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Summary
For those of you who skip to the end of the story, (c’mon, it’s a fun story!) here’s the key points right at the top:
Employment agreements are critical to create clarity for employees and protect your business.
While there are many important pieces of an employment agreement, here are the top elements you must include:
Now, let’s dive into the story (practical application).
It’s been an awesome year. Your business has been growing steadily and it’s finally time to hire an office manager to take on the day-to-day, so you can focus on your area of genius.
At dinner with a friend, you told them about your growth and needs.
“That’s great – you know, a friend of mine was telling me about Bob, an experienced office manager looking for their next opportunity. .. “
Badda bing badda boom! Introduction made. How easy was that? An applicant before you even posted the job!
A couple days later, the candidate, Bob*, arrived for an interview. It went incredibly well, so you verbally agreed to the details and hired him on the spot.
Tip 1: Have a structured hiring process that weeds out the C-players. (We will write about this in the future)
Monday morning rolls around and you’re waiting for Bob to arrive for his first day of work. Hours pass with no sign of Bob, so you decide to call him and make sure everything’s ok.
“Hello?” Bob croaks sleepily.
“Hey there Bob, I’m calling to see if you’ll be coming in for your first day today.”, you respond.
“Umm, didn’t I tell you, I need a couple weeks before I start. I’m on vacation.”
“Oh, okay. When are you back?”
“In two weeks.”
“So I’ll see you in 2 weeks on Monday morning.”
“Yeah, sure.”
Well, that was disappointing. Clearly there was a miscommunication somewhere. You’re sure you communicated the start date when you created your verbal contract, but maybe something was lost in the details.
Key takeaway: While verbal contracts are contracts, there’s too many opportunities for miscommunications. Always have a written, signed employment contract with a clear start date.
After that rocky start, Bob showed up as expected and spent a couple weeks learning all about your business.
On payday, you had a knock on your office door.
“Hey Bob, what’s up?”
“Well, there seems to be a problem with my paycheck.” stated Bob.
“Oh? I’m sorry about that. What’s the problem?”
“I did the math, and expected to be receiving more on my paycheck. The base is lower than I expected, and I didn’t get any commissions.” Bob said.
“Well, we don’t pay commission until after your probation period has ended. Let me look into the base pay issue.” You replied, trying to stay calm.
His courage building, Bob said, “While I’m at it, I haven’t received my benefits card and I need to see the dentist.
“Bob, benefits don’t kick in until after your probation period. Clearly we have a disconnect here.”
Bob stormed out of your office.
Key takeaway: Employment agreements must include all details on pay, commissions and benefits. These elements should be reviewed, in detail, in the onboarding process as well to ensure there’s no misunderstandings.
One Thursday evening, after staying late, you looked around the office. Things sure seemed a lot less tidy than you’d like.
As you walked around, you found the garbage full. The kitchen was a mess; the dishwasher was not filled.
Huh, that’s Bob’s job. I wonder what’s up, you thought. I’ll need to talk to him tomorrow.
The next morning you stopped at Bob’s desk for a quick chat.
“Hey Bob. I was here late yesterday and noticed that the kitchen was a mess and some of the other tidying around the office wasn’t done.” you said.
“That’s not my job. I don’t clean.” Bob responded tensely.
“What do you mean? That’s part of the responsibilities of the Office Manager. I was clear about cleaning when you were hired.” You replied.
Over the next few weeks, the cleaning was done sporadically. On multiple occasions you reminded Bob of his responsibilities.
Key takeaway: A clear job description, including responsibilities and expectations, should be included with every employment contract. That way there’s clarity on exactly what’s expected from employees.
Bob’s attitude shifted after discussing his duties. He went from cheerful to sullen and downright lazy. He started making snarky comments to other employees.
Even more concerning, other employees he worked closely with were showing a change in attitude as well.
Bob had become .. toxic.
It was time to do something about it.
Culture Tip: Tolerating toxic players is one of the worst things you can do. Deal with toxic attitudes quickly and effectively. Protecting your culture and team is one of your top priorities.
It was time to let Bob go. You called him to your office and had him close the door.
“Bob, I’m afraid this isn’t working out.” you started.
Bob looked deflated and resigned to his fate.
Over the next 10 minutes you explained to Bob that despite letting him know multiple times about his performance issues, nothing has improved. As a result, you are terminating him today without severance, for cause.
Something shifted with his body language. He squared his shoulders and stated, “I’m going to sue you for wrongful dismissal!”
Key takeaway: Your termination process needs to be clearly defined in your employment contract.
Over the next couple months, you couldn’t escape the wrath of Bob. Well, really his lawyer. With the help of your lawyer, you were able to settle out of court.
WHEW!
It only cost you $9,000 in lawyer’s fees and $5,000 in severance (read: Go away money).
More importantly, it cost you two months of headaches and constant stress. It took your focus away from building your business while you dealt with this ridiculous lawsuit from a terrible employee.
If only you had a proper employment contract in place with Bob in the first place.
It’s vital that you have a proper employment contract in place with every employee at your business. The contract should include all the details surrounding employment, including:
Thankfully, RascalHR makes the process of creating job descriptions, employment contracts and your policy manual simple. In minutes you can generate everything you need to protect your business and create clarity for your team. Contact us for more information.
* Bob is a completely fictional character. We will be using him and picking on him throughout these blogs. If your name is Bob, this story isn’t about you. Do NOT hire a Bob!