How to Identify and Deal with Toxic Employees Before It's Too Late

Saying that running a business is hard work is, as you likely already know, a bit of an understatement.

As a business owner, it can often feel like you're not only in control of a massive freight train, but that you're also racing to lay down the tracks ahead mere seconds before the whole thing derails.

One of the elements that is supposed to help you make this process easier is your employees. Together, they function as something more powerful than any one of them could be individually -- thus supporting and empowering your vision in a way that you wouldn't be able to do on your own.

Or at least, that's how things are supposed to work.

When you get yourself in the unfortunate situation of hiring a toxic employee, things can get ugly -- fast. It is very much a scenario where "one bad apple can spoil the bunch," and it's something that you definitely don't want to deal with. Below are some steps that can help in dealing with a toxic employee -- both from a morale perspective and from a legal one, too. Used properly, these tips can help make sure your proverbial train keeps running and that your long-term business strategy is properly executed without delay.

Spotting a Toxic Employee: Breaking Things Down

Experts agree that if you really want to spot a toxic employee, there are a few key factors you'll want to watch out for.

The first key clue is any employee who is overly self-centered -- in other words, someone who only cares about themselves and not the important job you're asking them to do on a daily basis. Most of the time, toxic employees will have absolutely no self-awareness and will continue to act in selfish ways, not knowing (or caring) how their behavior is negatively impacting others.

Another quality to watch out for is excessive overconfidence. The problem here is that these employees tend to be highly productive -- which can cause their behavior to go unaddressed. This may mean positive things for your bottom line, but it can be absolutely detrimental to the morale of others.

If one of your own people meets one or even both of those characteristics, the chances are you're dealing with a toxic employee, and you should absolutely do something about it.

Addressing Toxic Employees

At this point, you have two options available to you: You can address the toxic nature of the employee in question, or you can let them go permanently.

To speak to the former, as a business owner, you should always try to step up into a mentorship position first -- if you have the time, that is. If the employee is exhibiting toxic behavior because they're going through some type of personal issue, see if you can lend a hand and help make things easier. If the issue is that they need more training, do what you can to provide that.

The person will need to be receptive to all this, however, which isn't always the case. If someone is surprised that they've received a "toxic" status and shows a willingness to try to correct the problem, by all means, embrace it. If they're not, it will likely be better to fire them -- especially in the short-term.

If you want to fire a toxic employee without creating more morale and/or legal issues for yourself, there are a few key steps you should follow:

1. Make sure that you bring up the issues with the employee first, at least once. Give them a chance to correct things on their own and only take action if he or she leaves you no other option.
2. When you actually sit down to fire someone, make sure that there are at least two people in the room when you do. You need a witness -- especially if the toxic employee decides to contest their firing later on.
3. Explain to the toxic employee what the problem is in great detail. Bring up specific instances where their behavior has had a negative impact on others, or when they acted against the best interests of your company.
4. Acknowledge this person's accomplishments, as that's probably what they're going to do, too. Make it clear that this is a decision based exclusively on their behavior and not on their performance (if that's the case).
5. Present as much written documentation as you can. Back up everything you're saying in a cold, calculated way. Do not get defensive and when the actual moment of termination comes, do so in the most straightforward manner that you can.

Nobody wants to fire an employee -- and firing a toxic employee can be especially difficult for even the most seasoned business owners. Sometimes, however, it is absolutely necessary for the greater good of your company and team if nothing else.

By identifying and dealing with toxic employees before it's too late, you at least give both you and the employee a chance to avoid this type of early termination. But if you have no other choice, you need to do what you must -- the long-term success of your business depends on it.

The above are best practices and not meant to serve as legal advice. Always consult an attorney to discuss your unique situation.

Martinez & Shanken, PLLC writes for CountingWorks, an accounting news and advice website. Reach the firm at [email protected]

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