by Steve Adubato, PhD

I was talking to a client the other day who heads up a major law firm. For years, the firm has been successful not just recruiting, but retaining, clients and customers. Their fees are relatively high, but the service they offer is first rate.

For years, the managing partner at the firm had told me that they were considering reducing their work force, but decided against it because times were good and they had gotten what he called “fat and happy.”

The people he wanted to let go were underachievers—people who just weren’t producing or carrying their weight. In fact, there was a list of employees whose names came up over and over again as people who were pulling the firm down. However, in an effort to maintain morale and communicate a message that “things were good,” nothing was done and these unproductive employees stayed on the payroll. “Don’t rock the boat,” right?

But after the fall of 2008, everything changed. The firm lost numerous clients and revenues dipped. The partners in the firm got nervous and decided after the first of the year it was finally time to act. Earlier this month, the law firm decided it was going to let nearly 100 people go. That’s right, those same unproductive employees whose names were on that list for years. It was done quickly and efficiently and according to the firm’s managing partner, “there wasn’t a single protest or objection from any partner or manager to any one of the names.” He added, “We are not going to miss a beat because these people are gone.”

Yet, he also added, “But we made a mistake. We should have done this a couple of years ago, but we avoided it. At the time, we were trying to be ‘compassionate’ to these people and their families, but we now realize we didn’t do anyone a favor given the current economy with so few jobs out there.”

So there you have it. This story could be retold in organizations everywhere. It’s one of the most difficult aspects of leadership. It is one of the hardest messages to communicate, but it has to be done and there is no right time to do it.

Often, in an effort to be “compassionate”, many leaders allow unproductive employees to stay on the payroll. But look at the message we communicate when we do this, not only to those unproductive people who stay, but to all those high producers who are left picking up the slack and feeling resentful. The company is saying it doesn’t matter how hard you work or how much value you bring because there are no consequences for not getting the job done. So why then should a top notch employee bust his butt for an organization that doesn’t treat him any differently than that guy down the hall who has been dogging it for years?

I am not advocating that leaders look for people to fire and put on the unemployment line in this horrible economy. However, avoiding the need to take a hard look at unproductive team players, coaching them to improve and, if they don’t, ultimately letting them go, is what all good leaders should be doing. Anything less communicates weakness, promotes mediocrity and demoralizes and de-motivates your best people on your team.