Why Reductions Must Be Mandatory

“Responsibility, n. A detachable burden easily shifted to the shoulders of God, Fate, Fortune, Luck, or one’s neighbor. In the days of astrology, it was customary to unload it upon a star.” – Ambrose Bierce (The Devil’s Dictionary, 1881-1911)


Last week, we spoke about the need to fire weak and mediocre employees. It is the least fun thing to do in business. If, however, you want to build a successful business and accomplish great things, it is an absolute necessity.

Most of your time should be spent searching for and cultivating great people, but some time must be devoted to culling out the weaker ones.

Studies show that next to being fired, firing is the most stressful business experience. And that’s surely why it is not done as often as it should be. When you have an employee who is not doing a great job but does come to work every day and is pleasant, you may not have the heart to fire him. So you work around him. You shift some of his work to other employees. You lower your standards. You may even hire someone to take over some of his responsibilities.

Needless to say, all these “solutions” are bad — bad for you as a leader, bad for the bottom line, and bad for his fellow workers who have to pick up the slack.

If firing a single so-so employee is hard, cashiering a group of them is traumatic. Yet, when you are responsible for a budget and the quality of your business’s work, you will sooner or later be asked to “reduce compensation” by a significant degree. This, of course, means firing a number of people at the same time. Not a pleasant task. When that happens, you may very well think, “I’m barely getting everything done now. How can I possibly do it with fewer people?”

You can. In fact, you will probably be amazed at how well the business runs with fewer people. Let’s say you are barely getting along with 15 people. You fire three of them. And then — somehow — things get better. Productivity increases. Morale soars. The future looks brighter than it had in ages. In my experience, it works out this way nine out of 10 times. It’s better afterward than it was before. You can see it. And your employees feel it.

But that kind of outcome may be difficult to imagine when you are up to your neck in work and more is coming in the door every day.

If you need to cut payroll to meet your budget, don’t deliberate over it. Do this instead:

  1. Determine how many dollars you need to cut.
  2. Identify your weakest employees.
  3. Fire enough of them to meet your budget.

Do this before you figure out how you are going to survive without them.

As soon as they are gone, sit down with a small group of your best people, explain your actions, and have them help you figure out how to redistribute the work among the people who remain.

You may be surprised at what will happen. You will not only maintain productivity but also improve morale.