just talk to them so they understand that when this happens the practice loses patients or revenue,” he says. “Start with educating them. They may not realize the impact of good service or accurate work.”

Say something

Poor communication is another common problem that contributes to lower productivity. Connor notes most businesses suffer from corporate disconnect. Upper management is focused on large-scale, long-term goals, while the underlings are focused on the daily minutiae of keeping the office afloat. “Maybe the problem is that the employees don’t see the link between what their job is and the overall direction of the organization,” he says. “How can they understand how important their role is unless you’ve told them?”

Finally, consider that you as a manger may not be giving your most problematic employees the support they need to succeed. While most employers believe money is the most compelling motivator, Connor says the best way to turn underperformers into workhorses is to make your staff feel valued. Keep in mind, too, that some employees need verbal praise and pats on the back more often than others. “The number one thing employees go to work wanting every day is validation,” says Connor. “Everyday they ask themselves, ‘Do I fit in here? Do I belong?’”

Simply sending out group e-mails with kudos for a job well done, especially those that praise individual workers, can have a major impact on workplace morale. “Make sure that any criticism you give is done in private and that accolades are done in public,” says Capko. “Make sure your compliments are overheard by others, but be sincere.”

Lighting the fire

Once you’ve addressed your role in the problem, it’s time to implement policies that will help mediocre workers step up for the greater good of the practice. To that end, you can never underestimate the power of positive peer pressure. “Use the group to encourage that employee to change their behavior,” says Capko. “Peers can have a great influence. If everyone else on the team shows up on time with a good attitude and you don’t, it makes you look at yourself a little harder.”

At the same time, it’s important to call substandard employees into your office early on to discuss their performance. “You have to find out why they’re mediocre,” says Sullivan. “Did they lose their motivation? Is it a personality problem with another coworker? Do they not have the right skills or tools?”

Ask, too, what you as the employer can do to make their job more satisfying and more productive. “Ask them what frustrates them and what motivates them and what they see as the barriers to doing their job,” suggests Sullivan.

Remember, too, to be direct. Instead of telling employees you’d like them to work harder, give them specific performance goals. “Tell him you want him to produce 20 percent more, and if he says he can’t, ask why not,” says Sullivan. “It’s not always a matter of motivation. Sometimes it’s the processes that are in place and you might be able to change that process.”

Help them grow

It’s equally important to show your employees you’re willing to invest in their careers - if they return the favor. For those you sense have more to offer, give them the chance to flex their professional muscle by granting them new responsibilities, one small step at a time. Empowered by opportunity, they might just rise to the occasion.

Finally, suggests Sullivan, find out what books, Web sites, or trade publications help your best employees sharpen their competitive edge, and pass that information along to those who need it most. “Other people in your company can help those employees learn,” says Sullivan. “If you have multiple locations, be sure to share best practices for running each department with each other, too.”

No matter how much time and effort you invest in sub-par employees, of course, the ultimate decision to engage must come from within the employee himself. Some will simply never be the super producers you desire. “There are those employees who are never going to be part of the team, those who feel the company owes them something, and it’s their decision as to whether they want to change,” says Capko.

Knowing when to recognize a bad hire for what it is, she notes, is sometimes the most cost-effective solution. It all comes down to value. “You start spending 80 percent of your time with 20 percent of the people who don’t deserve your time,” says Capko. “At some point, you have to ask yourself if you’re constantly trying to correct behavior in people who have little value to the organization.”

Sullivan agrees. “Managers are always reluctant to get rid of an employee, but mediocre employees take a lot more time, coaching, and discipline,” he says. “Think about what you could do if you had someone who wasn’t high maintenance, someone who came up with good ideas.”

That said, however, showing employees the door is not as easy as it once was. An increasingly litigious work force makes it critical that managers create a written paper trail of warnings and examples of mistakes they have made, says Shay Hable, a labor and employment attorney for Powell Goldstein LLP in Atlanta, who works with physician practices.

“You don’t have to have a written form every time they do something wrong, just a trail of e-mails saying, ‘Hi, here’s what we talked about in our meeting today and here’s what I’d like you to focus on,’” she says. “I like to see several rounds of informal discussion and then maybe a performance review or action plan to improve performance.”

Hable notes it’s the mediocre employees who sue most often for wrongful termination. “Those are the ones who cause the most problems because often you let them stay on for 15 years trying to coach them along and then when you eventually let them go it looks bad to a judge or jury,” she said. “If they were so bad, the jury might think, why did you let them stick around for 15 years?”

While it may be technically true that employers can fire anyone they want at any time, Hable notes that’s no defense in a court of law. “You need to have a thoughtful process in place as to how you handled this person,” she said. “Before you fire anyone, look at it as an outside third party would and ask yourself if that employee has been given a fair shake.”

Worth the effort

Mediocre employees may not be unique to physician practices, but they do present a greater threat to small office settings where each employee has a more profound effect on productivity, and where coworkers tend to model their behavior on the weakest link. As such, managers must become more proactive in bringing poor performers up to speed - and learn when to let go when it’s not working out.

“Everyone’s eyes are on you to set the tone for the entire practice,” says Capko. “You can’t change their values or ethics about work, but you can try to influence their behavior.” At the end of the day, you may log more losses than wins, but it’s the ones you convert that make it all worthwhile. “It’s a struggle dealing with mediocre workers, but you will have those saves here and there.”

Shelly K. Schwartz is a freelance writer in Maplewood, N.J., who has covered personal finance, technology, and healthcare for 12 years. Her work has appeared on CNNMoney.com, Bankrate.com, and Healthy Family magazine. She can be reached via editor@physicianspractice.com.

This article originally appeared in the October 2007 issue of Physicians Practice.