What if your rainmaker is drowning your firm’s morale?

Robert Siegmann knew he had a problem on his hands when he and his co-workers found themselves orchestrating “secret” meetings to avoid dealing with a fellow adviser known for being particularly cantankerous.

In fact, some co-workers expressed reservations about showing up for work or went out of their way to bypass certain parts of the office to avoid incurring the adviser’s wrath.

“Things didn’t get done when he was in the room,” said Mr. Siegmann, chief operating officer and senior adviser with Financial Management Group Inc., which has $175 million in assets and 13 employees. “It really broke down the atmosphere of having a team approach. You had this complete disconnect between him and the rest of us.”

So even though the adviser made a lot of money for the firm, the decision was made to cut him loose.

“He was an extremely talented individual,” Mr. Siegmann said. “But there was always tension in the air when he was around, and we had to let him go.”

Difficult or disruptive employees are every manager’s worst nightmare. In addition to making life in the office miserable for other workers, such employees can quickly turn a firm’s culture from collaborative to conspiratorial and encourage good employees to look for greener pastures. What’s more, their complaining, sniping or nosiness is likely to be picked up on by clients or potential clients.

Interest in how to cope with difficult employees has peaked in recent years due to the strife that arose with the faltering economy. That’s particularly true among advisory firms, where workplace tension seems to rise and fall with the stock market.

“This has become an issue particularly in the past few years when we’ve had a lot of peaks and valleys and volatility in the markets,” said Paul Sorbera, president of Alliance Consulting Ltd. “It translates to individuals and can cause more problems in the office where people are yelling and screaming at each other.”

Just about every office in every company in every industry has its share of hard-to-handle employees. But many advisory firms — like law firms or even doctors’ offices — are different in that much their revenue is likely to come from just a handful of employees. Firing or encouraging one of those individuals to leave will almost surely result in a significant loss of clients and their assets.

“Firms are forgiving of bad behavior if someone is making money,” said Greg Slamowitz, co-founder and co-chief executive of Ambrose Employer Group, a consulting firm. “They’re so focused on portfolio performance that they’ll overlook someone who isn’t a good cultural fit in the organization.”

It is not just rainmakers who can cause a toxic workplace. Support staff can cause just as many problems as a senior adviser. Yet many advisory firm owners are so focused on taking care of their clients that they are completely unaware of conflict or tension in the workplace around them — until it’s too late, that is.

That’s what happened to Heather O’Neill, president of Michigan Financial Advisors Corp., which manages about $90 million in assets. Ms. O’Neill said she was so preoccupied with building her business that she was caught off guard when she learned that her lead administrative assistant was being rude to co-workers and refused to train new employees.

“She just flat-out wouldn’t work with anyone else on the team except for me,” she said. “She wouldn’t speak to the staff. She was so tough on so many different levels.”

The tension was so thick that one of the firm’s advisers, Dawn Evola, considered looking for a new job.

“It was a difficult situation,” Ms. Evola said. “I stayed in my office all day and did what I needed to do.”

Ms. O’Neill ultimately decided that she had no choice but to fire the administrative assistant.

Of course, that was easier said than done. On the day that she planned to dismiss the woman, Ms. O’Neill got so nervous that she vomited. After settling her nerves, she decided to take her to lunch.

“I asked her what we can do, and her response was, “I’m angry, and I’ll be angry forever,”’ Ms. O’Neill recalled. “I truly had to say, “that’s a dealbreaker.’” She fired the woman.

Ms. O’Neill made the right choice, experts said .

Firing any employee is difficult, but it’s almost always the best course of action.

“Your high performer could be squashing someone else from doing a good job,” said Mary Hladio, president of Ember Carriers Leadership Group, a consulting firm. “You could actually be losing money by keeping them.”

James Barnash, assistant vice president at Capital Analysts Inc., a financial advisory consulting firm, recalled his days at another firm when he had to encourage an adviser who brought in about $400,000 in revenue to look for other work. The adviser, said Mr. Barnash, constantly carped about his job to other advisers.

“Advisers kept telling me they hated coming to work,” he said. “By cutting him, I hung on to half a dozen other advisers that I would have lost.”

Before it gets to that point, however, here are a few tips for rehabilitating difficult employees:

Be upfront with your concerns. As soon as a problem arises, schedule a meeting with the em-ployee who is causing the problem and raise your concerns — as plainly as possible. After that, it’s good to encourage the employee to come up with his or her own solutions to the problem by asking such questions as, “What can you do differently?”

It’s also important at this meeting to try to drill down to what’s causing the employee to behave in an offensive manner, said Alliance Consulting’s Mr. Sorbera.

To do that, he suggests asking the employee about what’s happening at home and at the office. Sometimes, he said, the solution is as easy as moving two employees away from each other because their personalities conflict.

Make your expectations clear. Make sure you articulate your expectations for how all employees are expected to behave on the job, both in terms of their job performance and the way they interact with co-workers. These expectations should be written down and handed out to all employees. Mr. Slamowitz, for example, makes sure his firm’s core values are posted everywhere, and that employees understand that exhibiting these values is as important as completing their job tasks.

Create a performance improvement plan. Difficult employees can be rehabilitated and transformed into above-average workers. The key to doing that is to develop a written performance improvement plan, which sets up specific obtainable goals for the employee to show measured improvement over a period of at least six weeks.

The goals should relate specifically to the problem behavior, Mr. Sorbera said. If an employee has been yelling in the workplace, then one goal is to avoid outbursts. A follow-up meeting should be scheduled to discuss progress.

E-mail Lisa Shidler at [email protected].