To coach, separate, transfer or demote. That is the question!

#managing_others When someone is having performance issues at work, what do you do? I share my framework for making these decisions.

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When someone on your team is struggling, what do you do to correct the situation? The natural inclination for most junior managers is to coach. Unfortunately, coaching takes time, and meanwhile, the business moves on, and everyone is expected to pull their weight. Another approach is to let someone go when they are no longer meeting the needs of their role. However, there is a near-term cost. The individual was likely contributing in some capacity, and hiring a replacement will take time. Regardless of the level of underperformance, chances are the individual has some institutional knowledge that will be lost when they leave. Managing performance is one of the hardest skills to master as a manager. Arguably, all of us are bad at it because the decision-making process is complicated. In this article, I share with you my framework for thinking through what actions I should take when I need to manage an individual’s performance.

What actions can I take to manage performance?

First, it’s essential to understand that separation and coaching aren’t the only options. If the objective is to make sure that someone at the company is contributing to their ability relative to their role and compensation, then asking them to leave or coaching them are just two approaches. In this section, I want to lay out all the options you have at your disposal.

• Separate - When you separate, you terminate the relationship between the company and the individual.

• Coach - The act of coaching involves the process of identifying gaps in the individual’s performance and actively addressing those gaps between manager and individual through consistent review and feedback. Coaching when someone has performance struggles is a specific exercise that begins with a frank discussion that weaknesses exist, and the individual needs to address them to stay in their role at the company.

• Demote - The act of demoting refers to the broad set of activities like level-setting a person’s title, compensation, and scope, where they mostly remain in a similar but smaller role. Due to the role change, the mechanics of the demotion also involve informing the rest of the team.

• Transfer - The act of transfer involves repositioning the individual from one group or department to another that requires a different set of skills or expertise.

For the sake of completeness, I do not explicitly address corporate performance improvement plan processes (PIP). In my 20 years in the industry, PIPs rarely work. Most companies use PIPs as a delayed separation vehicle. I’ve seen dozens of PIP situations over the years, and I can only recount a few cases where the person remained at the company. I accept that PIPs exist in our field, I’ve had to perform them myself, but I consider them no different than outright separation. As a result, I don’t discuss PIPs here.

There’s more to managing performance than just performance

One of the reasons why managing individual performance is difficult is because it isn’t just about performance. I’ve come to realize that there are two other factors to consider that are important to me.

Range

The first factor I consider in addition to an individual’s performance in the job they are in is their range: what are other things the individual can potentially do well? David Epstein’s book titled Range makes the argument that polymaths, people who are capable of deep expertise in a range of subjects, are often the same individuals that have an outsized impact in their field of study or company. In the world of software engineering, I’ve often noted that those engineers who can also function as capable designers, product managers, or marketers are far more impactful to the company as engineers than those who lack that range. Even within the field, a software engineer who is capable of writing robust front-end code and back-end code is often just a better engineer due to their experience in working on a wide variety of programming languages and frameworks. For these reasons, I have a strong bias for hiring diagonal thinkers as opposed to specialists.

Trust

The second factor I consider is trust: do people on the team trust the individual, and do they impact the culture of the group positively? Simon Sinek’s Infinite Game is one of the more recent books that make the argument that high-trust individuals are a cornerstone for high performing teams. Even before Sinek popularized these claims, Gen. Stanley McChrystal’s book Team of Teams, outlined in detail the impact of trust when assembling elite military units. A high performing individual that alienates their team will result in a lower-performing squad overall. While a high-trust individual may not be the highest performer on a team, they might make the team better by improving the culture and communication within the group. Letting go the company’s culture carriers can be highly disruptive to the morale of the organization. Therefore, trust needs to be factored into this conversation as well.

The trust-range framework for managing performance

Using trust and range as factors in my decision making, I use the following 2x2 to decide how I make performance management decisions.

1. Low Trust, Low Range

If an individual is narrowly skilled and has poor relationships with their colleagues, the optimal action is to separate. The limited range means the individual is likely to be ineffective in other groups. From a coaching perspective, not only do you need to correct the skill gap, but you also have to fix the attitude. In practice, I’ve found that there are simply too many strikes in this scenario that would make prolonging the relationship worthwhile.

2. High Trust, Low Range

An individual who is a culture carrier, but is struggling in their current job and lacks other skills deep enough that different parts of the company may find useful limits some options. However, investing time in these individuals can be worthwhile. If you decide to coach, you’ll need to factor in how quickly the individual can uplevel their performance to meet the needs of the business.

In many circumstances, the time it takes to improve performance may be too long for the business to absorb, or more often, it won’t ever happen. In practice, I advise most managers - if you can’t turn the situation around in 3 months, don’t even try. In these cases, one approach would be to demote the individual with their permission and attempt to gracefully handle the transition while maintaining the reputation of the individual. If that doesn’t work, then offer a severance package.

3. High Range, Low Trust

An individual with a high range may have a number of skills useful to the company, but they’ve alienated their colleagues. Because the individual compromised trust within their team, it makes little sense to address the performance gap at this point. If the individual’s negative impact is local to the team they are on, then consider transferring the individual to another group where they can start fresh while leveraging their tool chest of other skills. If this approach is taken, the individual still needs to be coached on how they can foster trust with their new team so that no organ rejection occurs.

If trust issues are pervasive across multiple teams such that a transfer is not possible, the only logical outcome is to separate.

4. High range, High trust

High range, high trust individuals afford you the most options. If it’s possible to coach the individual so that their job performance meets the needs of the business in a reasonable timeframe, this is often the most straightforward approach. Alternatively, transferring the individual or changing the scope of their job could equally work. Because the person has earned the trust of the company, I find that bringing the impacted individual into the decision-making process is worthwhile.

The value of decision frameworks for performance management

Trust and range aren’t the only factors that impact performance management decisions, so I’d encourage you to think about how to frame the problem that reflects your values. Building a framework for how you make performance management decisions that incorporates your values, is one way of making sure your values become your virtues.