How to Deal with a Referral Gone Bad


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One of your best workers recommends a friend or family member for an opening at your company, whom you gladly take on. But unlike your present worker, this new hire is a bust. Allowing him or her to stay on without intervening could create resentment among your company’s other employees. However, there are potential personal and legal consequences associated with getting rid of a bad referral; especially your company does not have established policies for dealing with inadequate performance or unacceptable conduct,

Not Up to the Task
Some hires don’t work out because the new employee simply isn’t up to the task. The shortcomings may be physical – such as being unable to lift supplies or equipment. Skill set shortcomings may also be the problem. In such cases, you must determine whether further training or instruction could possibly bring the new hire up to speed within a reasonable period of time. Whether your company has made such efforts in the past should also weigh in your decision. If you decide to issue additional training to a referral, when previous employees who fell short did not receive such training, you could create an impression of favoritism.

Poor Work Ethic
Unlike your present employee, the friend or family member who was referred may demonstrate a poor work ethic. He or she may cruise in late and leave early. Or the new hire may be punctual enough, but shirks carrying a fair share of the work. Even if the new hire otherwise performs adequately, allowing such conduct to continue sends a bad sign to your other workers. Whether you issue warnings or impose disciplinary action against the errant new hire before issuing a pink slip depends on your company’s existing policies.

Substance Abuse 
Employees who arrive on the job in an impaired state or who indulge in substance abuse during work hours pose an immanent threat to themselves, other employees, or customers at a work site – not to mention the general public. Under no circumstances should he or she be allowed to operate equipment or drive a company vehicle. Sending a visibly impaired employee home may be called for; however, he or she should NOT be allowed to drive.

Substance abuse also frequently presents itself in less overt signs, such as frequent absences, or a decline in performance. Your company’s established policies on employee conduct may determine whether the new hire receives disciplinary action or you simply let him or her go.

Theft or other Criminal Infractions
Catching an employee in the act of theft or other criminal infractions demands swift and decisive action, up to and including calling the authorities, dismissing the individual on the spot, or both. However, accusations of criminal activity without overt proof are potentially problematic. If complaints from other employees or customers begin to add up, you will need to intervene.

Executing the Dismissal
If it has become clear that the new hire won’t work out, dismissal may be the only solution. However, doing so may create an uncomfortable situation with the employee who made the referral. Informing the employee who made the referral beforehand that the friend or family member will be dismissed is s a gracious gesture, although he or she may already be aware that the situation is untenable. Carrying out the actual dismissal should be done according to your company’s established policies to minimize any impression of preferential treatment.

Possible Ramifications of a Bad Referral
Your company should have a zero tolerance policy concerning criminal activity, regardless of whether a referral was involved. However, even without infractions of the law being involved, allowing a bad referral to remain on the job without executing correctional or disciplinary action can generate resentment among your company’s other employees. However, possible consequences associated with dealing with a referral gone bad could be serious.

Any indication that a referral who does not belong to a protected class received preferential treatment could expose your company to adverse legal action. For instance, you may issue a suspension without pay to a white male referral for frequent unexcused absences. However, in the past, employees who missed work with similar frequency were terminated. If any of the previously dismissed employees belong to a protected class, your company could be liable for a claim of gender, racial or age discrimination.

Likewise, if the referral belongs to a protected class, disciplining or dismissing him or her could bring on legal headaches as well. Executing disciplinary action and dismissal strictly according to established company policy minimizes such risks.

Disclaimer: This article addresses issues associated with problematic hires involving candidates referred by a company’s employees. It is not intended to provide legal advice. Please consult with an attorney specializing in employment law located in your jurisdiction with specific questions concerning disciplinary actions or dismissal of an employee referral.

Audrey Henderson
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Posted In: Management

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