Addressing Performance Problems

One of the hardest things to do in managing an insurance agency is the process of leaving the insurance-technical side of the game and paying attention to the business of business.

When an employee has performance problems, attitude problems, or personal problems that affect his/her performance or relationships within the agency, the way you manage the process of solving those problems often defines the difference between mediocre managers and great managers.

Performance problems involve doing one’s job incorrectly through lack of training, lack of care or through lack of personal management.

Attitude problems can reflect themselves through attendance or lateness problems, conflicts between employees, conflicts with clients and conflicts with management that might break the barrier between honest disagreement and insubordination.

Personal problems might include medical, emotional or other issues that stem from life away from the agency that are brought into the business and cause further attitude or performance problems as a result.

If overall performance in the agency is affected by any or all of these categories of issues, it is incumbent upon the manager to follow a distinct course of action that will result in solution of the problem or in termination of the employee. With the exception of gross insubordination, problem solution is always the desired course of action in an agency. Gross insubordination to a manager, owner or customer is a cause for immediate termination (but it is always safer if that statement appears in the Employee Manual or Handbook).

The course of action is actually based in moral right and common sense, but it also documents the agency’s efforts to help the employee before taking any radical action. This documentation eases any legal ramifications of a termination by showing that the agency took every possible action to avoid that end-point before firing an employee.

Everything starts with a notice to the employee that performance has been negatively affected by his/her action. This can be done verbally or in writing, but should always be done through a personal meeting (Remember – Public Praise / Private Criticism). That Performance Meeting should have two people representing management to be most effective, the employee’s manager and the manager’s manager (or another manager). If a female employee is being criticized by a male manager, a female manager should be present, if possible. The second manager is not to take a speaking part in the meeting – (s)he is there as a documenter and witness to what transpires. The second manager should document all that is said at the meeting (paraphrasing, not verbatim) to be put in the employee’s file.

A Performance Meeting is held immediately after a problem occurs in the employee’s performance. If performance problems have been going on for a while and a number of issues are brought together that must be addressed, an Interim Evaluation (rather than a Performance Meeting) is conducted. The difference between the two is that an Interim Evaluation is more formal (with a copy to the employee) and, often, an Interim Evaluation is given to an employee for a positive change in work habits, not just for negatives.

Whether verbal or written, Performance Meeting or Interim Evaluation, documentation is inserted into the employee’s file. The result of any employee meeting resulting from negative performance is a Performance Action Plan, a 30-day plan to solve the employee’s problems. The Action Plan will include the activities necessary to solve the problem, how the employee and his/her manager will change the performance, a measure of success and a time for another meeting.

If performance issues continue, management does not have to wait for the target meeting date to again confront the employee with the continuing problem. However, if the employee reacts well to the Action Plan, his/her file will reflect the positive change during the next scheduled meeting on the subject.

If performance issues continue to plague the employee or if the Action Plan does not solve the problem, a Probation Warning is provided (at the scheduled meeting date or before, if necessary) giving the employee 30 days to solve the problem or face termination.

Recurrence of the performance problems results in termination of the employee.

Using this routine (amended to adhere to any state-specific rules or guidelines), no employee is surprised by an impending termination and the manager and employee has a number of (witnessed) meetings to discuss and to try to recover performance before a termination is enforced.

Not using this routine will cause poor morale, agencies in conflict and potential lawsuits. Performance problems tend to drag on (sometimes for years) before one or the other of the employee or manager/owner become so tired of the situation that a parting occurs.

Using this process, an employee is shown the ‘handwriting on the wall’ if (s)he is not performing up to the expectations of the agency (whether or not they agree with the performance appraisal). The employee may very well leave on his/her own accord rather than face termination without the negative ramifications of a termination to both the agency and to the employee.

A termination (whether justified or not) always causes immediate bad feelings. Former employees may subvert the agency as a rationale regarding the termination. This may affect the agency’s image and relationship with clients, carriers and other agencies. However, employees who leave for “better opportunities” who know that the agency has substantiated performance issues in file, may find that ‘no comment’ about their prior employer may be better for the former employee than negative reflections about them.