The Complete Guide to Firing Employees

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Claiming employees to be a company‘s greatest asset is misleading. There, we said it.

The true asset here is a staff of professional and dedicated employees with the hunger to perform well. Having too many mediocre-to-poor employees only undermines an organization’s overall performance, making those employees a liability, not an asset.

This is why firing the wrong employees is as important as hiring the right ones.

However, firing employees isn’t as easy as yelling, “You’re fired!“ like on The Apprentice. The situation can get very delicate due to its controversial nature and potential legal issues.

To do it right, you need tact and strategy.

Why Firing Employees Is So Important

Ever heard of the phrase “a necessary evil?” Firing underperforming employees is just that.

Sloppy, incompetent, and/or insubordinate employees are your organization’s weakest link that causes missed deadlines and lower productivity levels. You’ll also find yourself on the receiving end of negative client feedback, sometimes to the point where the customer may sever all professional relationships with your company.

But if there’s anything worse than underperformers, it’s bad hires.

According to statistics, 50% of new hires fail. These employees are either incompatible with your company’s work culture, find it difficult to use the systems you use, or are simply unhappy or apathetic and just want to do the bare minimum to keep collecting their paychecks.

As a business owner, you can’t afford to look the other way when you have bad hires or underperforming workers in your team. 

You can warn them. Help them improve. Encourage them to be better.

But what do you do when nothing seems to work?

You take action.

Situations like these demand firing employees—to let go of people who aren’t the right fit for your company. 

Getting the wrong people out of the door quickly makes space for better, more suitable employees to improve your bottom line. It also helps boost team engagement and productivity.

What’s more, firing—when done right—is mutually beneficial.

Nobody likes being fired. It’s painful and scary. And most managers don’t like firing people either–it can make them feel heartless, especially if they’ve already put a lot of time, money, and/or mentorship into helping the employee succeed. 

But if you see things from a positive perspective, you’ll find firing has a bright side–the employee gets a chance to find a better fit somewhere else. Plus, getting fired can be a wake-up call, forcing them to right their wrongs and do better.

The end result? Your company and your former employee both thrive in the long run.

Quick Tips to Firing Employees The Right Way

Firing employees certainly isn’t fun. It’s not fun for the person giving the news, and it’s not fun for the person getting it. This is why you need to master the balance of being firm yet compassionate when it comes to it.

Here are a few handy tips on firing an employee gracefully:

Make Sure It Isn’t a Surprise

Firing employees is a severe punishment. You should issue repeated warnings and take active measures to help employees improve before taking the plunge.

What employees do wrong shouldn’t be a surprise to them. This is especially applicable if you want to fire an employee on grounds of poor performance.

Legally, you can fire employees at will, but it doesn’t make it a good business practice. Letting employees go without feedback or indicating what they did wrong isn’t good for your business or your staff in the long run.

Keeping this in mind, you should try to give affected employees as much notice as possible–and if you can, help them to save their own jobs by turning their performance around.

Don’t Beat Around the Bush

Short, clear, and to-the-point—this is what your firing speech should be like. 

Start by saying something around the lines of “I have some bad news for you. Today is your last day here.“ This will set the pace. 

Follow this up with a one-sentence long reason for termination. Be transparent while keeping it short. Reasons can include not meeting sales targets, not being a good cultural fit, and so on.

Equally important here is to use the past tense. This will help the employee understand there isn’t room for second chances, and you’ve made a final decision.

It’s natural for the employee to argue or lash out at you. If you find yourself stuck in this situation, don’t get caught up in responding. Stay polite and express regret by saying something like, “I’m sorry things have come to this point, but this is the final decision.“

Swap Humiliation for Compassion 

Your employees shouldn’t feel humiliated after getting fired. When you approach them, treat them with dignity and always do it privately behind closed doors.

Showing compassion is incredibly important here. You can offer to be helpful as a means to empathize with them. For instance, if you genuinely think someone has talents and abilities that could be useful elsewhere, tell them you’re happy to provide them a good reference or make introductions.

Employee termination also puts your other employees on edge. You risk draining out the morale of your employees when terminating someone publicly, especially if they were friendly with the affected employee.

It’s safer to schedule a termination at the end of the day after other employees leave. This way, the terminated employee won’t have to do the “walk of shame“ and leave your office—or wherever you fire them—in front of their co-workers.

Expect Emotion, But Keep Yours in Check

Some employees will take the news in stride. Others not so much.

Employees may go through a range of emotions, starting from shock to grief to anger—sometimes, even relief. You have to be prepared to handle these emotions and without losing control over yourself.

A great tactic here is to show empathy. Generally, physical contact is an excellent way to show support, but it’s best to avoid it when firing employees. 

Also, don’t use any harsh words or show mean emotion. An upset employee will become more aggravated to the point where they might even start creating a scene if you do.

We also recommend firing someone face-to-face instead of over the phone, via email, or sending a message on Slack/Skype. Not only is letting go face-to-face a sign of courtesy, but it also helps the other person react better when they can see your body language and feel the energy in the room.

Even better if you can have another (familiar) person in the room. They can serve as a witness as well as help with any unusual questions or reactions.

Stay Within the Law

Figuring out any legal repercussions is crucial before doing the actual deed.

Did your employees sign a contract when you hired them? If they did, they cannot be fired for reasons not listed in the contract (though the contract may specify they can be fired for no specific reason). If they did not, they are employed at will, giving you the right to terminate them whenever you want. 

Don’t fire employees as an act of discrimination or for taking medical leave—basically, without any solid cause.

Consider consulting a lawyer before firing anyone. This will help ensure all your actions are legal and save you from breaking any contract.

Long-Term Strategies When Firing Employees

We’ve already detailed the importance of having a tactful and compassionate approach when firing employees. In this section, we’ll discuss a few more strategies to help you determine whether an employee should be shown the door.

Set Performance Standards to Identify Weak Performers

You should have a system of regular employee reviews, where every team member receives frequent and honest feedback. Your managers should always know who’s overperforming and who’s underperforming—and with them all other employees.

Establish clear-cut rules to create awareness among your employees about what can get them into trouble, such as:

  • Substandard work quality
  • Not meeting company deadlines and business objectives and goals
  • Disengagement, where an employee simply does the bare minimum and doesn’t engage with the company or their coworkers
  • Social issues, where employees don’t work well with other people within the organization
  • Insubordination, where an employee refuses to follow directions or is argumentative or disrespectful with their supervisor(s)
  • Bad fit, where an employee’s working style and behavior are at odds with the company culture

Consider investing in performance management software like Namely or Workday to establish realistic performance standards for employees to make better evaluations. 

This single tool will transform your workforce and accelerate productivity levels—all by simply identifying underperformers and creating employee development opportunities.

Reflect Over All Factors and Reasons

Thinking about firing an employee and deciding to fire them are two extreme sides of the line. But the question remains, how do you know for certain?

Are you already thinking about terminating one of your employees? If yes, you’re already standing at the edge. You already have an intuition, which will ultimately translate into your thoughts.

Luckily, there’s an exercise to help you sync your brain and intuition, with regards to the firing process.

Think about your perfect team. Do you see the employee being a part of it? Do they have any skills or expertise that can prove to be an asset?

Next, consider the situation when you are hiring employees. Would you rehire this person again? Do they have the skills to level up and grow with your business?

Lastly, imagine a hypothetical situation where the employee comes up to you announcing their departure. What would you do to keep them—how hard would you fight?

Thinking hard about all these questions will give you a better idea of workplace decisions.

Be Open for Input

It’s common for solo introspection to lead to confirmation bias, where you view everything done or spoken by a person in a specific light. To avoid this, you should get secondary input from trusted colleagues.

While you do that, be careful with your wording. You don’t want to set off red flags in their minds.

Ask in speakers yet relevant questions that will get them answering honestly. Something like, “I noticed our team has been slacking for the past few months. Do you see a reason for this?” Or “how do you think the team is performing as a whole? Do you see any room for improvement?“

In case your colleague brings up an individual, ask them to elaborate and mention specific and concrete examples for them to support their claims. 

If the colleague doesn’t bring up the individual you have in mind, you may want to ask a more targeted–but still careful–question, such as “Employee X has been here for a few months now, how do you see them settling in so far?” or “You got to work with Employee Y on a project last month, what was your experience working with them like?”

The main idea here is to get a better handle on the situation—get more perspective. 

Create a Development Plan

You, along with your managers, should do everything they can before letting an employee go. Not only is this helpful to both the employee and your company culture, it will hopefully save you the time and money of replacing that employee. 

If you find your employee is willing to improve and motivated, help them understand where they’re going wrong and then improve their skill sets. You can create a development plan, which focuses on 3-4 areas the person needs to work on, along with the metrics to measure progress.

Let us explain this with an example.

Suppose you’re thinking about firing an individual—someone who is finding it hard to work with other individuals in the company. 

You’ll work with this person to identify activities that can help them build and nurture relationships. Tasks can be anything, ranging from joining a committee to grabbing a cup of coffee with colleagues.

Once you figure this out, start developing parameters for your expectations. Chalk up a reasonable time frame within which the person could likely improve and inform them about it. Check in with them repeatedly during the time frame to keep track of how things are going.

Adopt a friendly approach when you talk to the employee. Try to help them as much as possible. Be tough yet encouraging, and of course, always acknowledge improvement.

Involve the HR Department Early

Your human resource department is the backbone of your organization. It’s why it’s smart to get HR involved early in the process for their input on firing and individual and advice on the documentation you’ll need if you decide to go ahead.

Set the pace by having an informal conversation with HR. Take the opportunity to discuss the employee’s overall development and performance. It’s possible the HR manager may ask you to create a performance improvement plan (PIP).

A PIP serves as evidence of an individual‘s inability to improve in case they sue. It’s like your security net. 

Having said that, many HR experts view a PIP to be demotivating. It already gives the employees the impression their future with the organization is over.

Avoid Procrastination After Making a Decision

If you decide to terminate an employee, don’t sit on it and do it quickly.

You see, there’s a cost of procrastinating. Not only does it put your credibility in question, but it also doesn’t make you seem like a good leader. Meanwhile, team performance suffers, and employee morale dampens.

You may have to take the case up to HR for swift action, where you explain the employee’s detrimental behavior, as well as the challenges faced by the team because of it.

You must remember that firing someone has serious consequences for your livelihood and career. When firing employees, do it as humanly as possible and without any stalling.

Next Steps

After firing underperforming employees, sit down with your team to communicate why you did what you did. This will help to take away the edge, as well as restore morale.

Let’s not forget seeing an employee being let go due to unsatisfactory work can also be an excellent productivity booster.

Also, now that you have a vacant position in your organization, start looking for suitable prospects to fill in the job and hopefully avoid making the same mistakes as the previous employee.

Check out more Crazy Egg guides to streamline your employee-related processes:

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