Get All Access for $5/mo

How to Fire Employees With Compassion Firing is never easy for anyone, but it can be less painful if you follow these tips.

By Dan Yoo Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

As a young manager working for an investment bank that was snapped up by Goldman Sachs in the wake of the dotcom implosion, I was dealt a double whammy. I was told I no longer had a job, and I had to tell the hotshot college recruits I just wooed from other prestigious job offers that they were gone too.

I was worried about my future and felt horribly guilty for having recruited folks who trusted in the company -- and me.

Losing a job is the toughest thing that can happen in one's career. In the moment, it feels like a vicious blow to the psyche that will leave an indelible mark on your job prospects and self-confidence. It's not. In time, most fired employees will view it as a pivotal moment that righted a perhaps listing career. But that revelation occurs quite some time down the road -- not on the day the weeks to follow the firing. When you're the one wielding the hammer, that's crucial to remember, because your goal should be to fire with compassion.

Jeff Weiner, my former CEO at LinkedIn, always challenged us to manage with compassion. As he writes, "compassion is a more objective form of empathy. This idea of seeing things clearly through another person's perspective can be invaluable when it comes to relating with others, particularly in tense work situations."

Related: What to Do When You Hire the Right Person for the Wrong Position

There's nothing more tense than letting someone go -- whether it's for performance reasons, financial cost-cutting or for just plain bad behavior. I've fired more than a dozen people in my career for all these reasons.

As a manager, it doesn't exactly get easier but there's a maturity earned in the knowledge that it's the right move -- both for the future of the company and the employee.

Here's how to fire with compassion:

Document and communicate poor performance. Firing for performance reasons should never come out of left field, but it often feels that way to the employee. This is why it important to provide employees feedback and document any incidents. If there is none, there is a problem with the company's employee practices. In the fast and hungry world of startups, this is all too often the case.

A poor performer is death to a small team. Just as there's a need for decisive action if it's not working out, there needs to be an aggressive onboarding and feedback loop to communicate problems quickly and give an opportunity for corrective action before swinging the axe.

Practice the conversation before you walk in the room. You have to role play what you're going to say. At many companies, you will rehearse with someone in HR -- but that's often a luxury for smaller firms. If one of my newer managers has to fire someone, I like to do it with them, so they can benefit from my experience.

Related: How to Fire Someone Without Getting Sued (Infographic)

Your ultimate goal is to leave the termination meeting on the best terms possible and for you to keep calm during the meeting. That makes practice essential, but there is no way to predict how the person you're firing will react. Role playing is an active exercise in empathy. It makes sure those skills are limbered up, come what may.

Be direct and firm – but let them speak. Conventional wisdom says to be brief, firm and definitive when firing an employee – which you should be. Experts will tell you not to be drawn into an argument or allow the employee to vent. I disagree. I think the right action is more nuanced than "be brief and be gone."

Maybe because I've been on the other side of the table, but I think the standard, "I am sorry you feel this way but the decision is final," is not honoring another person's perspective and preserving their dignity. There are many times when there are legitimate gripes or mitigating circumstances surrounding a firing. It is OK to recognize that but note there are other considerations that trump that and have led to the final decision. The decision may be final, but I am open to discussion about where things went wrong -- in a limited and controlled way.

This is good not only for the employee but also the managers.

If you can, be generous. If the business can afford it, I always want to error on the side of generosity when terminating an employee. When my colleagues and I were let go, the bank gave us our bonus and allowed us to vest some of our unvested shares. It was a classy move that took some of the financial sting away and helped us part on good terms.

There is a high level of responsibility that a company takes when bringing an employee on board. If things didn't work out for whatever reason, the business should be open to doing what it can to help ease this burden. Aside from salaried severance, it could be that you offer COBRA coverage for some period of time or outplacement services.

Firing an employee is the worst. As difficult as it is for you, it's an order of magnitude worse for the employee. Keep that high in your mind, and you'll be able to both fire with compassion and do what's best for your company.

Related: 4 Secrets to Firing Your First Employee

Dan Yoo

COO of NerdWallet

Dan Yoo is the COO for NerdWallet, a startup focused on offering price-comparison tools for financial products. Prior to joining the company, he was vice president of business operations and business analytics at LinkedIn, where he helped grow membership from 50 million to more than 275 million. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Side Hustle He Started in His College Apartment Turned Into a $70,000-a-Month Income Stream — Then Earned Nearly $2 Million Last Year

Kyle Morrand and his college roommates loved playing retro video games — and the pastime would help launch his career.


5 SEO Hacks to Help You Rank Fast

Discover the best SEO hacks you can use to rank fast and avoid waiting for months to see results.

Starting a Business

Inside the Exclusive Private Club Devoted to Food, Wine and the Arts

Barrett Wissman breaks down the passions and partnerships behind his latest venture Domus Artium Reserve.

Business News

Elon Musk Threatens to Ban Employees from Using Apple Products, Says Will Lock Devices in 'Cages'

The Tesla founder sounded off on X following Apple's 2024 Worldwide Developer Conference on Monday.


Watch Out for These 5 Consequences of Too Much Collaboration

Beware of the collaboration trap! Too much collaboration causes overload, and well-intentioned efforts to have broad collaboration can backfire.

Science & Technology

Why We Shouldn't Fear AI in Education (and How to Use It Effectively)

Facing resistance to new technologies in the educational process is nothing new, and AI is no exception. Yet, this powerful tool is set to overcome these challenges and revolutionize education, preparing students and professionals for a future of unparalleled efficiency and personalized learning.