From the November 2004 issue of Entrepreneur

Jeanne Achille decided it was time to hire a new college intern for her small PR firm in Shrewsbury, New Jersey. Little did she know she was hiring the intern from hell.

His first morning on the job, the intern said he expected to deal directly with CEOs. He made unapproved phone calls as well as computer mistakes. The final straw came when he started telling full-time employees how to do their jobs. The company let him go after only one day.

The experience happened a few years ago, but the memory is still fresh. "By 11 a.m., people were getting upset," says Achille, president and CEO of The Devon Group, which has annual sales surpassing $2 million. "It was a disaster."

Internship programs provide a cheap labor source and are a handy recruiting tool. But as Achille, 47, and others have learned, some interns can be more trouble than they're worth-especially when they don't show up for work, refuse assignments or have the interpersonal skills of a 2-year-old. Handling the carnage bad interns leave behind creates headaches for company leaders who choose to grin and bear it.

"You usually have to mess up badly and frequently to get fired as an intern," says Steven Rothberg, founder and president of Minneapolis-based career site CollegeRecruiter.com. Instead of firing an intern on the spot, he adds, "companies tend to say '[The intern's] done in three weeks.'"

Hire Right

Alex Ramsey is CEO of LodeStar Universal, a management consulting and marketing firm in Dallas with annual sales of about $1 million. While most interns have been assets, a few have been challenging, like the intern who dressed inappropriately and chewed gum all day. Ramsey asked the intern to stop chewing gum and offered pointers for making her wardrobe businesslike. The intern took her advice, but the experience left Ramsey, 51, scratching her head. "I was shocked it didn't occur to her that this [behavior] was unprofessional," she says.

It's easy to focus on the cost savings interns provide, but don't forget the hidden costs. "Too many entrepreneurs relax when hiring interns," Rothberg says. Interview interns the same way you would anyone applying for a permanent job. Check references, ask for school transcripts and hold competitive interviews so applicants know you mean business. Avoid interns who are unrealistic or unsure about their career goals, can't provide at least two professional references, and lack basic manners, says Larina Kase, president of Performance and Success Coaching LLC in Philadelphia.

Now, Achille asks to see finished school projects when she interviews potential interns. She also meets the professors responsible for college internship programs to see what's expected of the student and the employer. "I can't over-emphasize this enough: There's basic paperwork you may not be aware of," she says. "And you gain a better understanding of the students you might get."

Ramsey asks interns to sign a "letter of agreement" that lists up to 10 duties the intern will have. They go over the list together, and it puts expectations in check. They also talk about how they'll be upfront with each other if things don't seem to be working out. "Good communication is a good idea," Ramsey says. "Start with the end in mind."

Getting in Sync

Like any employee, interns want to learn and grow. Make sure managers and employees see interns as an investment instead of a burden, and create an orientation process followed by day-to-day managing, coaching and mentoring. A manager should spend five to 10 minutes every day going over things with the intern, and there should be a formal progress review once a month that includes feedback from co-workers. "Entrepreneurs need to take a look at what they're trying to achieve with interns," Achille says.

Give interns clear goals and a few perks to keep them motivated, depending on their interests. Designate a point person in the company they can go to whenever they feel lost. Achille and Ramsey pay interns, something they both feel is important to morale and to teaching young people about the working world.

If an intern upsets employees or customers, decide whether the mistake merits a second chance. Discuss the problem as soon as possible with the intern, and keep in mind that this person is there to learn. The pivotal question is whether the intern is willing to correct his or her behavior so the mistake doesn't happen again. If not, then maybe it's time to let the intern go.

An internship program can pay off, but you'll need to have some patience to handle rough patches. "Once you fine-tune your [internship] program," says Achille, "it can be a positive experience."