first, you will have to nudge nearly everyone you hire. this is part of managing people. get over it, and learn how to nudge effectively. Note, each person requires a different kind of nudge, but nearly everyone requires at least a little. Employees who don't need those nudges are very rare, and become expensive quickly. If you have lucked into one, keep them happy. (note, though, my experience has been that while these sorts make incredible individual contributors, they generally make poor managers.)
Next, though, you do sometimes have to fire people. this is the way it is. If you don't know how to nudge those 5 under performers into performing well, and you are unwilling or unable to figure out how to do so, you will have to fire them, even though they probably could have performed acceptably under different management. Let them go and hopefully they will find a place where they fit.
As others pointed out, this will kill morale at your startup. Do it quickly and respectfully, and maybe give your best people raises or bonuses at the same time. The big danger here is that your best people will leave at this time, so take extra care with the people you want to keep.
Me, when I fire people, I try to frame it as my fault. I mean, I hired the guy, right? and it's my job to manage them. If they didn't work out, I think it's best all around if I publicly and sincerely accept the fault. And really, it's best if I think it's my fault. I mean, I can change my behavior; if I can learn how to hire better or manage better in the future, that's a big win. Feeling ripped off by an employee, on the other hand, is almost never productive.
It's best to remember that in other situations, these people might be pretty good. I certainly know I'm not the best manager in the world. There is no reason to make this any more painful than it has to be, and really, there is no reason to publicly say anything bad about these people. You will meet these people later in your career, and your employees will maintain personal relationships with some of these people, so the better you can have them think of you, the better off you are.
If you can spare the cash, give them some severance. Even a week or two is a lot better than nothing (and in the startup world, a lot more than the employees probably expect.)
Now, when it comes to hiring; what I do is that I make it clear it's a contract assignment, at first, without any expectation of continued employment. If they don't work out, there's no more work. I pay them and we part friends. If they do, I can slowly work towards an expectation of longer term employment.
As for telecommute vs. office, well, it really takes a specific personality type to telecommute effectively. I recently got an office, and I note a marked improvement in productivity both from my PFY and from myself, on days when we both decide not to work from home.
OT but as an employee/contractor, I'm interested in what you wrote here:
Employees who don't need those nudges are very rare, and become expensive quickly
Could you elaborate on this? Are these employees just able to take specs and implement them on their own timetable? I would consider myself in this category - I currently telecommute and can go for days without any communication with the manager but still get things done. I just want to see if I am in that category from another person's point of view or see what else I can do to improve.
yeah. well, you need someone like you, and you need a manager who is good at communicating specs, and the manager needs to be okay that the end result will still be slightly different from his or her 'vision'
But yeah, it's pretty rare to have someone who keeps working hard on their own. it's more rare that the result looks anything like what the manager had in mind when they drafted the specs.
If you are one of those people, you should be able to charge a significant premium for your time. You are worth it. Now, the hard part here is that it's hard to prove you are one of those people without actually working for someone; still, if you are what you say you are, you should be able to build yourself a high-priced consulting business.
Next, though, you do sometimes have to fire people. this is the way it is. If you don't know how to nudge those 5 under performers into performing well, and you are unwilling or unable to figure out how to do so, you will have to fire them, even though they probably could have performed acceptably under different management. Let them go and hopefully they will find a place where they fit.
As others pointed out, this will kill morale at your startup. Do it quickly and respectfully, and maybe give your best people raises or bonuses at the same time. The big danger here is that your best people will leave at this time, so take extra care with the people you want to keep.
Me, when I fire people, I try to frame it as my fault. I mean, I hired the guy, right? and it's my job to manage them. If they didn't work out, I think it's best all around if I publicly and sincerely accept the fault. And really, it's best if I think it's my fault. I mean, I can change my behavior; if I can learn how to hire better or manage better in the future, that's a big win. Feeling ripped off by an employee, on the other hand, is almost never productive.
It's best to remember that in other situations, these people might be pretty good. I certainly know I'm not the best manager in the world. There is no reason to make this any more painful than it has to be, and really, there is no reason to publicly say anything bad about these people. You will meet these people later in your career, and your employees will maintain personal relationships with some of these people, so the better you can have them think of you, the better off you are.
If you can spare the cash, give them some severance. Even a week or two is a lot better than nothing (and in the startup world, a lot more than the employees probably expect.)
Now, when it comes to hiring; what I do is that I make it clear it's a contract assignment, at first, without any expectation of continued employment. If they don't work out, there's no more work. I pay them and we part friends. If they do, I can slowly work towards an expectation of longer term employment.
As for telecommute vs. office, well, it really takes a specific personality type to telecommute effectively. I recently got an office, and I note a marked improvement in productivity both from my PFY and from myself, on days when we both decide not to work from home.