Small Biz Advice: Employee Meltdown


Holly Howard runs Ask Holly How, a small business consulting company based out of Williamsburg, Brooklyn that works with a wide variety of businesses from restaurants to retail to art studios and pretty much everything in between. Her clients report increased income and profit, decreased expenses and a significantly better quality of life. Holly also heads up the Small Business Book Club at McNally Jackson Books and teaches business classes at The Yard in Williamsburg.

Got a question for Holly about running your small business? Email her and she’ll address it in her next column:

Dear Holly,

I own a clothing boutique with roughly 15 employees. My business is growing fast and recently, I started implementing more structure to my business and holding people accountable for their performance at work.

I have a tough meeting coming up this week with an employee who has worked here since the very beginning when we were much less structured and really let things slide. This particular employee’s stress level has always been a problem and it’s been addressed many times.

This past week, one of my managers reported that this employee had a meltdown. When I contacted the employee to set up a meeting to address the incident, he started harassing my manager for reporting his poor behavior.

How do I address this problem and take corrective action without furthering the drama?


Growing Pains


Dear Growing,

I love that you’re bringing this here. Scenarios like this can have a significant impact on company morale and become very draining the longer you let them linger. Often times we shy away from confrontation and as business owners, we fail to accept that if we don’t address these sticky situations, they can completely undermine our authority and discredit us as leaders.

The fact that you’re taking action now to nip this in the bud is excellent and though it might feel uncomfortable to deal with at first, the more you work at it, the easier it becomes. In order to avoid drama, stick to the facts and don’t make this personal.

First, you want to make sure that your personnel policies are clear. I recommend to all of my clients, and anyone who is running a business, that they have an employee handbook. Generally, a thorough employee handbook includes a section called “Standards of Conduct.” In this section, you as the employer will list all of the behaviors that are considered inappropriate or unacceptable in the workplace. And here is where you make it clear that corrective action will be taken if an employee engages in any of these behaviors you have deemed unacceptable. Harassment surely falls into this category.

Second, collect your records. You mention that this particular employee has been a problem in the past and that you have addressed it many times. If you have kept a written record of these past incidents, you can use it to build your case for taking corrective action. If you haven’t kept written records of personnel issues, start today. It is incredibly important to have documentation. Having the facts at your disposal is invaluable when it comes to making a case for taking corrective action with an employee.

Third, when you meet with this employee, I would reinforce the leadership of your management team. It’s challenging when a business grows and the leadership team evolves. An employee who has been there prior to this manager’s promotion could have a particularly hard time respecting these new boundaries. You as the owner want to reinforce this new structure and emphasize the authority that this particular manager has. (For more on how to help your managers take on responsibility, read my column “Being a Better Boss.”)

Fourth, follow your policies. Again, here is where having an employee handbook is so valuable. This is the blueprint for how you go about taking corrective action with an employee whose behavior you deem inappropriate. It makes it much less personal and much more professional if you have clear policies laid out for corrective action. You can simply follow the guidelines that you all agreed on when this employee was hired. If you don’t have this in place, use this opportunity as a catalyst for implementing written policies in the future.

Finally, and most important, don’t compromise your values. It can be incredibly challenging when we grow a business and start start implementing policies and procedures and working towards our goals. It’s especially challenging when we shift our culture and we have people who have started with us who aren’t able to adapt to that shift. It can become confusing and we tend to shy away from addressing the conflict that arises even if it means compromising our newly established values. But stay firm and don’t let things slide any longer and you’ll be sure to find employees who are eager to follow your policies and connect to your values.

Good luck with your meeting. Remember that if you want to avoid drama, stick to the facts and don’t make things personal.



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