I've worked with several environments who retained toxic people for fear they would do something if fired. In one environment employees were afraid to confront a rather gruff individual for fear he'd crash the software development environment -- it turns out he kept to himself because his manager wouldn't talk to him. Removed the manager and this employee blossomed.
If you want strong employee relationships, then hire slowly, and fire fast.
Every employee in your company should fit your culture, be highly qualified, and clearly present a benefit to your business objectives. If an employee isn't a good fit for your business, you'll just do a disservice to the individual and your company by hiring them.
It's like planting seeds in the wrong soil, you'll never see the bloom and eventually the potential of the seed withers away. In the same analogy, you just can't hire an individual without cultivating them for optimal growth, something I'll discuss in another issue.
On the other hand, if you have an employee who just isn't working out, then encourage them to move on. A weed in your proverbial garden of production. Help that individual find a position that better suits their personality -- and do it quickly. Bad employees poison the work environment.
How do you do this without harming the relationship:
Focus on the match of skills to position. Avoid saying, "You're not right for the position", instead say, "The position isn't right for you." Through self-assessment, help the individual find what they like to do, and strongly encourage they moved to it. Various websites provide these tools at a reasonable licensing fee.
Set deadlines for self-directed discovery. Employees shouldn't discover what they want to do for a living while on your payroll. Some companies give employees a two week cool off period following an evaluation of work performance. In this period they receive tools to decide to stay or go -- tools they can access from home.
"Practice containment and recovery in-process". Instead of fearing an employee, help each employee package their job as part of the business process. Any work completed should be well documented, and each employee's tasking should be complete enough someone else could pick it up where they left off.
Keep problems with employees private with the individual. If you need to discuss an individuals performance challenges, then the first person you speak with is the employee. Confirm your concerns, get their feedback, and work directly with the source (documenting your exchange using the proper human resources procedures.)
Include heavy testing and peer reviews in the hiring process. Invest in choosing the right people, your interview process should be one of analytical qualifications, personality reviews, and popular opinion. Focus on the right fit for your business objectives. You want to hire employees who are extremely productive on their own -- or spend millions re-engineering the wrong people.
Address disciplinary issues promptly after the event. When an employee does something wrong, let them know immediately. Lay it on the table and clearly defining and correcting the mistake. Stay focused on the action, not the employee's personal traits. (Don't do this without positive feedback for actions that contribute to the company.)
Avoid making hiring or firing decisions personal. Document everything related to the decision, make sure the hiring or firing decision isn't a personal decision, but one best for the objectives of the company. If you let personal decisions guide your actions in these areas, you open your company up for law suits and other problems in the future.
Personal friendships aren't the same as business relationships. If you have to fire friends, relatives, or even your spouse, do so gently -- and focus on the business decision over personal preference. Demonstrate how it protects the future personal relationship, and was purely a business decision. You can still be friends.
Regularly clean house of unproductive employees. Make performance evaluations more frequent (monthly goal based) and yearly reviews a contingency evaluation on the position. If people aren't constantly improving in their position, they shouldn't stay. (This is heavily balanced by compensation, if people perform, they should be paid well.)
Warning: If these strategies are taken out of context you will create an environment of hostility, "our necks are on the chopping block, waiting for the axe." If you don't completely understand what you are reading, then don't implement it. Post your questions on the Coaching Forum or call me at (757) 282-7779 for an appointment.