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Thursday, November 15, 2007

A Big Hiring Mistake

Dear HR,

Tell me what you would do in this situation? My husband owns a company. He recently hires a CEO under an employment agreement for the period of one year at which time they would reorganize the company into a partnership.

My husband retains ownership and the position of the president of the Co.and is the CEOs employer. The CEO has worked for the Co. for aprox. 6 weeks. In that time he has alienated all of the employees to the point that they are ready to leave the co.

The IT person, who will also be a 10% partner says that he does not want to be in partnership with the CEO. The bookkeeper says that he is a bully, is unprofessional and does not have the skills to manage. The data entry person says that he talks down to her and encourages her to look for other employment.

He has stated that the employees are paid too much and he is paid too little, that my husband is not the boss, he is, throws tantrums and gives directive when he tries to make decisions without gaining all of the information, and generally does not listen to my husband or other employees concerning the business.

He has made statements about my husband to undermine his reputation and authority. My husband would like to fire him but is concerned that he has not given his enough time to learn the industry. What do you think.

I think you should get a lawyer and figure out how to fire the guy. I don't know what kind of employment agreement you have signed, but you better hope it's not one that will require you to give him a good chunk of the business to get rid of him. Get to a lawyer, now!

You are also concerned that you haven't given him "enough time to learn the industry." None of the problems you've mentioned have anything to do with a lack of understanding about the industry. They all have to do with a lack of understanding about managing people. You do not want a CEO who does not understand how to manage people.

One of the big mistakes managers make is not recognizing that they've made hiring mistakes. You hired him, so you must be able to fix it. Bah! Part of the game of being a CEO is playing without a net. You can't do the job and you are out of there.

Get rid of him. I just hope it doesn't cost you a fortune.


Daniel said...

A lawyer here will be essential, particularly because she talks of a "1 year" agreement. Hopefully, there are some escape clauses that allow the company to take action.

If not, a negotiated departure may still be a viable option but getting legal counsel as to how to do it the right way is key.

Just another HR lady... said...

Was the original agreement written or approved by legal counsel? If so, there should be a clause in the contract in anticipation of this very situation.

If not, seek legal counsel ASAP, and find out what it's going to cost (a lot!) to terminate this person's employment. I haven't seen very many executives last anywhere who are tainting or undermining the presidents/owners reputation.

JKB said...

Get a lawyer NOW! Not only is this a bad hiring decision your story tracks several I've read where a new partner usurped the owner and took the business.

He is alienating staff, encouraging them to leave and undermining the owner. Next step, hire those loyal to him and then ease out your husband. That is if he doesn't just milk the CEO wagon awhile and then leave a broken company with no old hands to build it back up.

Wally Bock said...

Presuming that you've described things accurately, everyone so far is right about the firing and the need for counsel. But there's more going on here.

Your husband needs to figure out where his due diligence failed in the process of bringing the fellow on board. What you're describing is the kind of behavior that usually shows up and lunch when you see someone browbeating the server.

In between your trips to the attorney, have everyone involved in the hiring of your problem sit down in a room with a third party who knows a bit about business and group dynamics. If I were that person, I'd first want to know why you went outside for talent.

Is the company in trouble? Was the new guy seen as a savior and therefore was brought on board without vetting him? Why was no one in the company involved in the decision and process of bringing the fellow on board?

My experience as a consultant tells me that there's something broken here. If you don't fix it, lots more nasty problems like in wait.

Blogger said...

I believe that it takes time and passion for one to establish his or her own business. Giving all the rights to an outsider, whom you say has not gained proper understanding is not a wise decision. Now if the situation is that you are not happy with his work, will call for a proper understanding and a quite Exit.
Tell him what you expected from his end and where all he has lacked.
Ultimately you are the owner and has equal rights. If he doesnt want to get into some legal actions, ask for his demands and justify them and make a quite exit.

Hope it might help you.

Amit Bhagria