Tips for Firing Employees -- and Keeping Them

Make termination as painless as possible when performance reviews fail.

It's never easy to fire an employee, but when circumstances force your hand, the action must be taken quickly and cleanly. If it's handled well, it shouldn't be a surprise.

Here are some tips for ensuring that when a termination situation arises, the process is as painless as possible:

  • Don't make small talk. Get to the point.

  • Don't act like a friend. Show compassion, but keep the meeting on a business footing.

  • Don't argue or debate the termination.

  • Don't put down the employee in any way. "It's not the individual, it's their performance that is the problem," Bill says.

  • Don't allow for confusion. Use notes or written communication, including performance reviews, to document what the problems have been and how you've tried to resolve them.

  • Don't try to soften the blow by lengthening the discussion.

  • Don't feel guilty.

Before the meeting, ask yourself if everything possible was done to bring the employee's performance up to a satisfactory level. One way to do this is by making sure employees always know where they stand. Terry Bennett, president of Terry Bennett Builders & Remodelers Inc. in Westlake, Ohio, uses quarterly performance reviews that grade every employee in seven key areas. The total points vary per section and by the individual position in the company.

The employee's total "grade" determines how much of a quarterly performance bonus he receives. The highest score earns a bonus of 10 percent of salary. Below a certain minimum, no bonus is received, and at the lowest end the employee is placed on probation. "If they don't raise the grade, they will be terminated at the next review," Bennett says. The format ensures all employees are well aware of their strengths and weaknesses and can see where they need to focus to improve—and to remain employed.

The good news is that while letting someone go for economic reasons can cause tension, firing an employee for bad performance can often boost morale. Other employees usually know where the deadwood is, and they resent having to make up the difference or do more than their share. Firing someone who isn't pulling his weight makes other employees know that the company has high standards and recognizes who’s doing good work.

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