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5 Problem Employees and What You Can Do About Them Small companies aren't immune from workplace behavior problems. Here's what to do about them.

By Gwen Moran

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Problem employees inevitably surface in most workplaces and small companies aren't immune. Sometimes, the problems are obvious, such as attendance issues or a failure to deliver results. Other times, a workplace harbors a problem and you might not immediately know the cause, says attorney Lisa Guerin, co-author of Dealing with Problem Employees.

As a busy entrepreneur, you'll need to make sure desired workplace behavior is clarified or reinforced for each new employee. Sometimes you'll need patience if an unproductive employee behavior stems from troubles at home. In other cases, the problems are so undesirable and worrisome, the employer needs to take swift, effective action to stave off a major loss. Here are five types of problem employees and what to do about them.

1. The Poor Fit. Bibby Gignilliat, 51, chief executive of Parties that Cook in San Francisco, thought she had hired a winner but found her new employee's customer-service skills far from polished. "She kept saying things were 'awesome' and 'totally cool' and she would use 'like' every other word, even after repeated coaching, making a bad impression on customers," Gignilliat says.

Gignilliat's business of hosting parties with cooking classes -- for a corporation's team building exercise or as a fun event at a private home -- requires a sophisticated set of skills to be deployed all at once in the heat of the action. This capacity for deft on-the-job maneuvering is sometimes hard to glean from an initial hour or so interview.

Gignilliat now works with new employees for a three-month probationary period before determining whether she'll hire them permanently. She has also set up an internship policy to try out employees before adding them to her staff.

Employers need to make sure their expectations are clear through written policies and performance reviews, Guerin says.

2. The Disappearing Act. Sometimes, problematic behavior crops up in connection with troubles emerging in an employee's personal life. For example, several months after Pac Team America president Eric Zuckerman, 30, gave a new employee time off to recover from injuries in a car accident, she was arriving late to work, leaving early, and sometimes sneaking away at midday for long naps from his Paramus, N.J., merchandise display company. After unsuccessfully trying to discuss the problem with her several times to find solutions to accommodate her, he eventually had to fire her.

Spotty attendance might signal any of a range of issues, from a problem at home or job dissatisfaction, Guerin says. Talk with your employee privately to find out if she has encountered a difficult personal problem or faces a life transition, such as a relationship breakup or an ill parent's turn for the worse, and express sympathy. You might want to refer the worker to an employee assistance program if your health-insurance plan offers one as part of its package, she says. Or you can enlist an EAP provider to create such a program for your business. An EAP provider might offer counseling services by phone for as low as $18 an employee a year. (Check a national directory at To learn more about EAP programs, consult the website of the Employee Assistance Society of North America.

Remember: Employees with a personal or family health issue may be eligible for certain types of leave, depending on the situation and the workplace's state.

If your talk with the employee uncovers an underlying dissatisfaction with your company, consider if he is raising a workplace practice that could bear some improvement. Perhaps the vacation policy hasn't been clearly laid out, and with summer approaching, he is becoming resentful. But if the chat reveals deep-seated dissatisfaction, perhaps the employee needs to consider adjusting his attitude or if the job is a good fit. You may have to remind the employee that chronic and unexplained absences will be treated according to your company's written attendance disciplinary policy.

3. The Scofflaw: Randy Cohen, 46, thought he had hired a new employee who fit the energetic, open culture of his Austin, Texas, ticket brokerage, TicketCity. But soon the employee routinely ignored policy and procedures. Cohen found himself constantly correcting the young salesperson's behavior so that he didn't alienate customers. "He made the company a bunch of money, but he was a pain," says Cohen. Over the past 21 years, Cohen says he's had other employees who've bucked the rules, including drinking on the job.

Cohen now has a policy of "firing fast" when he finds an employee who isn't willing to follow rules. Legally speaking, an employee who engages in reckless behavior, such as driving dangerously or drinking on the job, can leave the employer liable for the actions within the "course and scope of employment." So, if you learn that an employee is behaving in a way that could put others at risk, immediately investigate the situation and impose discipline, if appropriate, Guerin says.

4. The Sour Apple: Negative employees who bad-mouth the company and its leadership to fellow employees and even customers can disrupt morale. Cohen found one in his ranks after learning about the naysayer from other employees. Eventually the person left the company, but he says he wouldn't be as tolerant again. "Someone like that can really hurt morale," he says.

Guerin suggests a frank discussion with negative employees. Avoid discussing personal characteristics, such as "you're irresponsible and negative." Instead, state the problem and then explain why it has to change. For example, "You complain about customers and work responsibilities. This is hurtful to customer relationships and morale and needs to stop. If you have a problem with your job or co-workers, follow our resolution policy for these issues."

Discontented employees who bad-mouth the company and its leadership to fellow employees and even customers can take a toll. Any small company might, as part of its growing pains, have a slipup that's more apparent to workers inside the company than outsiders. But excessive public grousing by an employee needs to be stopped.

5. The Filcher: Regardless of their diligence in pre-hire screening, employers occasionally discover illegal activity by their employees. Vonda White, 46, recalls having an unsettling feeling about an employee at her Tarpon Springs, Fla., insurance-brokerage firm Collegiate Risk Management. He demonstrated a negative attitude and seemed distant in his day-to-day dealings with her. Eventually she discovered he had copied the company's database and was trying to help a friend launch a competing company, White says.

Whether there is an increase in shrinkage, the cash drawer doesn't add up, or an employee is stealing valuable information, theft can threaten your company's bottom line. Approach employee theft cases as whodunits -- the evidence points to a problem but the culprit needs to be found, Guerin says. You may need to supervise employees more closely or install security systems to prevent theft. White installed software that prevents employees from copying large or multiple files. "Depending on the size of the theft, it might make sense to talk to a lawyer or loss management specialist to decide on a strategy," Guerin says.

As a general rule, direct, clear communication is the key to dealing with most employee problems, says Guerin. Once you discover a problem, it's critical to take action instead of letting it fester and get worse.

Gwen Moran

Writer and Author, Specializing in Business and Finance

GWEN MORAN is a freelance writer and co-author of The Complete Idiot's Guide to Business Plans (Alpha, 2010).

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