Rules for Managing Marginal Credit Employees

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We all recognize that people are our most valuable resource, but many of us get caught up in the unproductive process spending more time than we can afford coaching, training, teaching, and nurturing substandard employees. I am not suggesting that the credit department become a place where an employee who needs a little extra help or training cannot get it. Instead, I am suggesting that credit managers must know when to cut their losses. To assist in this process, I believe credit managers should adopt the following rules:

New employees should be evaluated at the end of their first 30 days, rather the standard 90-day probationary review cycle. If they are not up to the task, it is better for the company and for the department's morale to cut your losses early.

When an employee fails to meet the credit manager's expectations, the matter of that employee's continuing employment must be considered pragmatically and unemotionally. It helps to remember that it is the credit manager's duty to the company to make certain they have the best possible in every position.

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The credit manager should confront the employee, and should be specific about their shortcomings. A specific plan of action should be agreed upon and goals established. Of course, you must give the employee sufficient time to make the necessary changes.
The employee should be told that if the goals are not met, he or she will be terminated.

Inept, disinterested, or incompetent employees create a negative force within the credit department. They can devastate morale. They can alienate customers, and they can embarrass the credit manager. Substandard employees should be advised of their weaknesses, given the chance to improve, and when necessary terminated either for cause or based on their "at-will" employment status. This approach offers two advantages.

It ensures that the credit department staff is made up of employees who are caring, committed, professional and competent.
It demonstrates to anyone who happens to be looking that you as the credit manager will not tolerate substandard performance in anyone.

Equally important, go out of your way to recognize your best and brightest employees. Unfortunately, they often get overlooked in the shuffle.

Editor's Note: The above article originally appeared in the Credit & Collection Manager's Letter, a newsletter purchased by Credit Today in 2006. This article originally appeared prior to 2000.