If you’re an entrepreneur who has employees, you probably know that firing an employee is one of the hardest things you will ever have to do.
For a small business, where you and your employees often feel like family, having to fire someone is especially difficult.
There may be many reasons for termination, but no matter what they are, the situation will be upsetting for everyone. It’s important to know how to fire an employee the right way to keep the situation smooth and dignified. Here's our best advice on how to make a tough situation just a little bit easier:
1. Be Clear that You’re Firing Them, and Explain Why
There are many possible reasons to fire someone and it’s important to be clear on what these are. Is the company is downsizing due to poor business performance? Did the employee perform poorly?
Whatever the reason, it’s best to be clear as early as possible in the conversation. Don’t invite the person in and chat about the weather; it's not fair to drag out an unpleasant task.
Get to the point right away and answer questions as simply and clearly as you can.
Also, don’t hint at the fact that they’re fired and hope they’ll get the message without coming right out with it. Say it clearly, but kindly: "we're letting you go" or the literal "you're fired."
2. Firing Should Never Be a Surprise
Firing is a process. Ff you know how to fire someone properly, they should never be surprised.
If your company needs to downsize, it can be helpful for your staff to understand the position the company is in. This is much simpler with a small business where most employees will already understand the financial situation of the company. That way, if someone is planning to quit or retire, you may be saved the pain of firing someone else.
If you’re firing an employee for poor performance, you should be sure to give warnings and performance reviews ahead of time. Give them a chance to improve their work and make firing them your last resort.
If you do decide to fire an employee, have documentation to back up your allegations. For example, if they’re consistently late handing in projects, keep a list of every incidence. This will help remove the element of surprise and will cover your actions from a legal standpoint.
3. Fire the Person Nicely
Even if you’re firing an employee for poor performance, you can learn how to fire someone nicely.
Remember that it's never a good idea to humiliate anyone. Treat the person you're firing with dignity and give them the news privately, not in front of other employees. If possible, fire the person once the other employees have left so they don’t need to leave in front of them.
Provide reasons and explanations. If you’re firing due to downsizing, you don’t want to burn any bridges. Perhaps you’ll want to collaborate with this person in the future.
You also want to avoid a scene. Unpleasant scenes are bad for the morale of the rest of your employees. This can usually be avoided by asking someone to stay late at the end of the day when you deliver the news.
4. Follow Company Policy, and the Law
It is very important for your business that you fire employees correctly. This means knowing what to say when firing someone, having all the correct paperwork and documentation, including a termination letter, and following procedure.
You should have policies in place that determine when and how an employee can be fired. These will dictate why you can fire someone and the steps you must follow, including verbal and written warnings.
Make sure you’re aware of your state Department of Labor’s laws and regulations regarding terminations and read through the federal law to see how they apply to your situation.
Providing a termination of employment letter will ensure that all the details are clear, including notice period and termination date. Make sure to run this past your legal department or business lawyer before you hand it over.
5. Have a Witness
If you have a human resources department, make sure there is a representative in with you when you’re firing an employee. If you have no human resources personnel, as is the case for most entrepreneurs, have someone you can trust or someone senior be a witness to your conversation.
This will help to prove you acted legally and ethically in a case where the employee brings a legal suit against you. It may also help both sides to stay civil and controlled, especially in a case where you may expect anger or violence upon delivering the news to the employee.
Protecting Your Business
As a business owner, you have the responsibility to protect your business from anything that could go wrong.
Most business owners understand the need for general liability insurance so you can work on growing your business without concern. However, termination policies are often overlooked when considering steps to take to hire employees and expand your business.
Unfortunately, firing employees is part of running a business and clear termination policies can help you through this process. Have clear lists of reasons to fire someone and know how to go about it the right way. This will keep your business running smoothly and help you get over the unpleasant situation of firing someone as quickly as possible.