how to manage a problem employee

A reader writes:

As you hail from the non-profit sector just as I, you can probably lead me down the right path with this one. I’m a new HR rep for this mid size organization, and have inherited this situation:

We have two employees who work in our fundraising department. They both work full time, but telecommute at their will, which is fine. They both also do consultancy work on the side. Now employee 1 does not worry me so much — she signed the conflicts of interest policy, great work ethic, and we’re happy with her work. We know when she is telecommuting, she is still working for us.

Employee 2 manages our donors — databases, relationships and so on, unlike employee 1, who mainly puts the feelers out there for donations. My worry is this — we know that she is managing donor accounts for other organizations as her freelance work. She could be using our donor base for her own consulting work, and she could also be using our data to levy her work with other non-profit organizations, i.e comparing donations, targeting similar client bases etc. which would hurt us significantly.

She also signed the policy, but her work is less than par and her general attitude indicates that she does not have the best work ethic. She delays in responding to her emails and calls, and is sometimes unavailable when donors call — so we suspect when she is “working from home,” there is little work going on.

Aside from a suspicion of foul play, we have not much else. If I had hired either of these people, I would have let them know that they could not do consultancy work while they were our employee. But this has gone on for nearly a year, and only now have eyebrows been raised.

We are not able to prove that this is happening, and we also have the situation where both have declared their consultancy work, and both have been allowed to continue. We are working on corrective action for her sub-par work, but the bigger danger is this — that if she becomes a disgruntled employee, she will exploit our databases. What are our rights as an employer? Our conflicts of interest policy does not stipulate what to do if we only have a suspicion.

We are also in a situation where we have one employee who we trust is not exploiting us, and one who we suspect is, so do we treat them both the same, or do we go ahead and take action for the one we suspect? What is your take on this situation?

Why is no one managing here? It sounds like there are three things holding you back: that you’re worried you can’t “prove” your case, that you’re concerned about treating her differently from her more responsible coworker, and that you’re worried she may exploit your database for her other clients.

There’s no requirement that you treat a reliable and an unreliable employee the same. You have two different situations, and you should handle them differently, tailored to the strengths and weaknesses of each. That’s just good management.

And you don’t need to “prove” your case with courtroom accuracy. The question for you is whether or not you’re getting what you need from the employee, not whether you could convince a jury. And right now, you’re not. So either she starts giving you what you need (after you clearly let her know what that is), or you need to replace her.

As for your worry that she may exploit your database — well, you’re already worried this is happening anyway. Second, the fact that you don’t trust her in this area is yet another sign that you need to deal with the situation promptly and assertively. You cannot have employees who you don’t trust to behave with integrity, particularly in that type of work. Now, if your employees don’t already sign a confidentiality agreement, you should have everyone sign one anyway. But beyond that, you can’t be held hostage to this worry — you need to manage her far more aggressively so that the situation is resolved.

And that’s my big question: Why is no one managing this employee’s performance? She’s unresponsive when she’s working from home, you have reason to think there’s little work happening, and you guys are just sort of wringing your hands over it. Her manager needs to get in there and manage. This means telling her that she’s expected to be completely available and responsive when she’s working from home, with prompt responses to calls and emails from staff or donors. Period. Unless there’s an immediate and significant improvement, she will no longer be allowed to work from home. Frankly, you could just pull the working-from-home privilege right now if you wanted to; it’s a privilege, after all, not an entitlement, and unless someone demonstrates that they can do it responsibly, it’s foolish to allow them to do it at all.

And you say her work is less than par. Her manager needs to spell out for explicitly what the bar is that she needs to meet, and what the consequences will be for not meeting it. And then those consequences need to be enforced (termination, presumably).

Regarding the work for other nonprofits (which frankly sounds like the least of your worries, compared to the other stuff), it’s completely legitimate to say, “We’re not comfortable with you managing donor accounts for other organizations, given the nature of your work here” and someone should have said that when she first proposed it. It’s a bit more complicated now, since it’s been allowed to go on, but that doesn’t mean that you can’t still address it. You just need to explicitly say, “I understand that this has been allowed up until now, but we’ve reviewed the situation and we can’t allow it to continue because it creates a conflict of interest.” I suspect someone out there is going to say that this is an unfair action since you don’t actually know that she’s doing anything wrong, but this absolutely is a conflict of interest and it should never have been allowed to start. Most nonprofit fundraising teams wouldn’t allow it.

Get in there and manage (or get her manager to). Here are some other posts that may help:

how to deal with employee performance problems
which employee should be let go?
you need the right person, not the almost right person
new managers and authority

And I don’t usually plug my book, but it sounds like it would be helpful, and it’s directed toward nonprofit managers. Start with the chapter on managing performance problems.

Good luck!

Read an update to this letter here.

I agree that revoking the telecommuting of the poor employee is a good idea. However, don�t call it a �policy change� unless you actually update and document the policy and apply it equally to everyone. If the poor employee is the only one receiving this �policy,� she�ll be screaming discrimination before you can even address performance. A �policy� for a single person isn�t a policy. It�s a punishment. And it�s okay to call it a punishment.

If you want to create a real, effective telecommute policy, publish the telecommuting requirements that apply to everyone. For example, you must maintain productivity at X level while telecommuting or you lose the privilege. (If you don�t have a way to objectively measure employees� productivity, you need one. �Butt-in-chair time� is not productivity, whether in the office or telecommuting. Processing X number of donations or recruiting Y dollars is productivity.)

Silicon Valley Warrior* March 16, 2010 at 12:02 am

Managers often crave the title and the perceived power that goes with it instead of dealing with the accountability of "being" a manager. This includes the ability to constructively confront performance issues. The issue is real but it is a symptom of the real problem. The managers needs to man up (or woman up if that is politically correct). Managers will hide behind policies and HR if the company is large enough to an HR department. But they need to own the issue and deal with it.

Anonymous* March 17, 2010 at 1:06 am

I don't really get why this is a 'non-profit' issue. All of the issues would be the same no matter what the employer's tax status.

The employer should be establishing a Performance Improvement Plan (PIP) with this underperforming worker. Identify three or four deficiencies in their work, and clear, measurable, and attainable goals. The PIP should have a deadline for achieving those goals and a consequence for not attaining them.

For example one goal may be being phone-accessible all eight hrs/day every day for a month. Measurement should be no reports of not being reachable during that time. And if she fails at that goal, the consequence is not having telecommuting privileges.

As far as the freelancing issue goes, I don't think every.single freelance opportunity is a conflict of interest, and I would be careful about outlawing ALL income-producing outside work. If this person is maintaining a donor database for, say, the NRA during the day, and maintaining membership credentials records for the AIA in the evenings, they are not likely to encounter an opportunity where either association's confidential or private data could be compromised. The organization should define what constitutes a conflict of interest, and apply it to all employees, not just this one.

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