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Published Articles by David Balovich

Title: Steps To Cultivate Our Garden
Published in: Creditworthy News
Date: 11/6/07

Autumn has officially arrived in North America. It marks the transition from summer into winter. It is the time of year that deciduous trees shed their leaves, changing to a reddish hue before finally succumbing and falling to the ground. It is also the season during which days get shorter and cooler and precipitation increases. It will eventually lead to winter, a time of year often associated with gloom and death.

 This is a time of year many gardeners look forward to as it highlights the season where many decide what plants and trees will be shed and replaced. Farmers spend this time plowing over their fields and deciding what crops to sow in their freshly cultivated fields in the spring.

This is the time of year that I often reflect on the writings of Jack Welch, one of the most successful and controversial CEO’s of the last thirty years. Whether you like him or not, “Neutron Jack”, a nickname he acquired in the 1980’s, took GE from $26.8 billion in recorded revenues in 1980 to $130 billion when he left in 2004. He accomplished this with 112,000 fewer employees then when he began and grew GE’s market value to $410 billion from a measly $14 billion, making GE the most valuable and largest company in the world.

One of Jacks’ rules for success was to eliminate non-performing managers, the bottom 10%, and he expected his managers’ to do the same with their staff. He earned a reputation for encouraging his managers to out-perform their projections, and he always made certain that he compensated his top performers for their achievement. Jack Welch was an exceptional leader who recognized that to be successful required not only effort but truly exceptional people.

When we are responsible for a team we will often have some under-achievers, “the bottom 10%”, that we are responsible for. Every department in every organization has a few with the exception of government who attract under achievers like honey attracts bears. These are generally nice people but they are usually not as concerned with the goals and objectives of the department or organization as much as they are concerned with having a “home” to go to each day and at the end of a period collect a check whether they worked for it or not. They are the primary reason that often prevent us from succeeding in meeting our goals and growing within the organization. We owe it not only to the company and ourselves but also to our subordinates and their peers to identify and eliminate them from our garden.

Too often we are reluctant to terminate these under achievers or the “bottom ten percent” as Welch described them. Reasons vary from being too nice to not having sufficient documentation to support termination. The following, then, is a guide using common sense and forethought to allow us to terminate those who are non-contributors and under achievers without fear of employment litigation or reprisal.


Many companies create employee manuals and often like other company manuals file them away in a cabinet or desk drawer; where no one gives them another thought, until a former employee files a workplace claim or law suit and requests a copy in a discovery process. These manuals frequently address such matters as progressive discipline. Something rarely practiced by front line managers and supervisors.

A primary benefit of a written manual is that, when properly drafted, it guides management through the process of both disciplining and terminating employees by outlining procedures for addressing misconduct in a fair, neutral manner. One of the easiest employee claims to make is one of discrimination against an employee in a protected class; termination decisions made on an ad hoc basis increase a former employee’s ability to claim unfair treatment when compared to other classes of employees. In most cases, employees are fully aware of their employer’s policies.

If a manager or supervisor doesn’t understand company policy, they are less likely to follow the specific procedures set out in the manual, and may increase the risk of litigation or involuntary compliance. The simple solution is to develop an appropriate employee manual and require managers and supervisors to review and understand its provisions and follow them in connection with all disciplinary situations and termination decisions.


When a workplace complaint is filed or a suit goes to trial, the outcome often hinges on the credibility of witnesses. Proper documentation can be critical to an employer’s credibility regarding allegations of a pattern of misconduct, or even a single instance of serious misconduct, on the employee’s part. Whenever disciplinary action or a warning is warranted, managers should ask the employee to sign a document acknowledging the occurrence and the employee’s action. The document should contain a section for the employee to state reason for disagreement and should not require the employee to admit fault, similar to a traffic citation.

The manager along with another company witness, not the employee’s peer, present at the time of counseling or termination should also sign the document. If the employee refuses to sign the acknowledgement, the manager should make a notation on the document that the employee refused to sign the document..

In the event of a hearing or litigation, a company’s documented records will go a long way toward convincing a hearing officer, judge or jury of the employee’s prior course of conduct and the legitimacy of the termination.


When it comes time to terminate an employee, the termination meeting often includes supervisors with whom the employee interacted on a friendly basis during the term of employment. Such supervisors might be inclined not to hold the employee accountable for the misconduct that prompted the termination, or they simply might not want to cause the employee further embarrassment, be responsible for their ability to secure new employment or get involved in an emotional encounter.

It is imperative not to down play the reason for termination . It is not uncommon for a terminated employee to make allegations of misconduct on the employer’s part. For example, if the employee files a charge of discrimination, the legitimate reason for termination will be critical to the case. The specific reasons for termination may be apparent from company records, but if the employer failed to address these legitimate reasons during the termination meeting, or worse, makes statements that are inconsistent with the legitimate reasons for terminating the employee, it can appear to a hearing officer, judge or jury that the employer is inventing after-the-fact reasons to justify the termination. A changing story can appear to be evidence of pretext or a falsified reason for termination that can seriously jeopardize the employer’s defense of an employee wrongful termination complaint or lawsuit.


Companies often spend thousands of dollars developing non-compete and non-disclosure agreements, primarily for their deterrent effect. Such a policy can lose this effect quickly if the employer does not remind an employee of post-employment obligations at the time of termination.

Where trade secrets, confidential information and customer goodwill are involved, it is far easier to keep them protected than try to correct abuses using legal remedies.

Presenting the employee, at the time of termination, with a reminder of the employee’s obligation along with a copy of the post-employment restrictions accomplishes several things.

First, it lets the employee know the employer is serious about the agreements and intends to enforce them.

Second, it often prompts the employee to seek advice of counsel or to present the restrictions to prospective employers prior to engaging in prohibited conduct, instead of proceeding to compete without understanding the potentially serious consequences.

Third, providing a reminder will make it easier to establish that the employee’s post-termination misconduct was malicious and intentional, rather than a result of forgetfulness or a misunderstanding of the employee’s obligations.

When you populate your garden with strong, healthy plants and provide the right fertilizer then you will be a successful gardener.

I wish you well.  

The information provided above is for educational purposes only and not provided as legal advice. Legal advice should be obtained from a licensed attorney in good standing with the Bar Association and preferably Board Certified in either Creditor Rights or Bankruptcy.  

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