Use the Performance-Values Matrix to decide who to fire and who to promote
It can be difficult for companies to really live up to their aspired values. There's a difference between what a company proudly proclaims to be their core values and the way they actually behave. The greater this discrepancy is, the more changes to improve the company culture need to be made.
The way company values are set are through actions, not words: employees are likely to follow the leaders' example and not what is written on the wall. If the leaders in the company work hard, their employees will tend to work hard as well. But the same applies the other way around. However, employees will not always be able to see with their eyes whether the leaders of the company work hard or not, especially in big companies. This is where managers come into play: employees will observe the behaviors that will lead managers to praise or promote some of the workers, and also the negative behaviors that managers tolerate, and they will act in accordance to what they have observed.
In other words, employees will behave according to what the managers and the company leadership value, and not according to the company's publicly-stated values.
Trinity Ventures' Dr. Cameron Sepah uses the "Performance-Values Matrix" to evaluate their employees on their performance and on how they represent the company's values, giving to both the same importance. By doing so, they make a real effort to keep the company culture strong. According to this evaluation system, employees that are top performers but do not fit the company's culture can only earn 50% of the maximum evaluation score. Thus, behaviour that is incongruent with the company values will not be tolerated, even if it comes from a very productive employee.
The Performance-Values Matrix is used to decide which employees should be promoted, which should be fired, which should be moved, and which should be warned to change their behavior.
This is how the Matrix works:
Identify "incompetent assholes" - fire them quickly
These are workers who are ineffective at their jobs and they also don't live up to the company's values. They should be fired as soon as possible because they do not help the company in any way and they hurt the other employees' performance.
Identify "competent assholes" - remediate or fire them
These are top performers, but their behavior in the workplace can lead to issues with others in the company. Their behavior suggests that they are not a good value-fit in the company. Given that they are very productive workers, they are given the chance to improve their behavior significantly. However, if they do not to so in the pre-established period of time, they should be fired.
They should enter what Dr. Cameron Sepah calls a “Values Improvement Plan”, in which the employee's co-workers and his or her manager participate to evaluate the progress of said employee. It can also include visiting a psychologist to address the employee's behavior.
Identify "incompetent nice guys" - manage or move them
These are the opposite to "competent assholes": they fit the company's culture very well but they are bad performers. The way to treat them is to make them enter a performance improvement plan, so that they can receive training in order to improve their performance. In other cases, when you feel that their personal strengths do not fit what they are being asked to do at their current job, they can be moved to a different role in the company, to see if they perform well there. If they continue to perform weakly, however, they should be fired.
Identify "competent and outstanding nice guys" - promote them
These are what most of the employees should be like, ideally. They should be praised with pay raises and promotions. They are the current or future leaders of the company, so it is very important to keep them happy and recognize their value to the company.