How to Fire an Employee: 4 Ways to Make the Process Kinder
Make the dreaded act less painful for everyone.
Opinions expressed by Entrepreneur contributors are their own.
Hands down, the hardest part of my job is letting an employee go. Even the word "fire" makes people cringe and lower their eyes. But as any business leader knows, sometimes, the right thing to do for the company is to dismiss an employee. It is, after all, pretty common. Forty percent of Americans have lost a job, according to a recent Harris poll. So how can you make the dreaded process go smoothly, both for the employee and the person doing the firing? By doing it respectfully.
A study of nearly 20,000 employees around the world from Harvard Business Review and Tony Schwartz found that being treated with respect was the most critical thing they wanted from their employer. They ranked it higher than recognition and appreciation, providing useful feedback or opportunities for learning, growth and development.
This respect should extend to when things aren't working out. Here are my four strategies for terminating a contract with compassion and integrity.
Related: When Is It Time to Fire an Employee?
1. Make sure you offer opportunities for improvement first
At my company, Hint, we have two types of terminations: performance-based and attitude-based. If a staff member isn't meeting clear criteria, we would never just let them go. We make sure their manager has an extensive conversation with that employee to let them know where they missed the mark. Together, they'll strategize ways for the employee to succeed. That way, the employee is aware of their performance and becomes part of the solution.
We then give the employee a timeline — typically between 30 to 90 days — and schedule check-ins along the way, helping us gauge whether a staffer can continue with the company. They usually show progress, because goals are broken down into manageable milestones. A study from the University of Michigan found that 76 percent of participants who wrote down their goals and actions and provided weekly progress to a friend achieved their goals. But if the employee still hasn't made progress by the end of the trial period, it's time for that hard conversation.
We're especially careful when an employee appears to have a negative attitude or exhibits toxic behavior. Recent research from Harvard Business Review shows that one bad employee can corrupt a whole team. The study looked at how employees act when they are around someone who misbehaves. It found that 37 percent of those studied were more likely to do something dishonest if they worked with someone with a history of bad behavior.
If this happens, we have a transparent but kind conversation with the sour-attitude employee. We may tell them, "When you say this, your attitude impacts the organization this way." Or we may ask, "How can we teach you to start a phrase differently so that it's better received?"
2. Consider all the alternatives and CYA
Before we let someone go, we make sure they wouldn't be happier elsewhere in the company. Sometimes, an employee doesn't realize they're headed toward burnout until you have an honest conversation about their output. I often suggest moving someone laterally or to another department when they show signs of dissatisfaction. Maybe they've got a great skillset, but they've been in sales for many years, and an opportunity in marketing would be a breath of fresh air. Or perhaps they're in logistics and would enjoy a career pivot.
No matter the course of action, it's essential for managers to document everything to stay compliant with termination laws and to show the employee why things aren't working out. Empower your managers to take detailed notes on a problem employee's performance or attitude so that everything is in writing. Saying someone's "not a good fit" can open you up to legal risk, so focus on issues with performance or behavior.
3. Work with HR to ensure that termination is handled correctly
My company has recently doubled in size. That means I don't personally fire anyone anymore; that's in the jurisdiction of our Director of People. I work closely with her so that I'm involved in the process, and I suggest you do the same at your startup. Whether it's an entry-level hire or someone more senior, a leader needs to be aware of anyone who isn't pulling their weight on the team and understand why.
If you decide to fire the employee, develop a termination plan with HR to ensure you're following the law and your company's procedures. You might have an HR rep present at any meeting where you discuss an employee's future at the company. Or you might hire an outside party for an independent review or show your best practices.
4. Be as transparent as possible with the employee
When you've exhausted your options and it's time to let an employee go, do it swiftly. Be as clear and detailed as possible. Explain logistics like how the final paycheck will be handled, any severance pay and how company property should be returned. Make sure you're not waffling or giving them the impression that you might change your mind. Transparency is critical. Employee distrust is pervasive in the U.S. workforce, according to the American Psychological Association's 2014 Work and Well-Being Survey. Its research found that nearly one in four workers don't trust their employer, and only about half believe their employer is open and upfront with them.
Be prepared to answer any questions during the termination meeting, and remember to show empathy. Consider scheduling a termination at the end of the workday, where you may even walk the person out when it's closing time. At Hint, we help bridge the gap between an employee's last day and their next career move. We discuss what a transition will look like and help as much as possible. The support may include introductions to different firms, providing a reference and keeping the lines of communication open after their last day. Not all firings will be amicable, but they needn't entail bridges burned.