National Clothesline

Too often, companies become the victims of their own success. The successful Mom and Pop operation becomes a three-store operation, then finds itself in financial trouble once it reaches the point where Mom, Pop, and its best employees cannot manage all the stores in its empire.

Even when there is only one location, there is a tendency for businesses to want to grow, no matter what the cost. Unfortunately, growth frequently means hiring employees with less ability, loyalty, and commitment than the core employees who made the business work in the first place. Eventually, the business suffers, either in quality or efficiency.

When businesses grow, the need for rules and regulations — employee handbooks and policy manuals — increases.

A business might be able to operate with a handful of employees without written rules, but inevitably, an employee will be hired who needs to be disciplined, or who complains that he or she is not being treated the same as the other employees (for example, in terms of benefits such as health insurance and time off). Rules will be necessary, and those rules will need to be revised as employees learn to work around those rules.

Of course, as businesses get bigger, the need for managers rises. Managers are employees too, and they sometimes need rules and direction just like rank-and-file employees.

A bad manager, however, can do far more damage than a bad employee. Bad management decisions generate lawsuits. That’s one reason why supervisor training is so important, especially as businesses grow.

It is ridiculous to argue against growth, and that is not the purpose of this article. Instead, I want all businesses to confront the problems of growth with their eyes wide open. Here are some useful tips to keep in mind.

It is better to wait for the right employee (or manager) than hire the wrong employee, even if you desperately need employees. And by the right employee, I also mean the right employee in terms of personality and fit.

My firm was once larger than it is today, and we hired competent lawyers without regard to personality and fit. We ended up with lawyers who made it unpleasant to work with them, and we ended up with lawyers who did not share our commitment and devotion to client service, business development, and hard work. Thankfully, they are gone, but not without a great deal of pain in the process.

If you find an employee who shares your values, you will probably not have to confront the unpleasant task of firing him someday. If you take personality and fit into account, you may not turn the workplace into a war zone where employees are constantly fighting.

If you have hired the wrong employee, or if you have made an incorrect growth decision, correct the situation as soon as you can. Do not wait until you have no choice. If you open a new store and it merely breaks even, close it because it is taking away precious time and energy from you with no return.

I can almost guarantee that the break-even store is costing you money overall because you are neglecting the better stores. I can almost guarantee that the marginal employee is interfering with the efficiency of your better employees. Why wait?

Of course, and there is always an “of course,” selective hiring and quick firing carry the risk of more litigation. That does not mean, however, that you cannot minimize the risk by developing objective criteria for hiring and discharge that ensure that you end up with the right employee.

Those objective criteria are easy to develop. Just look at your own performance as an ideal — you show up early and leave late, you are good with customers, you are concerned with cost and efficiency, and so on and so forth.

You can also take a few moments to describe the traits among your current employees that have helped your business succeed.

Then, apply those traits in your hiring and firing, asking your labor attorney to look over those objective criteria just in case you were a bit too zealous.

Growth for growth’s sake is never a good idea. Controlled growth, especially in the area of employee recruitment and retention, is essential to continued, healthy growth.

Don’t let your business be a victim of uncontrolled growth and the scores of incompetent employees it generates.

Frank Kollman is a partner in the law firm of Kollman & Saucier, PA, in Baltimore, MD. He can be reached by phone at (410) 727-4300 or fax (410) 727-4391. His firm’s web site at www.kollman-law.com has articles, sample policies, news and other information on employee/employer relations.