Up-to-date information for employers on topics and issues that may affect workplace operations. The posts are current as of the date of the posting.


by Jennifer Brown Shaw and William D. Bishop, Jr. | CalChamber, California Employer Update | Jan 1, 2013

“Bad employees” – poor performers or

workers who otherwise do not live up

to management’s expectations – aren’t

good for the workplace.

It’s not easy to explain why this happens

to some employees. It might be a

personal issue, such as a divorce, that

spills over into the employee’s behavior

at the workplace. Perhaps the employee

is secretly fighting a substance abuse

issue. Maybe the employee is developing

a particularly nasty personality conflict

with a co-worker.

Many times, the employee was simply

“bad” from the start, and a faulty hiring

process resulted in a bad hire.

Big Trouble and Bad Hires

If you’re dealing with the fallout of

making a bad hire, you’re certainly not

alone. In a recent CareerBuilder survey

of nearly 2,700 employers, 68 percent

said they were affected by a bad hire.

Bad hires can negatively affect

productivity and workplace dynamics.

In a survey of chief financial officers

(CFOs) conducted by Robert Half

International, the CFOs were asked,

“To what extent do you think making a

poor hiring decision affects the morale

of your team?” Sixty percent said a

bad hiring decision “somewhat” affects

morale and 35 percent said the decision

“greatly” affects morale.

A bad hire can cost an employer time

and money, and the tangible costs associated

with managing bad employees

can be staggering.

The Robert Half International survey

found that, on average, supervisors

spend nearly one day of each workweek

overseeing poorly performing


Bad hiring decisions can also eat into

the bottom line. In the CareerBuilder survey, 41 percent of the companies that

made a bad hire estimated that it cost

them more than $25,000; and one in

four said making a bad hire cost more

than $50,000.

The survey also asked employers about

the most common effects of a bad hire:

  • Legal issues – 9 percent
  • Lost time to recruit and train

    another worker – 40 percent

  • Cost to recruit and train another

    worker – 37 percent

  • Employee morale negatively

    affected – 36 percent

  • Less productivity – 41 percent

Management can reduce the time and

expense associated with bad employees

by improving lawful hiring practices.

But no hiring method is foolproof.

Employers should focus on more

effectively identifying bad employees

sooner, rather than later, before they

drain resources and harm the business.

Make a Good Hiring Decision

In today’s business climate, it is a

challenge to predict whether an

applicant will turn out to be a good

hire. Hiring managers have limited

exposure to candidates, and usually

no opportunity to evaluate a

candidate’s actual work.

The hiring process consumes

time and diverts attention

from the business. To make

matters worse, there is a trend

in employment law to limit the

information employers may

obtain about applicants.

California statutes and case law

restrict background checks, personality

testing, drug testing, employers’ ability

to research applicants’ social media

postings, and more.

Even so, employers can take steps to

improve the chance of a good hire.

First, employers must know what they

are looking for. Management should

have a detailed, accurate list of the knowledge, skills and abilities the

company seeks. The goal, of course, is

to hire the best match for the job and

the employer’s work environment.

But there is no such thing as a “perfect”

candidate. Employers should identify

mandatory skills and those that can be

developed over time. They also should

distinguish between “must-haves,” and


Second, successful recruiting requires

knowing where to find the right

candidates. Employers must plan

and evaluate how to source the most

qualified candidates. Resources include

personal networks, online recruiting

sources, agencies, competitors and

professional associations.

Third, the hiring team must understand

not only the job requirements, but

how to determine whether a candidate

possesses the needed abilities.

No manager innately knows how to

conduct interviews. Some do not even

understand the purpose of having an

interview. Therefore, management must

be trained to ask questions that elicit

information related to the candidate’s

ability to do the job. The questions are

important; but so are the candidate’s


Specific, job-related questions are key.

It is equally important for managers to

understand there are a variety of illegal

questions, such as inquiring about a

candidate’s marital status or religious

beliefs without a legitimate reason for

doing so. Even a successful candidate

may later claim discrimination based on

inappropriate interview questions.

Fourth, managers also must look for

“red flags” revealed in employment

applications and rí©sumí©s:

  • Is the candidate a job hopper?
  • Does he/she have a steady

    progression of increasing

    responsibilities and pay?

  • Do significant gaps in employment


  • How did his/her prior employment


  • Do the educational and job history

    stated on the rí©sumí© match the


Finally, employers must realize

that there is competition for the

best workers. Employers should

analyze the market to ensure that

their compensation and benefits are

competitive, and that the company’s

employment policies and management

are attractive to the workforce.

Even the best hiring practices are

no guarantee of a problem-free

employment relationship. Bad

employees can navigate the most

rigorous interviews. And some “good”

employees turn “bad” over time.

Performance Issues

Often, employees turn bad because of

management’s failure to communicate

expectations or provide accurate

feedback. Management should

ensure that employees have a clear

understanding of performance

requirements and, if necessary, why

expectations were not met.

Employers should not allow artificially

glowing or perfunctory performance

evaluations. Such reviews mislead

employees and, worse, can be used

against the employer in the event of a

legal dispute.

If performance is lacking, the evaluation

should clearly and candidly say so.

Management should not wait for annual

or semi-annual performance reviews to

provide performance feedback.

Legal disputes over terminations most

frequently occur when the discharged

employee was surprised by his/her


Employers that use progressive

discipline, such as corrective action

notices or warnings, should make sure

the notices or warnings are drafted

clearly and communicated to the

employee in a timely manner.

The employee should be permitted

to respond to an assessment of poor

performance. If the employee is not

allowed to respond, the employee could

later argue in a legal dispute that his/

her silence was due to ignorance of the

performance issues or not being allowed

to challenge the assessment.

Employers can negate those arguments

by giving the employee every

opportunity to address the assessment.

If the employee does not respond,

management may be able to argue the

employee’s silence demonstrates proof

of agreement or a lack of interest.

When assessing and correcting

performance, management should

prepare a performance improvement

plan with tangible benchmarks.

The plan should set realistic timetables

and goals. It is important to seek the

employee’s commitment to attain the

listed goals.

The employer should follow up to

assess whether the employee responded

positively to the corrective action,

whether the poor performance is

continuing or to address other concerns.

The most powerful legal weapon an employer can wield against a bad

employee is a well-drafted policy of

employment at-will.

At-will employment means that the

employer has maximum flexibility to

decide when it is time to part ways,

without any dispute over whether the

employer has sufficient “cause” to end

the employment relationship.

The Payoff

It takes time to implement effective

hiring procedures and employee

performance tools. But employers

who invest the appropriate resources

in making improvements to hiring

procedures and performance evaluations

will see benefits.

They put themselves in a position to

avoid the expense and other burdens

associated with bad employees; and they

provide an environment where good

employees can thrive without being

spoiled by bad apples.