We talk a lot at Trajectify about how important it is to have the right people in the right seats. When you have the right people in the right seats, it’s easier to delegate. You can step back from the trenches and spend more time on the things you should be focused on — vision and mission, strategy, finances.

Getting to that point isn’t always straightforward or static. Someone may have been the right person for the role five years ago, and they’re not anymore. Or they might not be the best choice for the promotion that seemed like an obvious next step.

When you need to make an organizational change or reset a team member’s expectations, how do you maintain a successful employer-employee relationship?

We’re going to talk about three types of situations:

When an employee isn’t growing at the same rate as the company
When the company’s organizational structure needs to evolve
When there are two good candidates for one role.

For every situation, the first step is being willing to have difficult conversations with your employees.

Having difficult conversations with employees

Disappointing someone who’s been with the company for a long time is difficult. It’s challenging to tell someone they haven’t grown at the same rate as others or that you’ve brought in people from the outside who are way ahead of them.

At the same time, it’s unfair not to have that conversation. We owe them the opportunity to understand why they’ve been passed over.

If we think their strengths don’t align with a particular direction, we have to address that. It’s why we use assessments — because employees benefit from that awareness of their strengths and the gaps that exist. We owe it to our team members to help them achieve that awareness.

Yes, difficult conversations can sometimes go awry. An employee may become angry or defensive. They may even take their anger outside the conversation and become a poison apple within the organization.

The best way to avoid that scenario is to have regular conversations about employee performance so that the most difficult discussions don’t come as a surprise.

At CDNOW, one of our top tech talents was unhappy with the way the company’s culture shifted as we grew. We couldn’t share as much confidential company information with employees because we had become a public company. He was angry and kept harping on it in a public way. Despite our repeated conversations, he wouldn’t stop.

I encouraged him to consider options elsewhere. It was a good job market, and I believed he’d do well. It was a tough decision because he was a valued engineer and had been with us since the beginning. He decided to leave. Our work environment improved. He thrived at the new company.

We should be prepared for difficult conversations all along, which is why continuous feedback is a critical component of our performance management systems.

What do you do if you haven’t made those investments and things have turned sour? You take your lumps. You might have to terminate someone.

See: How to Give Feedback: Coaching Your Team

When an employee isn’t growing with the company

Most successful companies will experience it at some point. The business has grown. The employee hasn’t — at least not at the same rate.

We recently worked with a company that had one wide layer of management. It had worked when they were just getting started, but now that they’d grown, they were spending too much time organizing information and building consensus and not enough time solving strategic issues.

The CEO also realized that some leaders in their organization were more adept at strategy and influence than others. They were faced with the scenario of either promoting those leaders or segregating them to create a new executive function.

We coached them through the organizational change that elevated a couple of their leaders to a higher position. Instead of the ineffective weekly management meetings they’d been having, they now created an executive meeting with the few, promoted employees.

The move was challenging for the CEO. Some of the leaders that didn’t get promoted had been with the company since its early days. We had to have discussions about how the company was redefining leadership.

One of the employees, who became disgruntled for being “left behind,” was eventually let go. Two others weren’t promoted to the executive team. One employee simply wasn’t ready. We got that person coaching to close the gaps, increasing their leadership competencies and confidence.

The other person didn’t have the strengths required for an executive role. The assessments validated that view, and the employee accepted that information and moved into the right seat.

Just because someone isn’t moving up within an organization doesn’t mean there’s not a good seat for them somewhere. It’s our job as leaders to identify those seats. If a person doesn’t want to go into management or if management isn’t a good fit, they shouldn’t have to go into management to advance in their career. We need to make sure everyone has a path.

Why did this reorganization work? We were transparent and empathetic. We were focused on the individual. We shared why someone didn’t get promoted to the executive team, even if the message was hard. We offered professional development opportunities for those employees to grow.

See: All Employees Should Have Professional Development Plans. Do Yours?

The company’s organization needs to evolve around a new strategy

The need for reorganization could be positive, like adding more business units. It could be negative. For instance, perhaps the company isn’t as successful as it once was, and leadership needs to adjust its priorities.

Either way, any reorganization needs to be fair and equitable. Any change to people’s roles should be explicable because the biggest risk you face is employees feeling that some are getting preferential treatment and some are being discriminated against.

When I was the CEO at CDNOW, there was a point where we had to downsize. We decided to eliminate several entire lines of business (departments). There was one person in one of those departments who was a superstar. Others at the company urged me to keep that one employee, to move them to a new role in a different department.

I had no way of measuring or communicating to anyone why this one person was better than the others. Had I eliminated the jobs of 19 people in the department and kept one, how would I explain that to the 19? I couldn’t. So all 20 left. That was equitable.

Yes, I just heard the gasp of so many leaders who are reading this, thinking how foolish they think I was. I find objectiveness is usually more fair than subjectivity.

If you want to make reorganization decisions performance-based, you must have a uniform method of identifying who the “good” employees are in a way that can be measured and explained. If someone has a history of underperformance, of missing goals, do I have that documented somewhere? Have I been having those conversations with them?

On the flip side, have I been documenting it if someone has been outstanding and exceeding all their goals and over-delivering?

Most of our organizations just aren’t good enough for that. Nor are our managers consistent in following processes and protocols.

The best practice is to make a rule that gets equitably applied across everyone.

See: What Is an Organizational Assessment?

When there are two good candidates for one role

What happens when you’re in the lucky — and challenging — position of having two great people up for one role? They’re both good. You want both of them to continue growing in your organization, but only one of them can have that role.

In the Jack Welch era, they would’ve organized a big competition, put people through a training program and proving ground, and given the job to whoever came out stronger. While we’re not in the era of competition anymore, the candidates will probably feel competitive. There are two people, only one of whom will perceive themselves as having won when someone gets promoted.

So how do you make the choice? And how do you maintain the relationship with the employee that doesn’t get chosen?

First and foremost, you need to think through the next evolution of your business, even if you’re a few years away from it. Let’s say you’re a $5 million business now, and you’ve got a plan to grow to $10 or $20 million. What does your organization and its leadership team look like at $20 million? Try to extrapolate what the position in question looks like then. That might give you better clarity between one candidate or the other.

If you can determine that one of them will be stronger in the intended role going forward, where do you see the other going and how do you help them build a path for that? For instance, perhaps the other candidate is the better fit for a role you anticipate coming up in the future. Explain why to the candidate who didn’t get the role (remember transparency and difficult conversations).

Then talk about where you see them in the future. I envision us building a mergers and acquisitions team in 2024. I think you’d be perfect to lead that. Let’s incorporate some of those accountabilities into your role today.

The biggest mistake in this situation is to compromise, to try to make them both happy by splitting the role or redefining it into two positions. Don’t do something that isn’t in the best interest of your organization to appease two people.

What if someone believes they’ve been treated unfairly?

Even when you have the best intentions, things can go south. Perhaps you didn’t have a strong performance management system in place, so someone is surprised that they’re not getting the promotion.

What do you do if you have an employee who believes they’re being treated unfairly?

You address it head on. With vulnerability and authenticity. I’m sorry we got here. I should’ve given you feedback sooner. Here’s what I think about your performance. Or Here’s what I think about their performance, why they stood out and got the promotion. I think you could be there one day, so let’s put a good plan in place together.

The worst mistake we can make as a leader is leaving the wrong person in the wrong seat for too long.

At the client’s company I talked about in the beginning of this article, the CEO allowed their management team to become dysfunctional, avoiding those hard conversations in part because the employees had been with them for a long time. The CEO felt it would be disrespectful.

The result was that the team got more and more dysfunctional, and that dysfunction spread out into the rest of the organization. The company began struggling to meet their goals.

When the CEO finally made a change, the rest of the employees responded with an it’s about time attitude. People in your company can taste the poison of the poison apples.

See: How You Can Harness Workplace Conflict to Help Your Organization Thrive

Final thoughts

Part of what I call transparency is making sure people understand why one person was promoted to the executive team and another person wasn’t, why they weren’t chosen for the role they wanted or thought they deserved.

A competency matrix can clarify the differences between a leader and a manager or a chief officer and a vice president or a director and a manager. It’s also an effective evaluative tool that can help an employee understand what areas they need to improve in order to get to the next level.

Harvard Business Review published a leadership development article a few years ago with a really good competency matrix that can be adapted to meet the needs of many organizations.

Our coaching team works with leaders at every stage of the process — having the difficult conversations, creating performance management systems, administering assessments, and doing reorganization. Contact us to see how Trajectify can support your business.