Business Education

You Promoted Your Star Employee. Now They’re Struggling. Don’t Panic—Read This

Almost nothing can cut an entrepreneur deeper than misjudging the aptitude of a long-time employee. It’s an almost unbelievable and unbearable situation: giving a strong team member a shot at management only to learn the individual isn’t up to performing on the next level. Such a circumstance surely prompts a business owner to question their own instincts. Aside from the shock is what to do to resolve the problem.

Navigating the Promotion Pitfall: What Small Business Owners Can Do When a Star Employee Struggles in a New Role

Promoting a top-performing employee is one of the most rewarding decisions a small business owner can make. It recognizes hard work, boosts morale, and fills key positions internally. However, what happens when that promotion doesn’t pan out?

The employee, once a standout in their previous role, now falters under the demands of greater responsibility—a classic case of the Peter Principle in action. For small businesses, where every team member counts, this scenario can disrupt operations and strain relationships. The good news? There are proactive, compassionate strategies to address it without losing valuable talent.

1. Assess the Situation Objectively

Before taking action, step back and assess the situation. Is the issue skill-based (e.g., lacking managerial experience) or something else, like burnout or mismatched expectations? Schedule a candid, private conversation with the employee to discuss their challenges. Utilize tools such as performance reviews or 360-degree feedback from peers to gather valuable insights. In a small business, this personal touch can reveal if the promotion was premature or if external factors are at play. Remember, admitting a misstep early prevents bigger problems down the line.

2. Invest in Training and Support

Often, the employee just needs a bridge to success. Offer targeted training, such as leadership workshops, online courses, or mentorship from you or an external coach. Pair them with a seasoned colleague for shadowing, or implement a performance improvement plan (PIP) with clear, measurable goals and timelines—say, 30-60 days. This approach shows commitment to their growth and can turn things around. For cash-strapped small businesses, free resources like SCORE mentoring or LinkedIn Learning can be game-changers.

3. Consider a Graceful Demotion or Lateral Move

If training doesn’t yield results, demotion might be necessary, but frame it as a “role realignment” to preserve dignity. Explain how returning to their strengths benefits the company and them—perhaps with a title like “senior specialist” to maintain status. Alternatively, explore lateral moves to roles that leverage their skills without the added pressure. In small teams, this flexibility can help maintain high morale and retain institutional knowledge. Always document discussions to protect against potential legal issues, and consider offering incentives, such as a bonus, to ease the transition.

4. Foster a Culture of Open Communication and Learning

Prevent future pitfalls by building a promotion process that includes trial periods or assessments. Encourage employees to voice concerns about readiness for advancement. As a small business owner, lead by example: Share stories of your own career hiccups to normalize setbacks. This creates a resilient team where promotions are seen as opportunities, not traps.

Ultimately, handling a failed promotion thoughtfully can ultimately strengthen your business. It demonstrates empathy, fairness, and strategic thinking—qualities that attract and retain top talent. By viewing it as a learning experience, you’ll not only salvage a great employee but also refine your leadership for long-term success.

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You can call us for your free appointment at 480-636-1720, or, if you prefer, Waters Business Consulting Group to learn more about us and the services we offer.

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How to Best Help Your Remote Workers Avoid Burnout

January 27, 2021 No Comments

Employee burnout. It’s a real problem, even when team members are working from home. (In fact, the issue can easily be exacerbated because there’s more pressure to perform amidst an atmosphere that’s not necessarily conducive to working and is also filled with distractions.) Just because people are working in a comfortable, familiar environment doesn’t mean they don’t still feel a sense of duty, responsibility, and pride. Ultimately, it’s these emotions which can undermine them and lead to employee burnout. So, read on to learn how to deal with these situations. Common Signs of Employee Burnout The most common signs of employee burnout are behaviors like disengagement, absenteeism, and lack of motivation and productivity. During virtual meetings and phone conferences, anyone who is suffering from burnout won’t be as engaged, will skip more and more meetings, and their attitude won’t reflect being motivated and/or productive. During any time of high unemployment, people are often afraid to take vacation, request work flexibility, or advocate for their work-life balance, mental health, and overall wellness–unless the company culture encourages them to. But with the added emergency-paradigm shift to remote work, which most workers and leaders alike have never experienced before, the challenges of how to communicate and find solutions to promote mental well-being are even more daunting. —Inc.com But, those aren’t the only signs of employee burnout. There’s also irritability, job dissatisfaction, and lack of achievement. People who are feeling burned out will probably be irritable, express to fellow team members their dissatisfaction, and will also tell others they don’t feel like they are achieving anything of value. 3 Effective Ways to Help Remote Workers Avoid Burnout Thankfully, there are ways to help remote workers avoid burnout. And, it won’t upend your operation or even cost very much. All you need to do is give them encouragement, let them have a good amount of autonomy, and say “Thank you,” in different ways. Here are some of the best ways to help your remote employees avoid work burnout: Acknowledge hard work. Just because someone isn’t in the office or on the job in a specific location doesn’t mean they aren’t giving it their all. As mentioned above, it can be very challenging to work from home precisely because it’s not equipped the same way as the workplace, and they must deal with all kinds of distractions. That means you should take the time to acknowledge their hard work. Focus on results, not hours. Sure, time spent on productivity is important. But, it’s certainly not more important than the end result. Instead of putting emphasis on the hours they spend “on the clock,” put your focus on outcomes — these are a far better measure of their efforts. Offer welcome and helpful perks. It’s also very helpful to give your employees some tools to reduce stress and access to positive experiences. Things like gym memberships, paid time off, and other perks can work wonders and bring a real strong return on investment. What other suggestions do you have? Please feel free to share your thoughts and experiences to help others. Your unique perspective and input could be of great benefit! Interested in learning more about business? Then just visit Waters Business Consulting Group.

The T-Mobile-Sprint Merger Raises these Important Questions

May 9, 2018 No Comments

The T-Mobile-Sprint merger is generating a plethora of headlines. Some think it’s a bad idea. Others believe it will provide certain benefits. Still others don’t see a clear winner. Regardless of where you stand, it does raise a few interesting questions. We all understand what a merger is — the combining of two entities into one. But, there’s a lot more to it than just this simple explanation. The truth is, there are distinct advantages and disadvantages of merging two organizations. Common Merger Disadvantages Let’s begin with one of the most obvious pain points — employee morale. The reason two brands come together is to improve their performance. However, this often means the elimination of duplicate roles. And, rank-and-file employees instinctively know this fact. Another downside to merging is that it can create more debt. Teaming up means taking on the balance sheet obligations, which can easily become problematic. …making changes to your business include the economic and political climate in which you operate. Determine whether tax or trade laws in your region are friendly toward the types of modifications you want to make. You may come to the conclusion that now is a good time to move forward with the desired alterations or you may elect to wait for circumstances to change in your favor. —Bix Fluent.com Then, there’s another intangible — company cultures. One organization might operate with a completely different dynamic than the other. Which might manifest trouble when the two become one entity. Of course, merging means the essential elimination of the top decision maker. Instead, there are at least a few people on either side of the aisle. Biggest Merger Advantages Now, let’s take a look at the upsides of merging. The point of coming together is to improve the performance and ensure a better future for both companies. Here are the top merger advantages: Improved efficiency. We’ve already partially mentioned this but here’s the other side of eliminating redundant positions — increased efficiency. A merger can provide a new environment to improve efficiency on many levels. New territories. When two companies come together, it’s likely that one (or both) parties will benefit from the introduction of new territories. It’s a way to tap into market share without undergoing the growing pains. Cost-effective expansion. Speaking of growing pains, a merge creates an opportunity to expand without all the normal hassles. It allows for the identification of the best assets, which means increased productivity. Multiple growth opportunities. Two previously competing businesses combined as one opens up a number of growth opportunities. Instead of working to beat one another, they now work in unison toward one or more goals. What other consideration would you factor into such a decision? What experiences have you had in this scenario? Please feel free to share your thoughts by leaving a comment! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Two Rockstars, One Promotion—Here’s How Smart Managers Make the Toughest Call

July 10, 2025 No Comments

When two exceptional employees are vying for the same promotion, the decision becomes one of the most challenging yet crucial choices a small business owner can make.