The first step toward solving this simple and painful problem is coming to the realization that it is a false dilemma. The decision should not boil down to keeping or firing a difficult employee. In fact, the manager should avoid engaging in this line of thinking in the first place. The real question a manager needs to ask is "have I done everything I can to help the difficult employee?" Based on my work with manager at all levels, the answer to that question is usually a resounding 'no.' Here’s what I mean.
Most managers—including me during much of my career—react the same way when they come to the realization that one of their people is a problem. First, they find someone to vent to about it. Usually to a colleague, sometimes to a subordinate, and almost always their spouse. On a courageous day, they might make a subtle comment to the difficult employee, or if they’re timing is lucky, be able to include something in an upcoming employee review. What they rarely do is sit down with that employee and tell them, in no uncertain terms, that their attitude needs to change.
As ridiculously obvious as that sounds, and as much sense as it makes to anyone who has ever coached little league or parented a child, it rarely happens. Whether it is a CEO dealing with an arrogant or condescending VP of sales, a pastor managing a rude church receptionist, or a school principal hearing complaints about a caustic teacher, very few leaders have the guts to directly and unequivocally let a difficult employee know that their behavior is patently unacceptable.
This is understandable given that in many of these situations the employee in question is somewhat of a peer to the leader. No one relishes the idea of having to give a colleague bad news, especially when that news has to do with their personality or behavior. And so it is not surprising that leaders often hesitate, procrastinate, even abdicate their responsibilities, hoping that the situation will somehow change on its own.
But it rarely does, and the complaints continue, and that’s when the false dilemma starts to emerge and leaders feel like they have to make a "buy or sell" decision. If they fire the employee, the consequences aren’t pretty—there is the potential for a lawsuit or expensive severance, not to mention the possibility of a morale problem among the people who liked the employee or never saw the problematic behavior. And then there is the loss of that person’s production and the need to hire a replacement. On the other hand, if the leader decides to keep the difficult employee, there is the inevitable morale problem among the people who experience the poor behavior, and the loss of credibility that the leader will experience for not having the courage to make a hard decision.
And so the manager engages in a stressful and fruitless calculus exercise, constantly trying to estimate and mitigate the damage that either decision will create, all the while watching the stakes grow and grow with every passing day. What that manager needs to do is as fool proof as it is difficult: inform the difficult employee that he is being, well, difficult, and continue to remind him again and again and again until one of three good things happens.
In the best possible scenario, the employee gets so tired of the manager reminding him how difficult he is that he changes his behavior. This is certainly what any manager would prefer, but it cannot happen without honest and incessant communication. In the next best scenario, the employee gets so tired of the manager reminding him how difficult he is that he decides to leave the organization. This allows him to take action on his own terms, and it avoids the stress of lawsuits and the cost of severance.
Even the third and worst case scenario is preferable to the false dilemma that managers put themselves in. If the difficult employee decides he will neither change his behavior nor leave the organization, then the manager needs to let him go. Though it may still be somewhat painful, the manager will be able to act with relatively little guilt, knowing that he did everything possible to achieve a better outcome. That will go a long way toward helping employees feel good about the situation, and reduce the possibility of lawsuits that come about when a difficult employee is surprised.
But perhaps the greatest outcome of choosing the direct approach will be the message it sends to the rest of the organization: we have standards of behavior, those standards have consequences, and your leader has the courage to enforce those consequences. That is something that any leader, in any organization, in any era, should be able to appreciate.