When a so-called problem employee is about to be transferred into another department, the real problem is the expectation that this individual is going to be a bundle of difficulties. If you expect to have trouble with this individual, you immediately increase the likelihood of finding it.
When managers have negative expectations about employees, they tend to act in a way that actually generates undesirable behaviors. At the same time, when managers expect positive behaviors from employees, they tend to act in a way that brings such behaviors out.
At this point, the best step is to approach this new employee with an open mind and positive expectations. After all, it is possible that this individual earned the label of problem employee because of his dealings with a co-worker or boss who may actually have caused the questionable behavior in the first place.
And, if it turns out that this individual has a scorched reputation for a reason, you should apply the same standards and counseling that would be used for any of your employees. Depending upon his response, you should have no problem figuring out what your next step should be.
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