The Million-Dollar Question for Leaders

When do you let go struggling employees?

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When you lead a team, you face a tough reality: not every hire will be a perfect fit.

Some employees thrive, contributing to your team’s success, while others struggle, falling short of expectations despite effort and training. As leaders, deciding whether to keep or let go of a struggling employee is one of the hardest choices we make.

So, how can you approach this dilemma? By asking yourself one simple question:

“Knowing what I know now, would I enthusiastically re-hire this person?”

If your answer is “no,” it may be time to make a change. I discuss how to use this question, research-backed strategies for handling underperforming team members, and ways to ensure fair and consistent decision-making.

Understanding the Million-Dollar Question

The “million-dollar question” is a decision-making tool often used by leaders to assess an employee’s ongoing value. It’s direct and forces an honest evaluation. It can help you overcome common pitfalls like “sunk-cost fallacy,” where managers hesitate to part ways with an underperformer because of the time and resources already invested. By thinking in terms of re-hiring, you step back from past investments and focus on future potential.

Let’s say you hired a sales representative six months ago. Despite training and mentorship, their results remain below par. Asking yourself the million-dollar question centers your decision on whether this person is ​a good fit for the role and the team. The honesty of this question pushes you to face reality — whether that means re-committing to help the employee improve or letting them go.

Why Enthusiasm Matters in Re-Hiring Decisions

Note the word enthusiastically in the question. It’s not enough to say, “Yes, I would re-hire them.” You must do so with energy and conviction. This detail matters because enthusiasm reflects confidence in the person’s skills, potential, and cultural fit. A “yes” answer without enthusiasm may show that you’re tolerating the employee’s performance rather than seeing it as an asset.

Research on workplace performance shows that enthusiasm and confidence often correlate with team success. According to Gallup, engaged employees are 17% more productive and 21% more profitable than the non-engaged employee. If you aren’t excited to have someone on your team again, chances are they’re not adding the value needed.

What to Do When the Answer Is “No”

If you ​answer “no” to the million-dollar question, then it’s time to consider letting that employee go. This isn’t a straightforward decision, but it’s often the right one for both the organization and the employee.

Here’s a structured process you can use:

Review the situation

• Look back at performance records, feedback, and any corrective measures already taken.
• Consider whether the issue is skill-based, motivation-based, or a poor cultural fit.
• Ask yourself if you’ve done everything you can to help this employee succeed, like offering coaching, mentoring, or training.

Discuss the decision with HR

• Always ensure that you’re following company policies and legal guidelines before making termination decisions.
• HR can also help you ensure the process is fair, and that you’ve documented every step along the way.

Communicate with the employee

• If the decision is made to let someone go, be clear, direct, and respectful in the discussion.
• Transparency helps reduce hard feelings and can even lead to personal growth for the departing employee.

Learn from the experience

• Reflect on what led to the hiring of a misfit candidate.
• Were there signs you missed during the hiring process? Could better onboarding have helped?
• This reflection can help you avoid similar mistakes in the future.

When to Give It Another Chance

The million-dollar question is a useful tool, but it’s not the only one you should use. Before making a final decision, ask yourself whether you’ve done everything you can to support the employee’s success. Here are some things to try before parting ways:

Provide Targeted Feedback: Be specific about what needs to change, providing simple examples. Vague feedback like “work harder” or “do better” often leaves employees confused and unmotivated.

Set a Timeline for Improvement: Create a performance improvement plan (PIP) that outlines what needs to be achieved within a specific timeframe, like 30 or 60 days. Make sure it’s realistic and includes measurable goals.

Offer Additional Training or Resources: If the employee is struggling with specific skills, consider training or pairing them with a mentor for hands-on learning.

Explore Alternative Roles: Sometimes an employee might be a poor fit for their current position but excel elsewhere in the organization. If possible, discuss alternative roles that may better suit their skills and interests.

Gauge Motivation: Ask the employee whether they are still motivated in their current role. Sometimes personal or professional issues may affect performance, and a direct conversation can provide insight into whether they still want to be part of the team.

Research-Based Strategies for Managing Struggling Employees

Many studies have examined how to handle underperformers. Research suggests the following approaches:

Early Intervention Works Best: Research from Harvard Business Review emphasizes the importance of early intervention. Problems caught early are often easier to fix, reducing the need for termination. If employees receive timely feedback, they have a better chance of correcting course.

Establishing Clear Expectations: A 2020 study from the Society for Human Resource Management (SHRM) found that many performance issues stem from unclear expectations. Ensure employees know ​what is expected of them, both in terms of performance and behavior.

Use Data to Guide Decisions: Companies that use data-driven performance evaluations see clearer results. Metrics help managers decide based on facts, not just feelings or assumptions. Using performance metrics also protects against bias and ensures fair treatment.

The Role of Psychological Safety: Research by Amy Edmondson at Harvard highlights the need for psychological safety in the workplace. Employees are more likely to seek help and improve if they feel safe to discuss their shortcomings without fear of immediate termination.

Building a Culture That Encourages High Performance

Your team’s culture plays a big role in employee performance. A strong culture can motivate even struggling employees to push harder. Here are some ways to build a performance-driven culture:

Promote Openness: Encourage team members to communicate about what’s working and what’s not. Open communication helps you catch problems early.

Recognize Achievements: Recognizing small wins builds momentum, even for employees who may struggle overall. Praise effort and celebrate milestones to keep morale high.

Encourage Continuous Learning: Encourage a positive attitude towards growth by providing ongoing training and learning chances. Employees who feel like they are learning perform better and are more engaged.

Lead by Example: If managers set a high standard, employees are more likely to follow suit. Be a role model for accountability and high performance.

Asking yourself the million-dollar question is a powerful way to cut through hesitation and make logical decisions about struggling employees. But it’s equally important to ensure you’ve done everything possible to help an employee succeed. By combining honest evaluation with genuine effort to develop employees, you can build a team that’s not only high-performing but also motivated and aligned with the company’s goals.

Letting someone go should never be taken lightly, but sometimes, it’s the best decision for all involved. As a leader, making the right call leads to a stronger team and a healthier work environment.

References:

Edmondson, A. (2021). *The role of psychological safety in the workplace.* Harvard Business Review.

O’Connell, B. (2020, December 8). *6 Tips on setting expectations for employees.* SHRM.

Currence, J., & Jackson, A. (2021, November 9). *Get rid of performance reviews.* SHRM.

Gallup. (2020). *Improve employee engagement in the workplace*. Gallup.