Inside Small Business | Small Business & Home Business Marketing

Fire with Finesse

Matt Alderton

When an employee just isn’t working out, it’s time to cut your losses and part ways. Before you sign your next pink slip, however, consider these tips for saying goodbye in a way that’s more helpful than hurtful.

Twenty years ago, Joe Healey fired an employee. Her name was Trish, and she was a good employee turned bad. Once a high performer, she was overconfident and disruptive in her final days. When Healey finally let her go, she was shocked.

Six months later, when he ran into Trish unexpectedly, Healey was frightened. More than 6 feet tall, she was a big woman and with a flick of her wrist could easily have made Healey sorry that he ever let her go. But when she approached her former boss, Trish wasn’t angry. She was appreciative.

“She said, ‘Joe, I didn’t think you’d fire me,’” Healy recalls. “‘I never took your warnings seriously. For six months I blamed you and the company, and then I finally realized it was me and my attitude. You gave me the kick in the behind that I needed, and I’m sorry that things ended the way they did.”

Small business owners are far too often terrified to fire problem employees. Their team is their family, after all, and a wound to their family tree is a wound to their pride. What they fail to realize, however, is that a rotten branch is a bruise on their bottom line; if it’s cut with care, there’s no reason to fear the pruning.

“As a small business, you just don’t have the volume or the margins to keep on dead wood,” says Healy, a small business consultant and speaker, and author of Radical Trust: How Today’s Great Leaders Convert People to Partners. “You don’t have time in small business to be warm and fuzzy.”

A Necessary Evil

It’s never easy to fire an employee. It’s called firing, after all, because it burns. And yet for every manager, dismissing employees is a requisite reality; it’s part of the job description. Like it or not, when you own your own business, pink slips come with the territory.

“A lot of small businesses get in trouble and they lose money because they won’t suck it up and say, ‘I’m sorry, you’re just not fitting in here,’” says management consultant Richard S. Deems, author of How to Fire Your Friends: A Win-Win Approach to Effective Termination.

Business owners rely on their employees to produce, as well as to contribute to their company’s growth, culture and wellbeing. To that end, employment is a contractual relationship, and when it’s broken, that working relationship must be laid to rest. The trick, experts insist, is recognizing the difference between a break and a fracture.

There are two things that warrant termination, according to Healey, and simple mistakes aren’t one of them. Ongoing performance issues, however, are. “You’ve got to make clear to employees what performance you expect,” he says. “And if performance falls below a certain level, employees should know that you can’t keep employing them.”

Next to performance, perhaps the most fundamental justification for termination is what Healey calls trust issues; if you lie, cheat, steal, bully or disrespect—your customers, your associates or your manager—that constitutes broken trust. “A person operating without trust can disrupt the organization, can create negative conflict, and can stifle and slow the business down,” he says.

If your employees lack either performance or trust, it’s time to have a chat.

Softening the Blow

Firing someone isn’t easy, but it doesn’t have to be hard. Experts insist that communication can make termination more palatable for both employer and employee alike.

“What I have found is that high-performing leaders are much better than most people in candor,” Healey says. “That’s candor on both sides of the equation; it’s easy to be candid about great performance, but it’s hard to be candid about poor performance. What I find, though, is that great managers are loyal enough to their people that as soon as possible, they convey to them performance problems. And because of that, they end up having to fire fewer people because problem employees are more likely to turn around.”

In other words, if you address performance problems before they become irreparable, you may be lucky enough to avoid saying, “You’re fired,” altogether. “You know what the biggest problem in firing is?” Healey asks. “It’s one word: surprise. If you remove surprise, then you remove emotion, anger and bitterness.”

Ruth King, author of The Ugly Truth About Managing People, echoes the power of communication. At her company, Ribbon, an Atlanta-based Internet broadcasting company, new employees are put on a 90-day plan. They sit down with their managers and set 30-, 60- and 90-day goals and meet periodically in order to assess their progress toward meeting them. Within those 90 days, it’s clear to both employer and employee whether things are working out.

“Having clear expectations, and putting them in writing, is absolutely critical,” King says. “Most small business owners don’t take the time to do that. We’re running around like chickens with our heads cut off, saying, ‘Go do this,’ and we expect our employees to read our minds and to do exactly what we would do without giving them a clear understanding of what exactly we want.”

Doing the Deed

If you don’t set expectations for your employees, it’s hard to justify terminating them when they fail to meet them. On the other hand, if you’re clear about your standards, and about the consequences for skirting them, then firing an underperformer is both reasonable and expected.

When the time comes, however, it must be handled with great care in order to protect your reputation and prevent litigation. To help things go as smoothly as possible, consider these expert tips for saying farewell:

• Start with warnings. At Ribbon, King gives underperforming employees a verbal warning and a written warning before finally letting them go. “The verbal warning is signed by the employee, as are the written warning and the [dismissal],” she says. “We always have somebody there in addition to the person and the person’s boss, because if the person refuses to sign the piece of paper, there’s a witness.”
• Remember, timing is everything. According to Deems, many attorneys recommend firing employees on Friday afternoons. He disagrees, though. “If you terminate somebody at 4:30 on a Friday afternoon, that person will be on the phone with coworkers that evening and the rest of the weekend, and come Monday morning you’ll have a very disgruntled workplace. So do it early in the day and early in the week so you can control the situation.”
• Do some good. Deems recommends saving face among your employees by providing fired individuals with outplacement assistance. If you lend a helping hand to the fired employee in order to help him or her find a new job, by offering to be a reference or even by connecting them with a career coach, you’ll do a wealth of good for your company’s reputation in trying times. “Do everything you can to show that you care about your employees,” Deems says.
• End on a positive note. No matter how strained your relationship has gotten with an underperforming employee; try to make your goodbye a thoughtful one. “Give them feedback and encouragement about where their strengths are,” Healey says. “I believe when you fire someone, the last thing you should talk to them about is the strengths you saw in them and how you believe they’ll still be successful elsewhere in a sincere way.”
• Hire better next time. When you replace a fired employee, learn from your mistakes. In other words, don’t be in a hurry to fill the fresh gap in your team; it’s better to hire correctly, not quickly.

Matt Alderton is a Chicago-based freelance writer and editor. He specializes in small business and is an editor for Nielsen’s Small Business Resource Center, where this article originally was published. You can reach him online via his Web site, www.sliversandscribbles.com.

           

Posted on Wednesday, April 30th, 2008 at 2:55 pm and is filed under Employee Relations, Leadership, Small Business. You can follow any responses to this entry through the RSS 2.0 feed.