Dr Jeff Cornwall

We had an interesting debate in my MBA class about the role of culture in hiring and firing employees in a small business. While the case for using culture in hiring is fairly straight forward, it is the issue of termination that seems to make some uncomfortable.
The culture in a small business starts with the values of the owners. Each decision she makes, each action she takes shapes the culture of her business. Over time her values will become part of the shared understanding of “how business is done around here.”
But as a business grows, the people who join the business bring their own values and behaviors that they have learned in other companies. We found in our health care business that many very technically competent employees just did not fit in our company because their way of working had been shaped and formed by one of the large national health care companies. Many of them never could adapt to our distinctly different culture.
Human resource experts tell us that culture should be a major factor in hiring employees. Even state employment agencies often strongly recommend culture as a criterion. They assure us that it is not a matter of discrimination, but trying to find people who will fit the culture and stay with the business. For state employment folks this is important as they are trying to keep unemployment down. If too many people end up in businesses where they do not fit, it leads to increased turnover and unemployment.
We tried several creative ways to find out if someone would fit in our culture. We had a very decentralized structure that was not dominated by our physicians. We had to make sure that we hired physicians and staff that fit into this culture. We would have them sit in treatment meetings and meet formally and informally with many of our staff. We would talk to our front line staff about each possible hire, and it was that group who often had veto power. Several prospective employees were not hired because they did not treat our receptionist with respect.
Firing employees because they do not fit in a culture is where many, especially those in a corporate environment, get uncomfortable. They seem to hope that eventually these employees will just realize that they do not fit in and leave on their own accord. But, in a small business we do not have the luxury of keeping any excess employees.
Performance in a small business is more than just doing one’s job. The culture of the business is still a work in progress, and the business owner must be diligent to make sure that it is evolving the way they want it to. Just because a salesman meets his quota is not enough to keep his job. If he does so in ways that undermine the way the owner wants to build relationships with customers that can be just as important a criterion for continued employment as selling product.
It may be a soft criteria and it may seem subjective to an outsider. But, an entrepreneur knows how she wants her business to run and she has an obligation to make the tough decisions to make sure that the culture develops in a way that is consistent with her values, her ethics and her vision.