The most challenging and important decisions leaders face are deciding who to hire and fire. Deciding if and how to fire someone is especially fraught with emotional, ethical, and practical considerations, and it’s essential to apply a blend of empathy and objectivity. In the last issue, we explored how to get the right people in the right seats in a way that sets up the best chances for success. In this issue, we’ll explore some of the considerations for leaders when they get an inkling that a people change is needed.
When to terminate
“Letting go of an employee is not a failure; it’s an opportunity for growth and improvement for both the individual and the organization.” — Tony Hsieh, Founder of Zappos
When there are obvious reasons for termination, firing decisions can be more straightforward. Some commonly accepted “easy” reasons for termination are attendance issues, theft, sharing confidential information, sexual harassment, violence, threats, damaging property, or falsifying records. In these cases, document them and move swiftly holding to the ideas in the next section.
Harder is when the reasons are less obvious. Even with good hiring, onboarding, and development practices, you can make mistakes. Or people and the business can change. The question of whether to fire someone is not just about performance metrics or the “easy” violations listed above; it’s also about fit and future potential. Leaders must reflect on the company’s direction and the composition of their ideal team.
“Letting the wrong people hang around is unfair to all the right people, as they inevitably find themselves compensating for the inadequacies of the wrong people. Worse, it can drive away the best people.” — Jim Collins, Good to Great
These reasons are harder to recognize and to admit they need to be addressed. Leaders should ask themselves:
- Does the person align with the vision and culture of the organization? Do they make it a better place to work and contribute to the long-term goals?
- If the employee were to resign, would there be a determined effort to retain them? Netflix formalizes this into a “Keeper Test.” Employees failing this test are “offered a generous severance, giving them time to find a new company.”
- Is the person still enthusiastic about the company? To help ensure everyone has the motivation to stay and contribute, Zappos offered employees $2,000 on day one and beyond if they leave.
- Do I feel the need to tightly manage them? As Collins says: “The moment you feel the need to tightly manage someone, you’ve made a hiring mistake. The best people don’t need to be managed. Guided, taught, led -yes. But not tightly managed.”
When you get a tingle that things are not right, it’s time to dig deeper. Regularly evaluate candidates using the same criteria you used for hiring. These evaluations should be done at least annually, but allow for more frequent evaluations to avoid letting the wrong people “hang around.” Regularly and as needed check that you still have the right person and that they are in the right role.
First, evaluate whether they are the right person. Do they still align with culture? This evaluation checks against your mission, vision, and values. If there are any failures, it is possible that a person does not understand them well. In this case, point out where they failed. If you immediately see improvement, then they likely share a belief system that aligns and no further action is needed. If not, or if there is a long trend of poor performance, there is not a culture fit and you have the wrong person. The wrong person cannot be rehabbed or find success in another role. Most companies use a 3 strikes role before terminating the wrong people; I suggest that is one or two too many chances.
If you have the right person, the next evaluation is for the right role. This evaluation is against role GWC and Accountabilities:
- If they don’t Get it: train them, put them in a position that they do get, or let them go.
- If they don’t Want it: put them in a position that they truly want for the right reasons, or let them go.
- If they don’t have the Capacity or fail to meet accountabilities: put them on a performance improvement plan to learn needed capacity, free up time, or let them go.
Note that it can be advantageous to keep the right person if changes can be made. A crucial action in this process is to share evaluations as feedback. The need for improvement and possible outcomes should never be a surprise.
As part of everyone’s development, use regular 1-to-1 meetings to have an open dialogue about performance. Use them to understand the root causes of underperformance and whether the employee takes accountability for their actions. If the right person is coachable and shows a genuine desire to grow, a performance plan with measures of success may be a viable alternative to termination. Documentation is important in the event termination is eventually required.
However, if you have the wrong person, or if there’s a clear lack of willingness or ability to adapt to the right role, swift action is appropriate.
How to Terminate
“To let people languish in uncertainty, stealing precious time in their lives that they could use to move on to something else when in the end they aren’t going to make it anyway – that would be ruthless. To deal with it right up front and let people get on with their lives – that is rigorous.” — Jim Collins, Good to Great
Once you decide to fire someone, do it promptly. It can be easy to be concerned for your own feelings and the fear of consequences even when you know the right answer. Not acting is against the best interests of the person and the company. They are most likely unhappy with their current situation. Others are likely impacted by their actions.
“Great leaders make tough ‘people decisions’ and are tender in implementing them.” — Brene Brown, Dare to Lead
Commit to moving forward with courage, generosity, and kindness, and allow for as much dignity as possible. Find the best outcome for all. Employees trust you with their career when they join; make sure to keep that trust throughout the termination process. Be sure to put your ego and fears aside. It’s not about protecting yourself or creating an excuse for broader problems. Engage both your head and your heart throughout.
Here are strategies:
- Legal Compliance: Familiarize yourself with relevant employment laws and company policies to ensure that the process is conducted legally and ethically. Legal requirements vary greatly depending on our location and other factors. Check with an expert if needed.
- Preparation: Plan the process. Consider logistical details such as timing, location, and who will be present during the conversation. Plan any actions that need to be done during the conversation. Sometimes it is important to limit the person’s access to company resources in preparation for, during, or immediately after the conversation.
- Communicate Clearly: Start directly with the topic. Ensure that the reasons for termination are stated clearly and with respect. Provide constructive feedback and be transparent about the decision-making process. Make sure to communicate it as resolved. Allow for questions of understanding, not alternative possibilities. Focus on relevant facts and not any issues or concerns you have.
- Offer Generous Support: Help them land on their feet with a new role that better fits them. Offer support resources such as severance, career counseling, and willingness to act as a reference, make referrals, and help land new employment.
- Be Humane: Approach the conversation with empathy and compassion. Regardless of behavior, they likely have reasons. Be kind. Understand that termination is almost always emotionally challenging. Act in ways that allow the exit to be as graceful and with as much dignity as possible. Give them choices on how to proceed when possible.
- Next Steps: Give explicit clarity on the next steps. Give directions for any remaining pay due, completing needed paperwork, and out-processing. State any boundaries around access to others and company resources. Decide what will happen when they leave the conversation. Decide how to notify colleagues.
- Internal Communication: Communicate the termination to other team members professionally and respectfully. Emphasize confidentiality and the importance of maintaining a positive work environment.
- Learning and Improvement: After the termination, conduct an exit interview and reflect on the experience. Consider what lessons can be learned to improve future processes. You may find ways to prevent similar situations or to more quickly identify issues in the future.
Be especially aware of the impact of decisions on remaining team members. Clear communication and support are vital to maintaining trust and morale in the team after any termination. After firing someone, you may find relief, or you may find deep regret or fear from other team members. Be prepared to address different reactions from different people.
The decision to fire an employee should never be taken lightly. It requires a thoughtful and strategic approach, considering the well-being of both the individual and the business. Leaders must balance compassion with the hard realities, always acting in the best interest of the company’s culture and vision.
What insights and guidance can you share on the right way to approach firing? What lessons have you learned?
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May you find Passion, Joy, and Freedom in all life’s adventures.
Horizon Line Group 