For years I have watched business owners, CEOs and managers make “people” decisions — good and bad, big and little, and difficult and easy people decisions. Often, I have been privileged to participate in their decision-making by providing advice and counsel. In some cases, I learned of the decision and outcome too late to impact the results. While most leaders can recall the ramifications of their bad choices, many haven’t analyzed where their HR decisions went wrong.
Some people are able to make effective people decisions, while others are plagued by the turmoil their choices create. After much analysis of good and bad HR decisions, I have some insight to share.
First, let’s define a “people” decision. Simply put, it is any executed choice made by a leader that impacts the organization’s human resources.
The most obvious people decisions involve hiring and firing. Those that are not so obvious — such as the decision to coach a 20-year employee with intolerable and declining performance, the decision to terminate an employee with a medical condition that cannot be accommodated, or the decision to rely on the credibility of one employee over another in a harassment investigation — are often more complicated.
I have found over the years that nearly every business problem has at its core a human resource problem. The reality is that leaders make a multitude of complex HR decisions every day, sometimes without even knowing it. And, when it comes to dealing with people issues, most of the time these leaders are operating in the twilight zone. Rarely are decisions involving human resources black and white.
Having watched brilliant leaders make terrible people decisions, I have concluded that it is not brains that make the difference between a good HR decision and a bad one. Nor does one’s longevity in a given role correlate favorably with making good people decisions.
Good HR decision-making is dependent upon some very simple, practical principles. These principles may not apply to financial or operational decisions, but they impact the quality and outcome of HR decisions. Also, although it may seem obvious, it’s worth mentioning — before you apply these principles, you must first have adequate knowledge and concrete facts about the particular matter. In the absence of relevant details, one can never make a good HR decision.
Four principles for effective HR decision-making
1. The right choice. None of the other components will matter if you can’t get this one down first. Making the right HR decision is dependent on choosing the right option for action. Example: One of your employees gets injured outside of work and presents you with a doctor’s note that includes some vague limitations. The employee says he’s fine to work. Do you (a) let the employee go back to work because he says he is fine; (b) send the employee back to the doctor with a copy of your job description, the physical requirements for the position, and a letter requesting more details; (c) terminate the employee because you have no “light duty;” or (d) place the employee on a leave of absence until he is ready to return to work? Answer: It depends! The right choice hinges on a host of considerations, such as the employee’s job duties, the medical restrictions, coverage under state and federal employment regulations, company policies, past precedent, and others.
What should you do? Get professional advice! In business, the wrong choice will cost you much more than getting the right advice. If you don’t have the experience or knowledge in human resource decision-making, be wise and ask for help.
2. The right words. This is a biggie. When it comes to executing a decision involving your people, you must choose the right words to communicate your message. As Mark Twain once said, “The difference between the right word and the wrong word is like the difference between lightning and a lightning bug.” To select the right words, consider the personality of the individual you are communicating with and take the time to determine how to communicate your message clearly, directly, respectfully, and with confidence. Stick to the facts and don’t beat around the bush, make excuses, or blame yourself for something that has nothing to do with you.
The best communicators have learned how to convey even bad news with honesty and sincerity, and without delay. (Hint: Unless you’re one of the few gifted people who always seems to have the right words at any given moment, you’ll need time to prepare your communication.)
3. The right time. This one can be difficult to control and, many times, human resource decisions must be made quickly in response to untimely events. Some of the HR decisions that we can usually control the timing of include recruiting, hiring, coaching and terminating employees; compensation changes; performance evaluations; and conflict resolution. When possible, plan to execute your decision at the right time.
Let’s say, for example, it is necessary and prudent to reduce the commission schedule for a position, and you’ve eloquently prepared your communication. The question is: when do you deliver the news? Answer: Not when the employees are looking at their paystubs with recalculated earnings!
The proper timing would be well in advance of the effective date (normally, one to two months prior).
Advance timing in this example may not be “legally” required, but failure to provide it can negatively impact morale, leading to a series of events that could be more costly than legal action. Choose your time wisely. There can be a significant price to pay if you act too quickly or delay essential action.
4. The ability to execute. This one relates to leadership experience and personality. I once had a client — nice guy — who often called for HR advice. He dealt with tough issues on a regular basis. We would brainstorm together and review all the facts and details. I would then provide my recommendations for action. I knew he was the kind of guy who needed details, so I described every point and made sure he wrote it all down. Time after time, I would learn that our strategy did not play out correctly. Why? Because (and my client would admit to this) he simply could not execute the plan. He did not have the assertiveness or the willingness to follow-through to the end. It always fell apart about halfway. The reality was that this fellow was a great technician-turned-business owner, but he did not have the will or “stomach” to implement tough HR decisions. If you cannot or do not execute on your decisions, your life as a leader will be stressful and the success of your business could be compromised. If you’re one of these people, build your team with talented people who can help you execute effectively.
In my experience, I have found that leaders with a void in any of these areas will be limited in their ability to develop the business. I apply these principles to every consultation, and I’m certain that if you do the same, you will enhance the quality and outcome of your people decisions.