Ep. 29: What to Do When an Employee is Underperforming
Do you have any team members that you know just aren’t cutting it? Anyone you’re thinking you may need to replace at some point? Well, inaction isn’t helping anything, so in this episode, Jeff discusses what you should do about it, including steps to take to resolve the issue and when it’s time to go ahead and replace them.
Topics:
1:12 – Current labor market trends that are aggravating these issues
7:48 – Can the issue be resolved?
12:10 – The steps to take when an employee isn’t performing
21:34 – When it’s time to let them go
Links:
BLS Study - https://www.bls.gov/news.release/jolts.nr0.htm
NFIB Study - https://assets.nfib.com/nfibcom/2022-Feb-Jobs-Report-FINAL.pdf
Learn more about MGE - https://www.mgeonline.com
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Questions From This Episode
What's the biggest staffing mistake practices make?
It isn't hiring the wrong person, it's keeping them too long. Owners recognize a team member isn't performing but don't have a clear process for addressing it, so the person stays in place, and the underperformance ends up dragging down the rest of the team along with overall productivity.
How tight is the labor market right now, and why does that matter here?
As of January 2022, the Bureau of Labor Statistics Jolts report showed 11,263,000 open jobs nationally, up from the previous record of 8 million set just a year earlier, with unemployment at 3.8 percent. Among small businesses specifically, roughly half report having a position they simply could not fill that month for eight straight months running, and the net change in workers has been negative in seven of the last eight months. That combination makes owners even more reluctant to let a struggling employee go, since finding a replacement is harder than it used to be.
Is it ever better to keep a destructive employee than have no one in the role?
No. Practices that have let go of a team member who was rude to patients or clashing with the rest of the staff have consistently seen their numbers go up afterward, since everyone else ends up picking up the slack more effectively than the underperformer ever did. A warm body at the front desk isn't automatically better than an open position.
What's the first concrete step in addressing a non-performing employee?
Sit down with them and go over specific, documented issues rather than vague complaints. Problems should be noted as they happen, with dates and details, so the conversation deals in facts instead of a general sense that something's wrong, which is usually what leads to denial in the moment or a shocked reaction if someone is eventually let go without ever having been warned.
How do you know if an employee is actually capable of turning it around?
Look for two things: whether they take real ownership of what went wrong, and whether their performance actually moves against a measurable statistic once the issue has been addressed. A little resistance to blame is normal human nature, but zero accountability for anything that happens in their role is a much harder problem to work with. If the person owns it and the numbers start improving, even gradually, that's usually a good sign the situation is salvageable.
Episode Transcript
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Today's schedule wasn't all that productive, and when you look at tomorrow's, you see a two hour opening during primary time, when most of your productive procedures are supposed to happen. This is the fifth time that's happened this month. You sit there and think your scheduling coordinator just isn't cutting it. Or maybe your hygienist just turned in a sub $500 production day for the eighth time this month, or your treatment coordinator just failed to close their fourth straight consultation. Being in the service business, the quality of team performance is at a premium, and every person on your team plays a part in the overall outcome of the office. Which means if someone isn't doing a good job, that affects the rest of the team, if not the whole practice. That's what I want to talk about in this week's episode of Dental Business Rx: how to sort out a non-performing team member. My name is Jeff Blumberg, and I'm your host.
I want to start with a bit of a bird's eye view of what's happening with employment and the labor market in the United States right now, and how it affects employee performance. One of the things we've always noticed with clients is that staffing has always been an issue for the majority of newer clients when they first come to us, whether it's finding the right person, hiring them, onboarding them, or getting them productive. If there's one thing I'd drill down on, it's this: a new client will often come in with one or two employees they feel are underperforming, people they'd replace in a heartbeat if the right replacement came along, or people they feel they settled for because they needed somebody. That's not uncommon at all, especially with newer clients. They have this person on board, they don't really know what to do to address the non-performance, so the person just stays there.
I'll say this often at seminars: one of the biggest problems I've noticed with clients isn't that they hire the wrong person, it's that they keep them too long, because they don't know what to do about it. And that starts to affect not just office productivity, but the rest of the team. You'll see a gradient here, from someone who's just not a great performer, to someone who's not very reactive, all the way to someone who's actively destructive to the office. On the other end of that scale you'll have people who are adequate, and people who are genuinely excellent. This is already an area of weakness in the dental industry specifically, we tend to hold onto people who just aren't cutting it for too long.
Now layer that against what's happening with employment in the United States right now. The most recent Jolts report, the Job Openings and Labor Turnover report from the Bureau of Labor Statistics, came out in early March for data from January of 2022. It showed 11,263,000 open jobs in the United States as of that month. For comparison, in January of 2021 we hit what was then a record of 8 million open jobs. So that number has climbed significantly. Unemployment right now sits at 3.8 percent, the lowest it's been since COVID, though pre-COVID it was as low as 3.5 percent. The quits report, meaning the number of people voluntarily leaving jobs, has been over 4 million for eight straight months. That's a genuinely tight labor market at the national level.
At the small business level, I like to look at data from the National Federation of Independent Business, the NFIB. They run a couple of surveys worth watching. The first is what they call their hard to fill index, which measures the percentage of small business owners who report having one or more open positions they could not fill that month. That percentage has been at or close to 50 percent for the last eight months, meaning close to half of small businesses in the US have jobs they're trying to fill and simply can't. They also track net change in workers, essentially whether businesses added or lost employees that month, with zero representing no net change. Over the last eight months, that number has only been positive once, it's been negative seven of the last eight months, meaning small businesses are on average operating with fewer workers than they'd like, month over month. Finding employees right now is tougher than it was two years ago. That might sound obvious, but it's very true.
So take everything I opened with, that in the dental industry especially, practices tend to hold onto a non-performing employee too long because they're afraid to let them go and worried they won't be able to replace them, and add in the fact that it's genuinely harder to find people right now. What does that mean in practice? It means the hygienist who won't help present treatment and doesn't get along with the rest of the staff, the one you'd replace in five seconds if you could, isn't going anywhere for a while, because you're afraid you won't be able to find another one.
I want to address that directly. If you have someone who's actively destructive to the practice, you might think it's better to have somebody than nobody, that a warm body at the front desk, even if they're not doing a good job, beats an empty chair. That's simply not true. I've seen it happen repeatedly with clients: they let go of someone who wasn't getting along with the rest of the team, who was rude to patients, and the practice's numbers go up afterward, with everyone else picking up that person's work more effectively than they ever did. Keeping someone who's actively destructive is not a good idea.
But let's get back to the core question: if you have someone who's not performing, is this a fixable situation? That depends on the specifics, but in most cases, yes, it is. You can straighten things out with that team member and get the performance you were hoping for. Nobody is perfect and mistake-free, that's never going to happen, but can you get somebody who does what you ask and performs adequately? Yes, in most cases, because the vast majority of people genuinely want to do a good job, and with enough patience and the right training, they usually can.
This really is a two-sided problem. The employee bears responsibility when they make mistakes and underperform, of course they do. But on the other side, you have to look at what environment you're putting them into, meaning your practice, to figure out how much responsibility you bear as well. Take two receptionist jobs. In one practice, the new receptionist gets no training materials, the office manager is overworked and gruff, nobody teaches them how to answer the phone, and they get yelled at when they lose calls or misschedule a patient, having to figure out the software themselves on YouTube. In the other practice, the receptionist goes through a real onboarding and orientation process, gets steeped in the practice's culture, and is essentially apprenticed until they actually know how to do the job. Which of those two practices do you think has a staff retention problem? Not the second one. The first will tend to turn over a lot of staff, and if you turn over enough people, your office develops a reputation as a place nobody wants to work, which becomes its own problem to fix. So there's a real responsibility you bear as a leader to set the practice up in a way that actually allows new people to succeed. New people don't know what's going on yet, and they're going to make mistakes, that's not a criticism, it's just what happens. I've joked about this for years, but it's true: inevitably, on day one, a new receptionist will drop a call. I always know when it's happened, because I'll see them out walking around the block with our office manager, upset, because they think they've messed up badly enough to get fired. Of course they haven't. New people make mistakes. As long as you're patient and willing to bring them along, there's a good chance they'll make it, and you can fix a lot of these situations.
Let's talk about actually fixing this. If I had to estimate, and this is just my own read on it, not an official survey, I'd say that when someone has a non-performing employee, about 50 percent of the time the owner will actually talk to them about it, usually only after numerous mistakes have piled up, sometimes five or six. Nobody ever addresses it after the first mistake. The other 50 percent of the time, the manager or doctor just quietly starts resenting the person instead, maybe walking past their desk a little faster, not smiling as much, without ever actually addressing the issue directly. It's a lot simpler than people think to actually deal with it. We do extensive training on this at MGE, but the goal of this podcast is to give you something you can start using in your business right now, so let's cover the basics of what I'd actually do with a non-performing employee.
Before I get into it: I'm not an employment attorney, and I'd recommend having one, it makes life a lot easier, especially for difficult questions, and it's a lot cheaper to spend a little money up front than a lot of money later if something gets mishandled. So take responsibility for what you decide to do here, and consult an employment attorney if you need to.
Here's what I'd do with somebody who's messing up. First, I'd talk to them. If I'm the doctor, I'd likely do this alongside the office manager, who might lead the conversation. Ideally, issues have already been addressed as they happen, in an appropriate way. If a dental assistant is messing up during a procedure with a patient in the chair, you don't address it in front of the patient, I've seen that happen, and it's not the moment for it. You address it after the procedure, out of earshot, so you can actually have a real conversation. These things should be addressed as they go, and they should be documented. If you don't document what you plan to discuss, the conversation becomes a vague generalization. You may have experienced this yourself: you sit down to talk to someone about repeated mistakes, and if you haven't written anything down, you don't remember half of it, or they start denying it happened. I've had that happen, someone flatly denying something I know occurred, simply because I didn't have the date and details written down. If you do have it documented, it's very easy to bring up specifics.
So you and your office manager sit down with this employee. You avoid generalizations, you go over specifically what's going wrong, and you're honest with them. Most people are genuinely nice and don't want to hurt someone's feelings, so telling somebody they're doing a bad job doesn't feel good. But you're doing yourself and the employee a disservice if you don't. One operating principle I adopted years ago: if someone's messing up, I want to handle it now, not wait until they've messed up so many times that I'm completely fed up by the time I sit down with them. I believe people deserve a warning or a heads up that things aren't going well before they're abruptly let go, because in a lot of cases, they'll actually change. You sit down with someone, point out specifically what's going wrong, and explain that if the pattern continues, you'll have to let them go. Often, they change. Had you never had that conversation, you'd probably be firing them two weeks later, and if you never pointed out the specific errors along the way, that person would be genuinely shocked when it happened. Whereas if you've already had the conversation and the pattern continues, letting them go becomes much easier, for both of you, they can see it coming, and it gives them a real opportunity to fix it first.
When you sit down with someone, you need specific issues to point to, and that means having a way to actually grade their performance. This is why we're big proponents of two things: first, assigning a specific job with clear duties, if someone is the scheduler, they're responsible for the schedule, if they're the financial coordinator, they're responsible for collections, and second, having a statistic that measures their performance against that responsibility. A scheduler might be measured on production, a financial coordinator on collections, a PR person on new patients. Without an actual statistic, you can't objectively measure performance, it just becomes about how you feel, which is dangerous ground. So before I sit down with someone, I want to make sure their underperformance is visible statistically, not just a hunch. Then I bring it up directly: stats are down, here's what's been happening, we've had five instances of this.
When I talk to them about it, I'm not rude, mean, heavy, or nasty about it, I'm matter of fact. I've seen people handle these conversations by getting mean or nasty, and I don't understand why. Losing a job, or hearing you might lose one, is already rough enough for somebody, there's no need to be a jerk about it on top of that. You don't have to be soft, but you can absolutely be pleasant and professional. I handle it the same way every time: pleasant, professional, explain specifically what they're doing wrong and what needs to change, because their current performance isn't adequate.
Once I've explained the issue and clarified the specifics, the next thing I'm looking for is whether the person actually owns it. Does the person take responsibility for their mistakes? People are naturally quick to claim credit for things that go well, and a little more hesitant to own the things that don't, that's just human nature, and I tolerate a reasonable amount of that. You'll hear plenty from your scheduler after a record production month, less so when there's a big hole in the schedule, since there are usually other contributing factors and it wasn't entirely their fault. That's fine, up to a point. But if someone shows zero accountability for anything happening in their role, if it's always the patient's fault, another staff member's fault, anything but their own, that's a much harder problem, since you obviously can't force accountability onto somebody. I've had very few people like that in my career, maybe five or six over the years, people I genuinely could not get to acknowledge any responsibility for what went wrong in their job. Those situations didn't work out long term. If you run into someone like that, it's your own call how to handle it, whether you wait for the next mistake to let them go, or if it's serious enough, address it head on immediately. In many cases, for me, that kind of zero accountability is simply a no go.
For the vast majority of people who do show some accountability, the next step is figuring out why the problem is happening. Say I have a receptionist who's mishandling new patient calls, doing a poor job, not following how I trained them, I need to find out why. Maybe they're uncomfortable with the language they've been told to use. Maybe it's something else entirely. We had a client whose associate had a hard time connecting with patients personally, so the client spent an hour roleplaying as a patient with that associate until they felt comfortable. That's exactly what I'd do if someone was struggling with new patient calls, have the office manager roleplay it with them, what we call drilling, until they genuinely feel comfortable. Will they be perfect immediately afterward? Probably not, but they'll start doing better, and once someone starts winning at something, it becomes easier to keep winning. Handle one shopper call well, and the next one gets a little easier.
You want to find out specifically what's going wrong and why, using your own judgment about whether it's something you can actually solve. Occasionally you'll find out a receptionist just doesn't like people, or doesn't like dentistry, that's a harder problem. But in most cases, once you find the actual cause, you can work out a fix, whether that's drilling, clarification, or something else, and make a genuine effort to correct it. Here's the point: that correction, even if it takes an hour or two spread across a few days, is a lot easier than replacing the position entirely, assuming the person is salvageable. So it's worth making that effort before escalating.
Once you've talked to the person, shown them specifically what's going wrong in a matter of fact way without making them feel attacked, and they've owned it to a reasonable degree, and you've figured out a way to help solve the underlying issue, whether that's drilling or clarification, the next step is monitoring their performance. You want to actually see a change, and this is where statistics come in handy again, you can track whether the pattern you're trying to correct is actually improving. Maybe it's a hygienist who doesn't like doing patient education, is it getting better? If it's improving, even if it's not perfect yet, that's genuinely good, what matters most is that the person is showing they can improve. If it's not improving, or the same problems keep happening, then it may be time to replace that person. If you've made that decision, move fast, don't wait around for the perfect moment, just do it. That's my own take on it, you'll have to decide what's right for your situation.
A few last things worth remembering. When you're evaluating points of non-performance, weigh the person's overall value to the practice against whatever specifically is going wrong, and make sure you're accurately identifying whether it's really non-performance in the first place. Say I have a scheduler who isn't getting along with the financial coordinator, but the scheduler is doing a genuinely great job and the financial coordinator isn't, and is offloading some of their own work onto the scheduler. I'd want to investigate before assuming the scheduler is the problem. Someone's overall value as a team member matters a great deal in these conversations, and ultimately what I'm looking for is whether they're doing the job I actually asked them to do. If a treatment coordinator is occasionally late but their numbers are excellent, I'm not going to treat that the same way as a scheduler who's late and whose production is bottoming out. Being late isn't okay in either case, and it's worth a conversation either way, but the consequences can reasonably differ when one person is otherwise performing well and the other isn't.
Remember, nobody is perfect, and most people genuinely are good and want to do a good job. If you have someone who isn't performing well, I'd recommend doing what you can to salvage the relationship first. If it's not salvageable, that's fine, but you never know until you actually try. I've seen people over the years who I genuinely thought weren't going to cut it, and after a bit of help and patience, they turned into some of the most productive people I've ever worked with.
That's all I have for you this week. I know it was a bit of a different subject, but it felt timely. I hope it helps. If you have any questions, you can email me directly at jeffb@mgeonline.com. You can also go to dentalbusinessrx.com and comment on the episode page with any feedback, I do read those. If you enjoy the podcast and want to get notified as new episodes come out, don't forget to follow or subscribe. And if you have any questions at all about MGE, you can always reach us at (800) 640-1140 or online at mgeonline.com. Have a great week, and I'll talk to you next week.