How To Fire Someone, The Right Way
Regardless of the economic times, as an entrepreneur, you will be required to fire someone at some point. Perhaps it is based upon the employees poor performance, or deviant activity, or maybe it is due to the current crap economy. Regardless of the circumstances, you better know how to fire someone before you just blindly do it. Here are the 11 components you need to know to properly fire someone:
1. Do It Quickly
Too often business owners wait for an ideal time to fire someone. But, rarely ever is there a perfect time. When you know it is the right decision don’t hesitate, take action quickly.
Chances are the employee has a suspicion it is coming. While they are physically still at the office waiting for the hammer to fall, their heart is elsewhere. Quick action will reduce gossip and prevent spreading concerns over “who’s next.”
2. It’s The Best Thing For Them, Too
Stretching out the employment time for a “dead-man-walking” only further hurts your business. But there’s more, it is unfair to the employee too. As they stay stuck in a job where they aren’t working out, you are delaying them from working a job where they can truly excel. Or even worse, you are holding them back from starting their own company.
3. Do It Privately, Kinda
When it comes to the termination, have the meeting in a conference room or office, where you, the employee and an HR person are in attendance. Going the meeting alone could result in he said, she said.
Don’t have an HR department? Bring in a senior employee or manager who can act as a witness. If that isn’t even possible, then do it yourself – but document everything.
4. Show Emotion
It sucks to be fired and it sucks to do the firing. It is OK to show some emotions when you are sad or disappointed. A stone cold face just makes the situation even more uncomfortable for the employee. The golden rule is professional sympathy. What ever you do, don’t fake it.
5. Paperwork
Have a written notice prepared for the employee, explaining they are being terminated, the date the termination is effective and what the company is offering if anything in severance. Make sure all the other HR related papers are ready too – the COBRA documents, the final paycheck, et.
6. Cushion It With Cash
If you can and if they deserve it, give the person a little money to cushion the departure. Two weeks of pay is relatively typical, one month is generous. Don’t pay severance if you are terminating them for intentionally hindering the company.
7. Collections
If you don’t have a procedure in place for terminating employees, make sure you develop one. In addition to the steps listed above, your procedure should include the items you need to get back from a terminated employee. This includes things such as keys, security codes, badges, passwords, and customer contact information.
8. Hit The Road
Once the termination meeting is done, you should have the employee leave ASAP. I am not suggesting you kick them out the door, but you don’t want them lagging around. Allow them to say their good-byes and clear out their desk. But don’t allow them to clear out their computer, if you get my drift.
9. Tell The Team
Once the termination has been completed, notify other employees as soon as possible. You don’t want word to spread through the grapevine about the recent firing, it could spread fear and the message inevitably will get mixed up. Call the remaining team together, tell them about the termination (but not the reason for it – that’s confidential) and tell them the direction forward.
10. Hit The Phones
Now that the employee is gone and the internal team knows what is going on, it is time to tell affected clients. If the terminated employee was a key contact from you company to your clients, you need to tell them about the change and exactly how your company is managing the account going forward. This is a time to over-communicate, so stay in regular contact with the client to assure them the service will be just as good or even better now that there has been a change.
11. Mail Them
If you didn’t have the final check ready when you terminated your employee, mail it out the moment it is ready. You don’t want the perception (right or wrong) that you are taking advantage of the situation.
Any other suggestions, tips or tricks? Write your comments below.
By Mike Michalowicz, Author of The Toilet Paper Entrepreneur
February 5th, 2009
we have easy access to video these days. Make a recording of the firing in case you need proof that you did things right.
February 5th, 2009
I agree with Richard — film it if you can, though that could be awkward. If you film it in secret, I believe that would be tacky though.
Hopefully, when companies are considering layoffs, employees have some idea that they are coming. I would definitely grease their way out the door with a generous exit package which would include medical benefits for a certain amount of time.
February 5th, 2009
This is a great article! I can’t tell you how often I’ve seen it done badly, especially during the tech bomb after Y2K. As entrepreneurs, we need to develop a wide array of skill sets, but what is showcased here is the one trait we sometimes forget… how to be human. Awesome Mike, as usual!
February 5th, 2009
This was a very, very, well thought-out post.
If I could only add two quick notes:
1- Is there a precedence to warrant said firing?
In other words, were they previously P.I.P.’d?
2- An alternative, depending on how small the business actually is, is to have the “employees” actually be contractors where they are issued 1099’s at the end of the year. Again, this alternative is (only) for very small companies.
-K
February 5th, 2009
@Everyone – Kevin Puls is spot on. Precedence is key, and needs to be documented. Firing willy-nilly is dangerous.
February 5th, 2009
As someone who has had to fire a couple people, and is still bad at it, this is very good advice. Especially #1. There will never be a right time.
One correction/addition though – check state law RE: last paycheck. In California, if you terminate an employee, you are required to give them their last check upon termination. If you don’t, they are entitled to pay through the time you do pay them. Other states may have similar laws.
-Alex
February 5th, 2009
You miss a key point – there’s a BIG difference between *firing* someone and letting someone go. Two completely opposite views.
February 5th, 2009
@Danny – Good point. I agree there is a big difference, but don’t see how the process is much different. How do you feel the process would change?
@Alex – I did not know about that California Law. That is VERY interesting. Thanks for stating that.
- Mike
February 7th, 2009
A dangerous post – and some really irresponsible advice. Here in the UK for example, not following correct redundancy procedures can result in an unlimited fine that will finish your business.
As much as I dislike lawyers, employees have some powerful legal rights and in the litigious times we live in you better get legal advice.
Finally “cushion it with cash” is a ludicrous idea. A disgruntled employee can easily turn that against you. “Mr Smith, if you were unhappy with your employee’s performance, why did you give him cash? It looks like a bribe etc…”
February 8th, 2009
@Jake – THANK YOU for the input. In regards to “cushion it with cash,” I have had the unfortunate experience of firing many individuals and have discovered that disgruntled employees are disgruntled nonetheless. The court system (in Morris County, NJ) was indifferent to severance and that it has no relevance.
There is one KEY LESSON here though – that you are setting a PRECEDENT on how you treat employees. Every time someone is fired you need to treat them the same when the circumstances are the same.
- Mike
February 9th, 2009
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March 5th, 2009
We can dramatically improve our organization’s chance for long-lasting success by powerfully thinking through and planning the process.
For example, plan to let the employee go on a Monday at 10am before lunch. This gives them several hours to be by themselves before they have to go home and face their families. The Monday gives them a full week to grieve, plan, and be proactive before a weekend occurs. Monday at 10am gives you the opportunity to have a lunch meeting with remaining employees to discuss the strategy and mission and how the termination is to be communicated to customers and suppliers.
It allows for team meetings in the afternoon to discuss specific roles and action plans, fine tune communications with customers and suppliers, and discover any potential problems to be addressed.
It gives you the remaining days of the week to gauge the morale and act accordingly, and gives you the repeated opportunity to empower your team. (You don’t want to let people go on a Friday leaving your remaining people stewing at home over a weekend with no opportunity to communicate with them.)
March 5th, 2009
@Mary – That is a FANTASTIC tip. The Monday 10am Rule! Thanks so much for sharing this.
March 6th, 2009
Well, now that I was just laid of this week (Tuesday, effective immediately), I guess I need to post a follow up comment.
I was not giving my last check. Not even sure if I was paid up though today, even.
All I know is that I will receive my vacation time owed to me and thirty (30) days health insurance coverage.
So, according to your checklist, my boss handled it (the letting go) well, and not so well.
Best,
-K
http://www.for-the-troops.com/shop/
Now that I am without a job, I can now focus my energies on our site- dedicated to the men & women of our Armed Forces. And when you shop at our site, we donate 10% of after-tax proceeds to military charities.
March 16th, 2009
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August 6th, 2009
I wanted to express my gratitude for the information from the post and all the comments thereafter. I have an employee that I need to fire and it will be my first. It is incredible how true the “no right time” issue is. Despite several meetings and courses on customer service, this employee absolutely will not change his poor customer service and rude attitude. I know him and I get him, but customers don’t (obviously). It’s tough because I know his wife just lost her job due to an injury and he did not plan sufficiently for retirement, but he’s been with the company for over 20 years. We took over the business a year ago and he won’t let go of the “old” ways. I have mouths to feed and 2 partners to consider so it has to be done.
Question: This employee has a credential that is required for our facility to maintain our relationship with a national company. Finding good employees with this credential isn’t easy, and we will lose our designation if he goes. We can continue to do business as usual, but I’m asking if we should just take this chance while I continue the search for his replacement, or keep him on until I can find someone.
His absence will cause some changes but will not hurt us in any way. In fact, it should help us gleen new customers that won’t come to us because of him.
I apologize if this isn’t quite what this post is for, but I respect everyone’s opinions and experiences, so I hope to draw from that. Thank you for your time, and advice would greatly be appreciated.
August 6th, 2009
Luis – Great question. And as you know, no one can predict the future so the move may hurt you (in regards to the credentials)… but I will tell you this:
1. If the employee is a problem now and you could not fix it, then the employee will always be a problem.
2. When you fire the employee, the other people at your company are going to say “what took you so long” – mark my words.
3. Overall performance will increase from the remaining employees, because the distraction is gone and they don’t have to fix problems that employee caused.
4. Your clients will be grateful and respect you more as a leader of your company.
5. Credentials and certificates can be acquired many ways… but innate talent (attitude being a big one) cannot. Hire the next person on attitude, energy and intelligence and assign them the job of getting the credential.
Wishing you the best of luck. Firing someone is always hard, and it should be – after all that means you have care for your people and that is noble. Now you need to show care for the business (which means caring for the majority of people) and let the one bad one go.
- Mike
August 7th, 2009
Thanks for the advice Mike, it is greatly appreciated. You’re right, it isn’t easy but this post has cleared up many things. Once again, thanks!
Luis