During their heyday, Enron had a policy of firing 25% of their workforce every year. Supervisors completed annual evaluations, employees were ranked, and those staff members at the bottom were asked to leave. The corporate philosophy was that if the poorest performers were replaced by others more capable, over time the organization would be more successful.
We are not proposing that nonprofits enlist these rank and slash methods (after all, remember what happened to Enron) but we are suggesting that organizations become tougher about evaluating employees and that poor performers be let go.
During this time of economic uncertainty and belt-tightening, nonprofits do not have the luxury of keeping marginal performers on the payroll. Nonprofits should be mission driven. If an employee is providing little return on the investment or in some cases a negative return, it means that resources are being diverted from fulfilling the mission. This is not a good use of a nonprofit’s resources.
Board and staff are equally guilty of tolerating poor performance and failing to act on a timely basis. Over the past year, we have seen far too many examples:
- an employee who called in sick, on average, once every two weeks (but when she shows up, she does such a good job!);
- an employee who lied on her timesheet about her absence (another employee saw her that day and knew that she wasn’t sick) and then screamed at her supervisor when confronted with the evidence;
- an employee who repeatedly withheld information from other employees and then berated them for failing to do their job when the only way they could do their job was if they had the information the employee was withholding;
- an executive director who repeatedly failed to provide the board with financial statements (for over a year) and was not terminated until the IRS was knocking on the organization’s door;
- an employee who was hired to do a particular job for which she did not have the background or skills and, after given extensive training, was still unable to perform the job but her supervisor felt too guilty about hiring her to terminate her; and
- an employee who consistently accused his supervisor of skirting the law (she was not) and handling matters in an unethical manner (she was not) and broadcasting his views to everyone on the staff.
Nonprofits also need to keep in mind that they are spending taxpayers’ or donors’ money to provide a service. If one of your donors walked into your office and witnessed some of the behavior described above, do you think they would write your organization another check?
In this climate, where raising money is tougher than ever, nonprofits need to make the most of every dollar that comes in the door. From a staffing perspective that means nonprofits need to be more business-like. Businesses make personnel decisions to remain true to their mission. And businesses have a clear mission—increase shareholder value. If lay-offs are required, a business acts expeditiously.
Nonprofits need to make personnel decisions with the same commitment to mission. If the board is reviewing the performance of an Executive Director or if a supervisor is reviewing an employee, the question to ask is “What is this person’s impact on the mission?” The answer may mean that it time for the employee to go.