It's easy to let the situation fester. But without feedback, incompetent employees overestimate themselves even more, according to Dunning. "These people need a strong external push," he says. Meet privately with them, and be prepared for resistance. "They will argue back with their positive qualities and why they should keep doing a task," Dunning says.
You'll need to back up your arguments with concrete evidence. Show the employee examples of good work, and explain what you expect. Keep the focus on performance, set benchmarks over a specific period of time, and use 360-degree feedback. Offer training, too. If you have an employee who insists on writing company reports but lacks competency, explain why you can't use him or her on the project and offer some training. "If you have to give the project to someone else, explain that it's a hard decision and say 'This is what I want you to work on,' " Dunning says. "Opportunities for training are important."
These overconfident types, however, may not see the need for training. In fact, Frank Shipper, a management professor at the Perdue School of Business at Salisbury State University in Salisbury, Maryland, warns that incompetent employees who can't see their deficits may just lead you around in circles. "Even when you're blunt, they won't see it," Shipper says. "It all hinges on the employee's acceptance of the problem." If all else fails, it may be better to cut your losses. "You just can't save some people from themselves. Entrepreneurs can work too long trying to fix things."
Smith's solution was a 45-day review period along with grammar and computer classes at the company's expense, a proposal the employee found insulting. Instead, the employee wanted a raise, a personal assistant, a new computer and more responsibility. "In her mind, she was a great writer and communicator who had a college degree," Smith says. "She simply couldn't see the need to improve."
Not long after, the employee told Smith she was looking for another job, and the two mutually agreed that it was time to part company. "It's sad," says Smith. "But at the end of the day, you have to make good business decisions for your customers."