Termination of Employment contract is one of the most difficult aspects of Human Resource Management, depending on the side of the divide you are. It is one assignment many HR Managers or whoever that manages the assigned role of workforce management deplores because it is a negative role, but a difficult aspect of the job that must be executed. This was one of my albatross as a Human Resource Manager, when I worked in one organisation because the Managing Director always used it wrongly as a threat to employees which should not be – it could be very demotivating!

According to Wikipedia, “termination of employment is an employee’s departure from a job and the end of an employee’s duration with an employer. Termination may be voluntary on the employee’s part, or it may be at the hands of the employer, often in the form of dismissal (firing) or a layoff”.

“Termination of employment refers to the end of an employee’s work with a company. Termination may be voluntary, as when a worker leaves of their own accord, or involuntary, in the case of a company downsize or layoff, or if an employee is fired” – Investopedia.

Termination of employment according to Oladosu O. in his book, The Nigerian Labour and Employment Law, “is the bringing to an end the employment relationship”. It is the severance of relationship between the employer and employee.

Termination of employment could occur from either the employer or employee but should meet the written terms of the contract. The employer nor the employee is neither under any obligation to give reasons for the termination of employment contract.

You should know that Section 11 of the Labour Act in terms of contract of employment, provides for a compulsory issuance of notice or payment in lieu of notice by either party. Section 11(6) of the same act provides that “the right”to notice may be waived by ether party to the contract of employment by a payment in lieu of notice“.

Be reminded that contract of employment may not always be a written document; all that is required is that parties involved should reach an agreement and abide by the terms of engagement.

The termination of employment and dismissal brings the contract of employment to an end. The law on termination and dismissal in Nigeria is built around Common Law.

Factors leading to termination of Contract of Employment:

i). Expiry of Contract of Employment: at the expiry of fixed term contract for which the employee services may no longer be required, termination may be the next option;

ii) Mutual consent/ agreement: this could be occasioned by retirement or may be a “constructive dismissal”, a situation where employee is advised / forced to resign by the employer due to some irreconcilable differences.

iii). By notice e.g.

• Resignation
• Dismissal
• Redundancy (when an employer ceases to carry on the business)

iv). Breach of contract, necessitating the employer to dismiss the employee without notice.

Examples:

a). willful disobedience of lawful order, evidencing total disregard for the terms of contract and utter disrespect for constituted authority;

b). dereliction, abandonment or desertion of duty;

c). serious negligence or prolonged incompetence;

e). misrepresentation or falsification of information supplied in any official document;

f). on the receipt of unsatisfactory report(s) from the previous employer of the employee on probation;

g) giving out or divulging confidential information about the company’s trade secrets to a third party or person not entitled to know;

h). conviction for felony or any other criminal offence by a competent court of law;

i). dishonesty, misconduct or any act likely to bring the company’s name into disrepute or ridicule;

j). frustration emanating from the death, illness or imprisonment of employer or employee.

Dismissal:

The Webstar’s Dictionary and Thesaurus defines dismissal as the act of removing a person from office. Nigeria Law refers to dismissal as the determination of a contract of employment due to the employee’s misconduct and it is carried out summarily without advanced notice nor payment in lieu of notice. Employers adopt this to erring employees in cases of gross misconduct. In most situations, it takes immediate effect and it is the sole right enjoyed by the employer. The principle of fair hearing and natural justice must apply in such situation.

Dismissal does not only include the termination of an employee’s contract by his employer; it is also ending a fixed term contract without a renewal on the same terms.

Secondly, it is the termination of employment by the employee where the employers conduct forces him/ her to do so. This is referred to as “constructive dismissal” significantly precipitated by employer’s breach of contract, signifying that the employer no longer wants to be bound by one or more terms and conditions of the contract. The employee may decide to leave immediately depending on the gravity of the breach and ability to meet up with such conditions and responsibilities that appertains thereto (if any) to such actions.

Dismissals vary as follows:

Summary dismissal: This is when the employer dismisses the employee without the required notice period and as such, the employee may also not be entitled to payment(s) – entitlement(s). This occurs and can only be justified if the employee has committed a serious breach of contract otherwise he or she could seek redress in a competent court of law.

Unfair dismissal: An employee may approach the National Industrial Court to bring claim if he/she believes that he/she has been unfairly dismissed. The onus will lie on the employee first to prove that he/ she has been dismissed; and the employer’s responsibility at this point will be to prove that the dismissal was fair.

Wrongful dismissal: The employee can lay claim for wrongful dismissal if he/ she can prove with evidence that the dismissal was without justification as he/ she has not breached any part of the contract. The employee will also have to prove that it was not with appropriate notice and that that was ignored by the employer, thereby suffering losses as a result. The employer will be liable to wrongful termination in the Court of Law.

If wrongful dismissal can be proved, the employee may be able to claim some damages resulting from loss of earnings payable during the notice period or balance of wages due under fixed term contract.

In dismissing an employee, the employer is not justified except there were some serious offenses.

Resignation:

Resignation is a form of termination of contract by notice. Contracts are expected to specify notice periods. Be that as it may, termination of employment during probationary period carries minimal notice period or none, depending on several variables – position, company policy, reasons for resignation etc. Notice may be waived, or payment made in lieu of notice.

Employees may resign appointment for any number of reasons, personal or occupational which could be a reflection on the management style, company’s culture, harassment, increased work hours, new work location etc.

When an employee announces his/ her resignation, verbally or by letter, it is pertinent for Management to find out reasons why he/ she is leaving through the exit interview so as to make possible adjustments, where necessary.

Conclusion:

In managing termination of employment, the Human Resource Manager and Management generally should consider how the factors above apply in a given situation, depending largely on the individual concerned, the responsibilities of the incumbent job holder, cost of replacement in terms of time and finance, public perception and corporate image, company’s policy etc.

Contributed by Agolo Uzorka Eugene, CEO/ Lead Consultant, Eugene + George Consulting Limited, a front-line Human Resource Company, providing world-class services to a wide-range of clients (www.eugenegeorgeconsulting.com)

It’s not always the horse or the jockey. by Tom Eisenmann

From the Magazine (May–June 2021) Kalle Gustafsson/Trunk ArchiveSummary.   If you’re launching a business, the odds are against you: Two-thirds of start-ups never show a positive return. Unnerved by that statistic, a professor of entrepreneurship at Harvard Business School set out to discover why. Based on interviews and surveys with….

Most start-ups don’t succeed: More than two-thirds of them never deliver a positive return to investors. But why do so many end disappointingly? That question hit me with full force several years ago when I realized I couldn’t answer it.

That was unnerving. For the past 24 years, I’ve been a professor at Harvard Business School, where I’ve led the team teaching The Entrepreneurial Manager, a required course for all our MBAs. At HBS I’ve also drawn on my research, my experiences as an angel investor, and my work on start-up boards to help create 14 electives on every aspect of launching a new venture. But could I truly teach students how to build winning start-ups if I wasn’t sure why so many were failing?

I became determined to get to the bottom of the question. I interviewed or surveyed hundreds of founders and investors, read scores of first- and third-person published accounts of entrepreneurial setbacks, and wrote and taught more than 20 case studies about unsuccessful ventures. The result of my research is a book, Why Startups Fail, in which I identify recurring patterns that explain why a large number of start-ups come to nothing.

My findings go against the pat assumptions of many venture capital investors. If you ask them why start-ups fall short, you will most likely hear about “horses” (that is, the opportunities start-ups are targeting) and “jockeys” (the founders). Both are important, but if forced to choose, most VCs would favor an able founder over an attractive opportunity. Consequently, when asked to explain why a promising new venture eventually stumbled, most are inclined to cite the inadequacies of its founders—in particular, their lack of grit, industry acumen, or leadership ability.

Putting the blame on the founders oversimplifies a complex situation. It’s also an example of what psychologists call the fundamental attribution error—the tendency for observers, when explaining outcomes, to emphasize the main actors’ disposition and for the main actors to cite situational factors not under their control—for example, in the case of a failed start-up, a rival’s irrational moves.

Putting scapegoating aside, I identified six patterns of failure, which I describe fully in my book. In this article I’ve chosen to focus on two of them in greater detail, for two reasons: First, they’re the most common avoidable reasons why start-ups go wrong. I’m not interested in clearly doomed ventures with no chance of success or even promising start-ups that were felled by unexpected external forces such as the Covid-19 pandemic. Rather, I’ve focused on ventures that initially showed promise but subsequently crashed to earth because of errors that could have been averted. Second, the two patterns are the most applicable to people launching new ventures within larger companies, government agencies, and nonprofits, which makes them especially relevant to HBR readers. I’ll explain each pattern more fully, illustrate it with a case study, explain when it’s most likely to occur, and suggest ways to steer clear of it. (To learn more about the other common reasons for failure, see the following sidebar.)

Four Other Patterns That Doom Start-ups

False positives. Early-stage entrepreneurs often misinterpret signals about the market demand. Beguiled by an enthusiastic …

Good Idea, Bad Bedfellows

As I’ve noted, VCs look for founders with the right stuff: resilience, passion, experience leading start-up teams, and so forth. But even when such rare talent captains a new venture, there are other parties whose contributions are crucial to it. A broad set of stakeholders, including employees, strategic partners, and investors, all can play a role in a venture’s downfall.

Indeed, a great jockey isn’t even necessary for start-up success. Other members of the senior management team can compensate for a founder’s shortcomings, and seasoned investors and advisers can likewise provide guidance and useful connections. A new venture pursuing an amazing opportunity will typically attract such contributors—even if its founder doesn’t walk on water. But if its idea is merely good, a start-up may not become a talent magnet.

Consider the case of Quincy Apparel. In May 2011 two former students of mine, Alexandra Nelson and Christina Wallace, came to me for feedback on their start-up concept. I admired both of them and was impressed with their idea, which identified an unmet customer need: Young professional women had a hard time finding affordable and stylish work apparel that fit them well. Nelson and Wallace, who were close friends, devised a novel solution: a sizing scheme that allowed customers to specify four separate garment measurements (such as waist-to-hip ratio and bra size)—akin to the approach used for tailoring men’s suits.

Following the lean start-up method, Nelson and Wallace then validated customer demand using a textbook-perfect minimum viable product, or MVP—that is, the simplest possible offering that yields reliable customer feedback. They held six trunk shows at which women could try on sample outfits and place orders. Of the 200 women who attended, 25% made purchases. Buoyed by these results, the cofounders quit their consulting jobs, raised $950,000 in venture capital, recruited a team, and launched Quincy Apparel. They employed a direct-to-consumer business model, selling online rather than through brick-and-mortar stores. At this point I became an early angel investor in the company.

Kalle Gustafsson/Trunk Archive

Initial orders were strong, as were reorders: An impressive 39% of customers who bought items from Quincy’s first seasonal collection made repeat purchases. However, robust demand required heavy investment in inventory. Meanwhile, production problems caused garments to fit poorly on some customers, resulting in higher-than-expected returns. Processing returns and correcting production problems put pressure on margins, rapidly depleting Quincy’s cash reserves. After Quincy tried and failed to raise more capital, the team trimmed the product line, aiming to simplify operations and realize efficiencies. However, the business lacked enough funding to prove out the pivot, and Quincy was forced to shut down less than a year after its launch.

So why did Quincy fail?

Quincy’s founders had a good idea. The venture’s value proposition was appealing to target customers, and the business had a sound formula for earning a profit—at least over the long term, after shaking out the bugs in production. The team had credible projections that customers in priority segments, who’d accounted for more than half of Quincy’s sales, would each have a lifetime value of over $1,000—well in excess of the $100 average cost to acquire a new customer. (Quincy’s out-of-pocket marketing costs were kept low by social-network-fueled word of mouth and enthusiastic media coverage.)

Were Wallace and Nelson simply poor jockeys? Temperamentally, their fit with the founder role was good. They were sharp and resourceful and had complementary strengths. Wallace, who was responsible for marketing and fundraising, had a big vision and the charisma to sell it. Nelson, who led operations, was deliberate and disciplined. However, the founder team wobbled in two important ways. First, unwilling to strain their close friendship, Wallace and Nelson shared decision-making authority equally with respect to strategy, product design, and other key choices. This slowed their responses when action was required. Second, neither founder had experience with clothing design and manufacturing.

A broad set of stakeholders, including employees, strategic partners, and investors, all can play a role in a venture’s downfall.

Apparel production entails many specialized tasks, such as fabric sourcing, pattern making, and quality control. To compensate for their lack of industry know-how, the founders hired a few apparel company veterans, assuming that they’d fill multiple functions—as jack-of-all-trades team members do in most early-stage start-ups. However, accustomed to the high levels of specialization in mature apparel companies, Quincy’s employees weren’t flexible about tackling tasks outside their areas of expertise.

Quincy outsourced manufacturing to third-party factories, which was not unusual in the industry. But the factories were slow to meet production commitments for entrepreneurs who had no industry reputation, required unusual garment sizing, and placed small orders. This meant shipping delays for Quincy.

Investors also played a role in Quincy’s demise. The founders had aimed to raise $1.5 million but managed to secure only $950,000. That was enough to fund operations for two seasonal collections. Before launching, the founders had correctly assumed that at least three seasons would be needed to fine-tune operations. Quincy had some traction after two seasons but not enough to lure new backers, and the venture capital firms that had provided most of its money were too small to commit more funds. Furthermore, the founders were disappointed with the guidance they got from those VCs, who pressured them to grow at full tilt—like the technology start-ups the investors were more familiar with. Doing so forced Quincy to build inventory, burning through cash before it had resolved its production problems.

In summary, Quincy had a good idea but bad bedfellows: Besides the founders, a range of resource providers were culpable in the venture’s collapse, including team members, manufacturing partners, and investors.

Could this outcome have been avoided? Perhaps. The founders’ lack of fashion industry experience was at the root of many problems. It took time for Wallace and Nelson to master the complexities of apparel design and production. Without industry connections, they couldn’t leverage their professional networks to recruit team members or count on past relationships with factory managers to ensure prompt delivery. And without an industry track record, they had difficulty finding investors willing to bet on first-time founders.

An ideal solution would have been to bring in another cofounder with apparel industry experience. Nelson and Wallace tried to do this, without success. They did have some advisers who could offer guidance—but adding more would have helped. In a postmortem analysis, Quincy’s founders also concluded that they could have sidestepped operational problems by outsourcing their entire design and production process to a single factory partner. Likewise, rather than raising funds from venture capital firms, they could have sought financial backing from a clothing factory. A factory with an equity stake in Quincy would have expedited its orders and worked harder to correct production problems. Also, the factory owners would have known how to pace the growth of a new apparel line, in contrast to Quincy’s VCs, who pressured the team for hypergrowth.

Many entrepreneurs who claim to embrace the lean start-up canon actually adopt only part of it, neglecting to research customer needs.

Quincy’s troubles shed some light on the attributes that may make start-ups vulnerable to this particular failure pattern. Entrepreneurs’ lack of industry experience will be especially problematic when large, lumpy resource commitments are required, as they are in apparel manufacturing: Quincy’s founders had to design a multistep product process from scratch, and revising such a process is disruptive once it’s in place. Another factor was ever-shifting fashion trends; the founders had to commit to garment designs and then build inventory for an entire collection many months before it went on sale.

With such challenges, learning by doing can result in expensive mistakes. Compounding the pressure, investors prefer to mete out capital one chunk at a time, waiting to see if the business can stay on the rails. If the start-up stumbles or stalls, follow-on financing may not be forthcoming from existing investors, and potential new investors will be scared off. Pivoting to a better solution isn’t feasible when it requires large amounts of capital along with weeks or months to see if new approaches are working. In that situation entrepreneurs have no room for big errors, but a lack of industry experience makes missteps all the more likely.

False Starts

I have long been an apostle of the lean start-up approach. But as I dug deeper into case studies of failure, I concluded that its practices were falling short of their promise. Many entrepreneurs who claim to embrace the lean start-up canon actually adopt only part of it. Specifically, they launch MVPs and iterate on them after getting feedback. By putting an MVP out there and testing how customers respond, founders are supposed to avoid squandering time and money building and marketing a product that no one wants.

Yet by neglecting to research customer needs before commencing their engineering efforts, entrepreneurs end up wasting valuable time and capital on MVPs that are likely to miss their mark. These are false starts. The entrepreneurs are like sprinters who jump the gun: They’re too eager to get a product out there. The rhetoric of the lean start-up movement—for example, “launch early and often” and “fail fast”—actually encourages this “ready, fire, aim” behavior.

The online dating start-up Triangulate experienced this syndrome in 2010. Its founder, Sunil Nagaraj, had originally intended to build a matching engine—software that Triangulate would license to existing dating sites such as eHarmony and Match. The engine would automatically extract consumers’ profile data—with their permission—from social networks and media sites such as Facebook, Twitter, Spotify, and Netflix. The engine would then use algorithms to pair up users whose tastes and habits suggested that they might be romantically compatible. But VCs wouldn’t back the plan. They told Nagaraj, “Come back after you’ve signed a licensing deal.”

To prove to potential licensees that the matching engine worked, Nagaraj decided to use it to power Triangulate’s own dating site, a Facebook app that would also leverage the rich user data available to Facebook’s platform partners. VCs now showed interest: Nagaraj raised $750,000 and launched a dating site called Wings. The site was free to use and earned revenue from small payments made by users who sent digital gifts or messages. Wings soon became Triangulate’s main event; the licensing plan went on the back burner.

Kalle Gustafsson/Trunk Archive

Wings automatically populated a user’s profile by connecting to Facebook and other online services. It also encouraged users to invite their friends to the site as “wingmen” who could vouch for them—and provide a viral boost to the site’s growth. Less than a year after launching Wings, however, Nagaraj’s team abandoned both the matching engine and the wingman concept. Users found more value in recommended matches that were based on potential partners’ physical attractiveness, proximity, and responsiveness to messages—criteria routinely employed by existing dating sites. The wingman role, meanwhile, was not delivering hoped-for virality and made the site cumbersome to navigate. Furthermore, many users were uncomfortable making their dating life an open book to their friends.

A year after launch, Wings’ user base was growing, but user engagement was much lower than expected. As a result, revenue per user fell far short of Nagaraj’s original projections. Also, with limited virality, the cost of acquiring a new user was much higher than his forecast. With an unsustainable business model, Nagaraj and his team had to pivot once again—this time, with cash balances running low. They launched a new dating site, DateBuzz, that allowed users to vote on elements of other users’ profiles—before seeing their photos. This addressed one of the biggest pain points in online dating: the impact of photos on messaging. On a typical dating site, physically attractive individuals get too many messages, and other users get too few. DateBuzz redistributed attention in ways that boosted user satisfaction. Less-attractive individuals were contacted more often, and attractive users still got plenty of queries.

Entrepreneurs should conduct a competitive analysis, including user testing of existing solutions, to understand the strengths and shortcomings of rival products.

Despite this innovation, DateBuzz—like Wings—had to spend far more than it could afford to acquire each new user. Lacking confidence that a network effect would kick in and reduce customer acquisition costs before cash balances were exhausted, Nagaraj shut down Triangulate and returned $120,000 to investors.

So why did Triangulate fail?

The problem was clearly not with the jockey or his bedfellows. Nagaraj had raised funds from a topflight VC and had recruited a very able team—one that could rapidly process user feedback and in response iterate in a creative and nimble manner. Weak founders rarely attract strong teams and smart money. This was not a case of “right opportunity, wrong resources,” as with Quincy’s failure. Rather, Triangulate’s demise followed the opposite pattern: “wrong opportunity, right resources.”

A clue about the cause of Triangulate’s failure lies in its three big pivots in less than two years. On one hand, pivots are foundational for lean start-ups. With each iteration, Nagaraj’s team had heeded the “fail fast” mantra. The team also followed the principle of launching early and often—putting a real product into the hands of real customers as fast as possible.

But there’s more to the lean start-up approach than those practices. Before entrepreneurs begin to build a product, lean start-up guru Steve Blank insists, they must complete a phase called “customer discovery”—a round of interviews with prospective customers. (See “Why the Lean Start-up Changes Everything,” HBR, May 2013.) Those interviews probe for strong, unmet customer needs—problems worth pursuing. In Nagaraj’s postmortem analysis of Triangulate’s failure, he acknowledged skipping this crucial step. He and his team failed to conduct up-front research to validate the demand for a matching engine or the appeal of the wingman concept. Nor did they conduct MVP tests akin to Quincy’s trunk shows. Instead they rushed to launch Wings as a fully functional product.

By giving short shrift to customer discovery and MVPs, Triangulate’s team fell victim to a false start—and turned the “fail fast” mantra into a self-fulfilling prophecy. If the team members had spoken to customers at the outset or tested a true MVP, they could have designed their first product in ways that conformed more closely to market needs. By failing with their first product, they wasted a feedback cycle, and time is an early-stage entrepreneur’s most precious resource. With the clock ticking, one wasted cycle means one less opportunity to pivot before money runs out.

Why do founders like Nagaraj skip up-front customer research? Entrepreneurs have a bias for action; they’re eager to get started. And engineers love to build things. So entrepreneurs who are engineers—like Nagaraj and his teammates—often jump into creating the first version of their product as fast as they can. Furthermore, at the risk of stereotyping, I’d offer that many engineers are simply too introverted to follow Blank’s advice and get out of the building to learn from prospective customers.

Founders without technical training also fall victim to false starts. They hear repeatedly that having a great product is crucial, so they bring engineers on board as soon as they can. Then, feeling pressure to keep those expensive engineers busy, they rush their product into development.

The good news is that false starts can easily be avoided by following a structured, three-step product design process.

1. Problem definition.

Before commencing engineering work, entrepreneurs should conduct rigorous interviews with potential customers—at which they resist the temptation to pitch their solutions. Feedback on possible solutions will come later; instead the focus should be on defining customers’ problems. Also, it’s important to interview both likely early adopters and “mainstream” prospects who may be inclined to purchase later. Success will hinge on attracting both groups, whose needs may differ. If their needs do vary, entrepreneurs will have to take the differences into account when formulating a product road map.

In addition, entrepreneurs should conduct a competitive analysis, including user testing of existing solutions, to understand the strengths and shortcomings of rival products. Likewise, surveys can help start-up teams measure customer behaviors and attitudes—helpful data when segmenting and sizing the potential market.

2. Solution development.

Once entrepreneurs have identified priority customer segments and gained a deep understanding of their unmet needs, the team’s next step should be brainstorming a range of solutions. The team should prototype several concepts and get feedback on them through one-on-one sessions with potential customers. Most teams start with crude prototypes, reject some and iterate, and then refine the ones that seem promising, gradually producing “higher fidelity” versions that more closely resemble the future product in functionality and look and feel. Prototype iteration and testing continue until a dominant design emerges.

3. Solution validation.

To evaluate demand for the favored solution, the team then runs a series of MVP tests. Unlike the prototype review sessions during step 2—conducted across the table with a single reviewer—an MVP test puts an actual product in the hands of real customers in a real-world setting to see how they respond. To avoid waste, the best MVPs have the lowest fidelity needed to get reliable input—that is, they provide no more “looks like” polish and “works like” functionality than are strictly necessary. Early MVP tests may take things further, assessing demand for a planned product through a Kickstarter campaign or by soliciting letters of intent to purchase from business-to-business customers.

Success with the product design process may require a shift in the founders’ mindset. At a venture’s outset many entrepreneurs have a preconceived notion of the customer problems they’ll address and the solutions. They may fervently believe they’re on the right path. But during the product design process, they should avoid being too emotionally attached to a specific problem-solution pairing. Entrepreneurs should stay open to the possibility that the process will uncover more-pressing problems or better solutions.

Maintaining Balance

Of course, there is no way for founders to know which deadly trap they may face as they launch. Familiarizing oneself with these two dominant failure patterns can help. But so too can understanding why they afflict start-ups so frequently.

Part of the answer is that the behaviors that conventional wisdom holds make a great entrepreneur can paradoxically increase the risk of encountering these failure patterns. It’s important for an entrepreneur to maintain balance. Guidance based on conventional wisdom is good—most of the time—but it shouldn’t be followed blindly. Consider the following advice given to many first-time founders and how it can backfire:

Just do it!

Great entrepreneurs make things happen and move fast to capture opportunity. But a bias for action can tempt an entrepreneur to truncate exploration and leap too soon into building and selling a product, as I’ve explained. When that happens, founders may find themselves locked prematurely into a flawed solution.

Be persistent!

Entrepreneurs encounter setbacks over and over. True entrepreneurs dust themselves off and go back at it; they must be determined and resilient. However, if persistence turns into stubbornness, founders may have difficulty recognizing a false start for what it is. They likewise may be reluctant to pivot when it should be clear that their solution isn’t working. Delaying a pivot eats up scarce capital, shortening a venture’s runway.

Bring passion!

A burning desire to have a world-changing impact can power entrepreneurs through the most daunting challenges. It can also attract employees, investors, and partners who’ll help make their dreams a reality. But in the extreme, passion can translate into overconfidence—and a penchant to skip critical up-front research. Likewise, passion can blind entrepreneurs to the fact that their product isn’t meeting customer needs.

Bootstrap!

Because resources are limited, entrepreneurs must conserve them by being frugal and figuring out clever ways to make do with less. True enough, but if a start-up cannot consistently deliver on its value proposition because its team lacks crucial skills, its founders must decide whether to hire employees with those skills. If those candidates demand high compensation, a scrappy, frugal founder might say, “We’ll just have to do without them”—and risk being stuck with bad bedfellows.

Grow!

Rapid growth attracts investors and talent and gives a team a great morale boost. This may tempt founders to curtail customer research and prematurely launch their product. Also, fast growth can put heavy demands on team members and partners. If a team has bad bedfellows, growth may exacerbate quality problems and depress profit margins.

. . .

It’s fashionable in start-up circles to speak glibly about failure as a badge of honor or a rite of passage—just another phase of an entrepreneur’s journey. Perhaps doing so is a coping mechanism, or perhaps failure’s ubiquity inures those in the business world to its true human and economic costs. I’ve counseled dozens of entrepreneurs as they shut down their ventures. Raw emotions are always on display: anger, guilt, sadness, shame, and resentment. In some cases the founders were in denial; others just seemed depressed. Who could blame them, after having had their dreams dashed and their self-confidence shattered? In my work I try to help people come to terms with failure, but I can tell you that at ground zero, there’s no way to avoid the fact that it hurts. It also can destroy relationships. When they founded Quincy Apparel, Nelson and Wallace vowed not to let conflict over the business threaten their close friendship. But after clashing over how to wind the company down, they weren’t on speaking terms for two years. (Their relationship has since been repaired.)

Failure also takes a toll on the economy and society. A doomed venture ties up resources that could be put to better use. And it acts as a deterrent to would-be entrepreneurs who are more risk-averse, have financial obligations that make it hard to forgo a paycheck or face barriers when raising capital—which is to say, many women and minorities. To be sure, failure will (and should) always be a reality for many entrepreneurs. Doing something new with limited resources is inherently risky. But by recognizing that many failures are avoidable and follow the same trajectory, we can reduce their number and frequency. The payoff will be a more productive, more diverse, and less bruising entrepreneurial economy.

Editor’s note: This article was adapted from the book Why Startups Fail: A New Roadmap for Entrepreneurial Success, by Tom Eisenmann (Currency, 2021).A version of this article appeared in the May–June 2021 issue of Harvard Business Review. Read more on Entrepreneurial management or related topics Entrepreneurship, Start-ups and Business failures

• Tom Eisenmann is the Howard H. Stevenson Professor of Business Administration at Harvard Business School, the Peter O. Crisp Faculty Chair of the Harvard Innovation Labs, and the author of Why Startups Fail: A New Roadmap for Entrepreneurial Success (Currency, 2021).

In real life situations, performance appraisal is a daily activity as it is also to organisations. We evaluate our activities daily, weekly, monthly or yearly to see our achievement and, challenges, correct our mistakes and set new targets.

More so in organisations. The continued success of organisations is dependent on its employees who in all thinking is the primary resource.  Their development and retention is a critical success factor if it must meet with its present and future requirements and surpass same.

Performance appraisal sometimes referred to as performance evaluation or personnel evaluation, is very important in Human Resource Management, a tool that places high in people Management. Other factors / functions which contribute to employee development are staff orientation and career development and all these add-up to enhance organizational effectiveness.

Infact, performance appraisal is a fulcrum on which major HR activities revolve.  Many informed decisions such as promotions, wage hikes, transfers, terminations, job rotation, job enlargement, succession planning etc emanates from this. Again, allocation of organizational resources is facilitated by performance appraisal too.

What is Performance Appraisal?

“Performance appraisal is the process by which an organization obtains a feedback about the effectiveness of its employees”. It is the evaluation of employee’s job performance and contributions to the organisation. In other words, it is a mechanism through which employees and the organization obtain feedback and provides organisation with assessment data for present and future use. It is the measurement of performance against set and agreed target over a given period of time so as to obtain to obtain feedback.

The purpose of Performance Appraisal stems from the need to improve organizational efficiency by ensuring that employees perform to the best of their ability and also develop their potentials for improvement. A good performance appraisal or management system is designed to serve two (2) main purposes:

1. Evaluative purpose and
2. Developmental purpose

Evaluative Functions: This function helps to promote or reward higher performance while at the same time assists to determine low performance.

Development Function: On the other hand, this performance appraisal function is useful in determining training needs of the subordinates while at the same time motivates them to higher performance.

Unfortunately, many people lay more emphasis on the evaluative function to the neglect of the developmental function.

A good organization should have a well laid down policy on employee performance management and the potential of each employee to access his/ her future development.

Performance appraisal must be seen as a result-oriented machinery for the growth of individual and company and not as firing squad or punitive measure. You should note that organisations decide on what performance appraisal system to be adopted based on its laid down policy, suitability and operational modus.

Performance appraisal is either open or closed. The open system is profound in the private sector while the closed system is more practiced in the public sector.

Performance appraisal can be classified under two broad systems: Individual and Multi-Person Appraisal Systems.

Individual Appraisal Method:

In the individual appraisal method, employee’s performance is studied over a given period. This is aimed at identifying their strengths and weaknesses. Examples of these are Annual Confidential Reports, Essay Evaluation, Management by Objectives (MBO) and Check List Methods.

• Confidential Reports:

Perhaps, this is the oldest method. It is a report prepared by employee’s senior/ supervisor wherein he/ she highlights the subordinate’s strength and weaknesses in the past year. The flaw about this method is that the feedback on the report prepared is not disclosed to the employee for whom this has been written because every report is kept confidential.

• Critical Incident and Checklist Techniques:

In the critical incident technique, the superior studies and analyze the subordinate’s best and worse incidents of behavior in the past year; analyzing the most critical incidents while in the checklist method, the supervisor is given a paper that has set of statements that are expressive and purpose in nature, and the answers to which are either YES or NO. Here, the usual and typical questions are whether/ or not the performance was satisfactory and whether or not the standards were met.

Multiple Persons Appraisal Methods:

The multi-person appraisal method compares the performances of the employees in a particular department and are pitted against one another to identify the best performers and the worst performers. Examples of multi-person appraisal methods are Ranking System, Paired Comparison, Forced Distribution, Performance Tests and 360-Degree Appraisal.

• Paired Comparison Method:

In this technique, the superior compares each individual to all the other individuals working in the team and the subordinates are all ranked on the basis of criteria and traits analyzed. The comparison method could be from the best to the worst or the worst to the best.

• Management by Objective (MBO)

The Management by Objective (MBO) is the well-known technique for setting goals, then judging how they are met; it emphasizes on tangible and measurable goals. The Key Result Areas (KRA) and the means to attain maximum results are concentrated upon. This system gives the superior the opportunity of knowing his/ her team’s KRAs and the results expected at the end of the year/ or given period. In this method, the job is delegated and the authority, responsibility and relationship is defined.

In this method, both the supervisor and the subordinate discuss, negotiate and agree the goals to be attained over a period. The objectives/ target are expected to adhere to the SMARTER rules – Specific, Measurable, Agreed, Realistic, Time-bound, Ethical and Recorded.

• 360-Degree Method:

The 360-degree appraisal method involves various stakeholders – the employee’s immediate supervisor, other supervisors who are not the bosses but comes in contact with the employee/ appraisee on a daily basis, the top management, and the employee’s subordinates as all provide data/ information on his/ her performances.

All 360-degree of employee working and working styles are analyzed involving the whole cycle of individuals with whom the employee comes in contact or interacts with on the course of work. The feedback from the appraisal is passed on to the employee for increased performance.

Why do we conduct Performance Appraisal?

Performance appraisal aims at regularly assessing and reporting on subordinate’s performances, attainment, abilities and potentials for future development. It further seeks to:

• Clarify the Key Result Areas (KRA) of the job and provide basis to agree on targets and standards of performance for a given period;
• Assess performance of employees and agree on how to foster continuous improvement;
• Provide opportunity for a formal recognition and documentation of performances (the subordinate has opportunity to bring certain achievements or constraints being experienced on the job to the attention of the boss, his/ her career plans and aspirations);
• Generate information for management’s decision-making on issues like promotion, transfers, succession planning, job rotation, job redefinition, disengagement etc;
• Determine employee potentials and provide guided development;
• Provide opportunity for identifying individual training and developmental needs;
• Take stock of skills and talents available, strength and weaknesses of employees in the organization
• Provide feedback to employees on how organization view their (employee) performances;
• Improve communication by compelling superiors and subordinates to hold periodic dialogue/ meeting and provide feedback;
• Provide basis for reward decisions – merit increases, reassignment and expatriation
• Generate data/ information upon which workplans, budgeting and HR Planning can be based
• Inform job distribution/ redesign, job enlargement, career planning and development;
• To provide a ready tool for evaluating the effectiveness of selection and placement decisions;
• Identify training and development needs for individual employees and entire teams/ divisions within the organization;
• Provide a good criteria for assessing the success or otherwise of previous training and development efforts
• Help in determining salary related decisions;
• Serve as a counseling forum;
• Emphasize the strength and weaknesses of employees;
• Improve motivation

Conclusion:

Without mincing words, it must be stated that performance appraisal is key to the success of organisations as managers constantly make judgments about their subordinates based on performance appraisal and are expected to provide periodic feedbacks.

To make feedback a powerful instrument in performance appraisal and in improving the level of satisfaction, performance appraisal must not only be based on an objective criteria, but such criteria should have been jointly put in place and agreed between the supervisor and subordinate as employees who are involved in actually setting their own goals tend to perform at higher levels.

Contributed by Agolo Uzorka, CEO/ Lead Consultant, Eugene + George Consulting Limited

The Lagos State Government has announced that it has placed 4,000 unemployed graduates on N40,000 monthly salary for a period of 6 months.

The initiative which is implemented through the Ministry of Wealth Creation and Employment’s Graduate Internship Placement Programme (GIPP) is intended to address the challenge of unemployment among unemployed graduates in Lagos State.

This disclosure was made by the Lagos State Commissioner for Wealth Creation and Employment, Mrs Yetunde Arobieke, during the 2021 Ministerial Press Briefing in commemoration of the Second Year in the Office of Governor Bababjide Sanwo-Olu.

Arobieke said the programme, which was planned to last for six months, was meant to expose interns to a particular job, profession or industry and enhance networking.

She pointed out that through this initiative, interns will be given the opportunity to excel and possibly learn a job with the organisation; as they are exposed to professional skills and interpersonal relationships in a structured setting.

Source: Information Nigeria

It was the middle of July 2008, and I had just bought an expensive power suit for a job interview. After being laid off during the height of the recession and unemployed for about six weeks, I was feeling desperate and willing to spend money on anything that might put my career on track.

Surprisingly, the train was running on time that day, which gave me the opportunity to take my new jacket off, sit back, and prepare for this meeting one last time. At my stop, I realized I was so intently focused that I didn’t notice a robbery happening right under my nose. The jacket was gone.

With nothing but an inappropriate tank top on, I was mortified but decided to go for it anyway. I proceeded to meet all of the organization’s department heads, during which time my thoughts repeatedly returned to my improper attire. But believe it or not, I ended up getting the job.

Even though my story had a happy ending, there’s no doubt the pressures of the interview process had me unnerved. Anything can happen before or during an interview, which is why it’s crucial to walk in feeling prepared — even if your jacket has just been stolen.

Interviewers will be focused on finding out if you’re the right fit for the position, but it’s also important to decide if the company is the right fit for you. Have a list of questions to ask in a  job interview.

Your role

Be careful not to ask questions already answered in the job description. It’s important to go beyond those general duties to understand everything the job entails.

1. Can you offer specific details about the position’s day-to-day responsibilities?

2. What would my first week at work look like?

3. How does this position contribute to the organization’s success?

4. What do you hope I will accomplish in this position?

5. How does the company culture affect this role?

6. What job shadowing opportunities are available for an applicant before they accept an offer?

Proceed with caution: If rather than going into detail about the primary responsibilities listed in the job description, the employer rambles off many more duties — they may be asking you to take on more than you initially thought. How to Read a Job Description

Getting to know the interviewer

Most likely, the interviewer is the first contact you’ll have at this company — they could even be your future boss. Asking questions can help you understand their attitude, company values, and where the company’s future is heading.

7. What do you enjoy most about working here?

8. Why are you working in this industry?

9. Can you walk me through your typical work day?

10. What is your greatest accomplishment with the company?

11. What is your team’s greatest accomplishment?

12. What goals do you have for the company, yourself, and employees over the next five years?

13. What hobbies do you have outside of the office?

Proceed with caution: Be wary of leaders who have trouble opening up or don’t seem passionate about their company and team. How to Find the Perfect Company

Management’s style

What type of management style do you need to reach the height of your potential? Now’s the best time to see if the company’s leaders align with your expectations.

14. How do leaders encourage employees to ask questions?

15. How do leaders set employees up for success?

16. How does employee feedback get incorporated into day-to-day operations?

17. How does management deliver negative feedback to employees?

Proceed with caution: Employers who can’t list how they encourage employees and set them up for success may not deliver the support you’re looking for in a company.

Company culture

From benefits and perks to the ways employees interact with each other, not meshing with a company’s culture can put a roadblock on your path to success.

18. What is your work culture like?

19. How would you describe the work environment here?

20. What benefits are focused on work-life balance?

21. What benefits and perks does the company offer?

22. What is the outline of your telecommuting policy?

23. How frequently do employees make themselves available outside of normal working hours?

Proceed with caution: Listen closely to how the interviewer describes the company’s benefits and environment to be sure it’s the right culture for your personality and working style. What Aspects of Company Culture Matter Most for Your Next Job

Company reputation

After doing some research, you should already know a few things about the company’s reputation. Now it’s time to dig a little deeper to make sure this is a place where you’ll thrive.

24. What’s your mission statement?

25. How often is a new hire the result of a previous employee quitting?

26. Why do most employees leave the company?

27. How would employees describe the company and its leaders?

28. What are the company’s biggest problems? How are they overcoming them?

29. What do you want the company to be known for among employees — past, present, and future?

Proceed with caution: Quality leaders will be the first to admit that their company isn’t perfect. Interviewers who claim they would change nothing might be failing to grow and make positive changes.

Performance measurements

Knowing a company’s expectations and how they measure goals before accepting a job offer helps you decide if their style matches with what motivates you.

30. How are employees recognized for their hard work?

31. How involved are employees in the structuring of their own goals and tasks?

32. What are your views on goals, timelines, and measuring success?

33. How often are employees expected to provide status updates on a project?

34. How often do you evaluate employee performance?

Proceed with caution: Wanting constant updates and control over employee tasks are warning signs of a micromanager.

Future co-workers

The employees at this organization could be your next team. Make sure you’re positive this is a group you want to be a part of.

35. Can you tell me about the team I’ll be working with?

36. How competitive are your employees?

37. How do you develop teamwork skills among employees?

Proceed with caution: A competitive environment can be fun and motivating, but a lack of teamwork in the office could point to a cutthroat company.

Opportunities for growth

What is your ultimate career goal? Set yourself up for success by finding out how far this new position could take you on your career path.

38. What type of mentor system do you have in place?

39. What type of educational/training opportunities does the company offer?  

40. What advancement opportunities are available?

41. How do leaders promote employee growth and success?

42. What does it take to be a top performer at this company?

Proceed with caution: If an interviewer is unable to share how you can advance within the company, chances are you might not be able to grow at the rate you want.

Moving forward

Don’t leave the interview with any questions unanswered — for you or the interviewer. This is your final opportunity to make sure you’re both on the same page before you walk out the door.

43. What’s the next step of this process, and when can I expect to hear from you?

44. Is there any other information I can provide you with?

45. Would you like to see more examples of my work?

Proceed with caution: Interviewers who don’t have a lot to offer on next steps may already have another candidate in mind or might not be in a big rush to hire. Remember to stay positive and continue to job search until you’re officially hired.

Courtesy: Glassdoor