In my book, The Complete Mortgage Management Kit, I define five rules of management:
1. Hire the right people
2. Fire the wrong people
3. Tell the right people what their jobs entail
4. Give the right people the tools necessary to do their job.
5. Monitor, but get out of the way.
Clearly, the most important rule is to hire the right people. If you hire the wrong people, you will never be a good manager. End of conversation.
However, sticking with the wrong people can be just as devastating to your business model. The cost you will incur entails more than the results of poor performance. Managers think they are all powerful, but they are not. Sticking with poor performers represents your greatest impediment to implementing your recruitment plan. A manager tends to spend up to 80 percent of their time supervising the wrong people and the opportunity costs they incur as a result are very, very significant. These costs include lost time and additional stress. Just to accomplish something that is impossible: trying to make the wrong people into the right people.
Why is it so hard? Because of the great myths of employee development:
►Myth #1:They are not succeeding because I am not a good manager.
At the worst, you have not truly defined the job so that you do not have a good handle regarding why they are failing and by how much. At best you have hired the wrong person for the job (see Rule Number One).
►Myth #2: If I ignore the problem it will go away or become better over time.
Even the worst performers have bouts of efficiency that will enable you to justify this statement. Performance problems do not fly away. Yes, you might retire first. More likely they will quit first because they are as miserable as you. How many times were you relieved over a resignation? This is a bad sign! Remember leaders are proactive. Anytime you go to the office in hope that the employee will make this decision for you, you have already wasted much too much time. Want another bad sign? I know managers who have called loan officers and asked them—do you still work here anymore? If you have to ask—they are either not working or working somewhere else.
►Myth #3: They are just in the wrong position.
Do you have a job they can do adequately? Then make the move! Don’t transfer them to another division and make them someone else’s managerial problem.
►Myth #4: But dealing with problems is my job as a manager!
No, eliminating or preventing problems is your job. Who said that managers need to hit themselves on the head with a hammer to become successful?
►Myth #5: If I can just get them to do this or that right, they will “cut the mustard.”
Yes, if you coach and coach and coach, they might become adequate. They will never become peak performers. Your success will be dependent upon how many peak performers you have. Anyway, how does one cut the mustard?
►Myth #6: If I have too many peak performers, won’t one of those whippersnappers go after my job?
Yes, they will. After you are promoted or you expand your company. The more peak performers you have, the better your unit will perform and the more likely you will be promoted. If not, one of them will pass you by!
It is absolutely true that offices with top performers will attract top performers. People who excel understand the need to be surrounded by others from whom they can learn. They also like a challenging environment. So just keeping less-than-mediocre performers around will hamper your recruiting efforts not only by using up your most precious resource—time—but by creating the wrong environment.
Should I just go back to the office and fire someone?
We are not usually in a position to do this, because you have not dealt with the problem adequately. If you have been ignoring the problem for two years, you cannot just come in and make a move. Your company probably wouldn’t enjoy the legal liability of a Valentine’s Day Massacre. What you would like to do is to make up your mind to take the steps necessary to bring the problem to a closure. Make the commitment and then act! Moving to Rules #3 and #4 will help you do just that, because these rules deal with the correct creation of expectations and making sure that you and the employee are fulfilling these expectations.
Dave Hershman is a top author in the mortgage industry with seven books published, including The Complete Mortgage Management Kit. Dave is also director of branch support for McLean Mortgage. He may be reached by e-mail at Dave@HershmanGroup.com or visit OriginationPro.com.