What happens when you hire the wrong person?

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When a new hire fails to meet expectations, business owners should carefully consider how their actions could financially or legally impact their company.
Men shaking hands in an office amongst a group.

Have you ever hired a promising new employee only to realize that they make a disappointing addition to your team? Perhaps their work ethic is lacking or they aren’t as qualified for the job as the hiring process made it seem. And sometimes, new workers simply don’t fit into your work culture. You can only get to know a person so much during an interview, after all.

So what happens when the new hire starts to disrupt your work environment? This choice might not be as easy as it seems. There are lots of factors to consider, such as whether or not your actions could financially or legally impact your business. For example, you must always consider whether your dealings with employees could possibly read as discriminatory – either to the new hire or current employees.

Below we take a closer look at your options when dealing with a disappointing new hire and discuss some tips for avoiding employment practices lawsuits.

Step 1: Discuss the issue with the employee

Whenever an issue arises with an employee – whether it’s poor performance or the fact that she’s been making racially inappropriate comments to her colleagues – employers should, first and foremost, always discuss the issue with the employee. Here’s why:

It might solve the problem
Most employees don’t want to rain on the company parade. If you mention, for example, that some colleagues have expressed discomfort with regard to the employee’s racially charged jokes, they might very well be mortified and end the behavior right away. Problem solved, and you won’t have to worry about the issue escalating into a workplace harassment charge.

It thwarts legal trouble
If this conversation doesn’t resolve the issue, and your employee isn’t happy about the decision you made, for example, to fire her later, this meeting will make it difficult for the employee to claim foul play. If you have a meeting to discuss her poor job performance, then there is proof that you informed her of the issue, and she did not take steps to improve. If the fired employee claims the decision was based on, say, her age, you can point to this meeting as justification for your reasoning.

Of course, employers still have to be careful about how they conduct employee performance reviews, especially if the employee in question is a member of a protected class.

Here are a few tips to help you avoid legal trouble:

Conduct regular performance reviews for new hires
The biggest way to avoid claims of employee discrimination is to treat all of your employees the same – even when it comes to performance reviews. Before there is an issue, establish a policy that states every new hire will have a performance meeting with you after three months. This gives you a chance to praise all new hires for their good work and address any issues. If your performance review seems sudden, the employee could suspect the criticism is actually rooted in discriminatory reasons, especially if they are a different religion, female, older than 40, disabled, or a minority. 

Prepare for the discussion
Never go into an employee meeting without your notes. You want to stick to the issue at hand, and you don’t want to mince words. Be clear about 1) your expectations, 2) when the issue began, and 3) how the employee might resolve the issue. Be sure to listen to what your employee has to say. Their response will help determine your next course of action, if necessary. Did the employee offer excuses? Or did they take responsibility and make their own suggestions for improvement?

Document the meeting
This should happen in two ways. First, you should have another manager (or HR rep) present during the meeting. That way, there is a witness to the discussion if questions arise later. Second, you should have a document where you record 1) when the meeting took place, 2) who was present, 3) what was discussed in the meeting, and 4) the action the employee agrees to take in the future. You may even have the employee sign the document. Keep this in with your other employee records. This type of policy works on the more cheery side of employee relations as well. When you record meetings about good job performance, you’ll have good evidence to support your promotion decisions, etc.

Hopefully, a little chat is all you need. But what happens when the issue remains unresolved?

Step 2: Decide to train / relocate your employee

As a small business owner, you must consider how your employment decisions affect your bottom line. One the one hand, firing and hiring a new employee can cost a lot of time and money. That’s why, if your employee still shows promise, you may decide to relocate the employee to a different position or to set her up with a mentor or more robust training. Here are a few things to consider:

Can this employee succeed? 
Sometimes it’s a simple issue of giving the employee the resources they need to thrive in a new environment. Again, your initial meeting may reveal that there are steps your business can take to accommodate your employee. For example, let’s say that your employee has a minor condition that makes it difficult for her to focus in your open-concept workspace. It’s showing in her work performance, but she was hesitant to bring the issue up with management. You find her a quieter area of the office to work in, and her performance improves drastically. Plus, you avoid any claims that your business did not reasonably accommodate her disability.

Is this employee willing to improve? 
Let’s say that the candidate you pick is simply ill-suited for the job. It happens. But maybe he has experience that's useful elsewhere in the business. Or maybe a bit of training will help this employee get back on track. If you feel confident about an employee’s promise, you must consider if it’s worth the expense to train them. However, be aware of how relocating an employee or training an employee may look to your other workers. Perhaps you move the new hire from copywriting to a web development position. Another copywriter has been itching to switch departments, and feels she’s being passed up because of her gender. That’s why it’s important to…

Always document your reasoning
If there is a good reason (and there should be) for moving the new hire to IT when you know a current copywriter is interested and qualified for the job, document your rationale, and make sure it’s based on the employee’s qualifications.

But sometimes, the employee is simply a rotten egg. No amount of training or repositioning will do. That’s when it’s time to move on to the next step.

Step 3: Decide to terminate your new employee

It’s just not working out, and you’ve decided to cut your new hire loose. When you fire at-will employees, most states do not require you to provide reasoning. Your arrangement is such that either party, at any time, can terminate the relationship.

The risk here is that the fired employee may suspect the dismissal was based on discriminatory grounds. And if your employee files a wrongful termination lawsuit against your business, you will have to justify your reasoning.

Luckily, you probably have all the evidence you need from your initial interview. And the other employment records you keep will bolster your venture’s history of fair and equal business practices. 

Unfortunately, employment lawsuits do arise, even when employers take steps to avoid them. That’s why employment practices liability insurance was designed to help you shoulder the legal expenses. 

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