Parting ways with employees can be one of the worst parts of being the boss, but it usually cannot be avoided. The key is to do it with clarity, sympathy and documentation.
“Communication should be very civil no matter the circumstances—even if you’re [furious] with the employee,” says Kathleen Brush, author of The Power of One: You're the boss. “If you’re very brusque and tell the employee, ‘You’re outta here!’ you run a much higher risk of lawsuit.” Indeed, one study by Duke and Ohio State University professors found that when employees were fired but felt they were treated fairly, just 1 percent filed a wrongful termination lawsuit, compared with 17 percent of those who felt they were treated poorly.
Other reasons to attempt an amicable termination include your reputation both inside and outside the company, says David Lewis, CEO of OperationsInc, a human resources consulting firm. “If you have a blowup when you fire someone, thanks to email and social media you’re going to get a reputation very quickly,” Lewis says. “Operate as if you expect the scene to be posted on YouTube five seconds later.”
Here’s how to fire an employee like a professional.
• Document all performance problems as they happen.
• Communicate your displeasure with the employee as you document it.
• Give him or her a “cure period” of a few weeks, allowing for a chance to turn around the behavior.
• When firing for incompetence, explain clearly why the person is being dismissed and stick to reasons for which you have documentation. “State clearly: ‘Your performance is unsatisfactory,’ ” Brush says.
• Never make it personal. “If you tell someone they’re fired because they have poor character or a bad work ethic, the tone of the meeting becomes completely different,” Lewis says. “And what’s the point of that?”
• Do not negotiate. “This should be a one-way communication,” Lewis says. “Do not allow it to become a dialogue.”
• In the event of layoffs, do not hint of impending terminations ahead of time. “The Band-Aid approach is best,” Lewis says. “Tell them at the moment you make the decision.” Giving workers a heads-up makes you vulnerable to security breaches and sabotage.
• Plan a script explaining that the company has fallen on difficult times.
• Express your sympathy. “I don’t suggest fake sympathy—you should feel badly when you’re laying off employees,” Brush says. “You have some responsibility to them.”
• Express convincingly what is being done to turn the company around. Otherwise you’ll have severe morale problems, and the remaining employees will just be biding their time.
• Don’t make lofty promises. “Never make the mistake of telling those who are left, ‘This is the last time we will have layoffs,’ even if you believe it is true,” Lewis says. “Countless business owners have made irreparable damage to their businesses by making this promise. Letting people go is just a part of doing business, and making that promise will come back to haunt you.”
Business: Infomous, a digital information aggregator in New England
Tactic: Explain the company’s financial situation and offer extended part-time severance.
Takeaway: Be open and honest. Find a solution that works for the company and employees. Aim to build long-lasting bridges, not burn them.
Several months ago the company was in bad shape. The only way to save it was to downsize dramatically—especially in our technology department. This included my co-founder and chief financial officer, whom I had worked with for 12 years.
I knew going into that conversation it would be incredibly tough. He has young children, and I worried I was leaving him exposed. Also, I needed his expertise after he left. Plus, we were close. It was a double-whammy—there was the difficult emotional side, plus the risky business side if I lost his knowledge base.
I set up a dinner to tell him and explained that this was a last-ditch effort to save the company. I emphasized that instead of a two-month severance, I hoped he would accept a four-month, part-time arrangement. That would give him the flexibility to look for a new position and also help us while we transitioned into focusing more on sales.
His response was far better than I expected. He said he knew things were not rosy and was worried something drastic would happen. He was relieved and appreciated that he was now free to pursue other opportunities while still having a hand in the company to help see it succeed.
I got similar responses from the three others on the tech team whom I let go, and whom I also offered extended part-time severances. They were all very understanding and have gone far beyond what I asked, working without pay for two weeks past their severance period. All of them have moved on to other positions. I was completely open about the situation with the remaining employees, and everyone has rolled up their sleeves and dug in to help the company to succeed. I also heard the same message from every one I let go: They all said they really felt bad for me.
The chief technical officer is still on in an advisory role—he is the kind of person who will respond to an email at 1 a.m. The business is now experiencing an amazing turnaround. We had been at the end of our rope, and most experts I consulted with at the time told me to shut down. But we found a really elegant way to avoid that.
Barbara Bergin, M.D.
Orthopedic surgeon, founding physician, group member and former board member
Business: Texas Orthopedics, an Austin-area practice of 27 doctors and about 200 employees
Mistake: A termination was made in anger.
Takeaway: Document, document, document and keep a cool head.
Several years ago we had an employee who had non-serious health problems. He was well-liked but over time started to work from home unannounced, didn’t show up for work, and called in sick more than was acceptable. He had a lot of flexibility and worked between two offices, so it was hard to know what he was doing.
Everyone knew what was going on, but there was no disciplinary action and no documentation. Eventually there was a major incident of insubordination, and the next day he was fired. An administrator handled the firing—the doctors try not to be involved with that since we have to work with the employees every day. We each want to be the person no one fears.
He was given a severance package of pay through the end of the week, and some benefits beyond that. The employee was very upset that he was fired. He denied the allegations, even though we try not to give too much information. Once you give them too much reason, they have ammunition to use in a courtroom.
He threatened to sue us for unemployment. We were angry—the doctors had liked and trusted this guy, and when he didn’t do his job, we felt cheated. Eventually we offered him a greater severance package, and he agreed to sign a release, agreeing not to sue. That made us even angrier, but it saved us a lot in legal fees.
The experience completely changed our employment policies. Now we document everything and have disciplinary counseling, which goes on the employee’s record. Three counseling sessions and they are let go. You have a big problem when firings come as a surprise. The employer might see it as an issue coming to a head, but employees never see it coming unless they are told.
Business: McLaughlin Sales Group, a band of service businesses based in the Dallas area
Tactic: Be straightforward and sympathetic.
Takeaway: Stick to the rules, but let a rotten apple go sooner rather than later.
For three years I had an assistant with whom I’d developed a close relationship. I knew her family well, and we felt we were friends in addition to employer-employee. After a couple of years she simply wasn’t doing a good job anymore—not fulfilling her responsibilities and using excuses that didn’t add up.
After dragging out the inevitable for several painful months, I called her into a meeting, which included her immediate supervisor. I was straightforward and professional, but I was also compassionate. I told her I thought she was a great person but it was clear that she was not happy doing the work anymore. I explained it wasn’t working out and referred to my notes from our counseling sessions where she had been spoken to about her behavior. I paid her through the end of the pay period, which I felt was the right thing to do.
She cleared off her desk that same morning, and it turned out to be a big relief for both of us. She said she understood and has since followed up to ask about business. We remain friendly.
After she left the office I held a brief meeting with the rest of our small staff to explain the change. It was blatantly obvious to the entire office it was time for her to go.
I regret not firing her months earlier. It would have saved months of irritation for both of us. I kept her on because I didn’t want to put her and her sweet family in a financial bind, but it would eat away at me every time I signed her check.
When there is tension between employees, it bleeds into the whole business—you can feel it when you walk in the door. I learned to go with your gut feeling when you know an employee isn’t working out. You, the employee and the business are better off.