• by David Rodnitzky , Op-Ed Contributor, July 17, 2015

I’m often baffled by how companies make decisions to hire or fire their employees and their agencies. For example, every agency has experienced the pain of a new CMO joining a client company and firing the agency in a matter of days, seemingly without regard to performance or history. And I’m sure most employees have seen strange firings and promotions that make no sense to anyone but the manager making the odd decisions.

Companies typically have complex systems designed to measure employee and agency value. For employees, this might be a “360 review process,” in which an employee’s performance is evaluated by his or her peers, higher-ups, and direct reports. For agencies, a regular “request for proposal,” or RFP, is the standard means to determine whether the current agency is the best option. Both of these processes take up a lot of time for a lot of people. And let’s be honest: Almost everyone involved hates the experience.

I think there is a better method, and it’s shockingly simple: asking and answering just one question. Ready? Here it is: “If [my agency or my employee] left today and went to my biggest competitor, would I be a) panicked; b) ambivalent; c) relieved?” Let’s assume, by the way, that the employee/agency isn’t going to share any confidential information with the competitor; the point here is, do you want this person on your team, or your opponent’s team?

If the answer to this question is “panicked” or “relieved,” the course of action is quite straightforward: either a raise/long-term contract, or an immediate termination.

Life becomes harder when you are ambivalent about someone. Internally, when I am on the fence about a team member, I ask myself one additional question: “Is this person a) a cheerleader for the company; b) ambivalent about the company; c) negative about the company?”

If I find that an employee is a great cheerleader for the company but I’m ambivalent about whether I want them to stay, the correct course of action is to put that team member on a “PIP” (performance improvement plan) to give them a chance to improve into someone I would be panicked to lose. For folks about whom I am ambivalent and who are just ambivalent or even negative about the company, the correct course of action is termination.

It should be noted, by the way, that someone whom I’d be panicked to lose but who is negative about the company probably deserves a PIP as well (negative people spread negatively quickly to other team members) — but generally most people I don't want to lose aren’t negative to begin with, so this is an unlikely scenario.

One final point: Companies are generally much more thoughtful about hiring/firing employees than they are about their agencies. For example, few companies would fire an employee without first giving the employee a PIP, but many companies fire agencies without even telling the agency that they aren’t happy. And, as noted above, new CMOs are notorious for firing agencies without even evaluating the agency’s performance! So if there’s an (admittedly self-serving!) lesson here, it’s that companies should evaluate agencies in the same way they evaluate employees.