How You Manage These 2 Kinds of Employees Will Define Your Company's Culture

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I learned one of the most valuable leadership lessons of my life when I was 23, when one of my first managers drew for me what he called the Nice versus Competent two-by-two matrix.

He shared that it's obvious that businesses want as many nice/competent employees as possible, and to move on from any unpleasant, incompetent employees. What's more challenging, he noted, are the people who exist in the other two quadrants--people who are talented but difficult, which he referred to as "brilliant jerks," and people who are nice but don't perform well, which he termed "friendly incompetents."

He noted that many organizations tolerate the brilliant jerk even though that person is very dangerous to company culture. However, he said people in the friendly incompetent quadrant are the ones who can present the biggest barrier to success.

I eventually realized company culture depends upon how a leadership team handles those two types of employees--friend incompetents and brilliant jerks. It's more difficult than you'd think, as those people eventually hurt your business and/or your morale. Here's why.

A brilliant jerk's high performance isn't always worth it

It's tempting to ignore brilliant jerks' bad behavior because they get great results. These are the people who do the right things for the wrong reasons. Plenty of world-changing companies were built by people who were gifted but difficult to work with, or even disrespectful to their colleagues.

But leaders who lean on the talent of a brilliant jerk, or even reward them with advancement, run the risk of poisoning their culture and alienating other key employees. Most people have no interest in working with people who are rude or discourteous to them, and you will likely lose other top performers who are sick of dealing with your brilliant jerks. They can drive away valuable employees and negatively impact your entire company culture.

Friendly incompetents may be great people, but they don't guarantee good results.

To be clear, the term incompetent is not a general characterization--friendly incompetent is meant to convey that the person isn't performing well in their current role. These are people who have a positive attitude and exude your core values. This is why you give them second and third chances to perform, even if they keep making the same mistakes and missing the mark.

It's often difficult for managers to give tough and honest feedback to a person they really like. Instead, they allow the poor performance to continue because they overlook the poor performance or they keep hoping they will turn the corner. However, this inaction sends a clear message to others: if you are likable, then results don't matter. That is not the hallmark of a high performing culture.

We've had this happen at our company, including with an employee we'll call "Jim." Jim was a beloved colleague who wasn't growing along with the business. Rather than ignoring the problem, we had a candid conversation about his performance. It turned out Jim's job had turned into something he didn't enjoy anymore, therefore he was not engaged and wanted to do something else.

People who are nice, but underperforming, don't always need to leave the company. In some cases, they need coaching and may just be in the wrong role. But it's important for leaders to acknowledge that people they like still need to meet high standards--and to hold them to those standards. Otherwise, top-performing employees will notice the double standards and may move on.

You are what you tolerate.

It can be easy to overlook things like a few missed metrics or complaints about a difficult employee. But these might be smaller signs of a bigger problem--your company values are ultimately defined by your tolerance of performance and behavior.

The best companies have cultures that are both healthy and high-performing. If you tolerate, or even reward, brilliant jerks because they perform well, you introduce toxicity into your culture. People will believe it's a fend for yourself mentality and will eventually either adopt the behavior that is rewarded or chose to leave.

Conversely, it's important for employees to know that even the most beloved employees are still expected to meet the company standards. If you tolerate poor performance, that inevitably pushes the burden onto your top performers to pick up the slack. Top performers don't want to work somewhere where people aren't expected to pull their weight.

Ultimately, the way you handle these two employees says everything about your culture and company values.

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Robert Glazer is the founder and CEO of Acceleration Partners, an award-winning performance marketing agency ranked #4 on Glassdoor’s best places to work. Robert was also named twice to Glassdoor’s list of Top CEO of Small and Medium Companies in the US, ranking #2 and was recently named one of Conscious Company’s top 22 conscious business leaders. He is also a member of Marshall Goldsmith's 100 Coaches initiative.