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How to Fire Someone the Right Way

Bosses in power suits yelling “You’re fired!” make great bad guys on the big screen. But in real life, firing a team member just plain stinks—no matter what the story is. But here’s something more important to think about: When you keep people on your team who you know need to go, you’re not leading your business—you’re neglecting it. Leaders don’t sweep hard decisions under the rug.

So whether you're a small-business owner, a manager or an HR professional, it’s important to know how to terminate an employee the right way. In this article, we'll talk about why team members fail in their roles, the valid reasons to fire someone, and how to fire someone while maintaining their dignity. Take a deep breath, and let's dive in.

3 Reasons Team Members Fail in Their Role

No matter how much you like a team member personally, eventually they have to do their job well or it’s time for them to move on. Just like coaches can’t expect to get to the Super Bowl with underperforming players, business leaders can’t expect to grow their businesses with people who aren’t living up to the expectations of their roles. But before you wrestle with the issue of how to fire someone nicely, let’s rewind a bit. What can you do as a leader to prevent the need to fire them in the first place? If one of your team members is failing, it’s probably due to one of these three reasons:

1. Leadership Failure

Occasional bad hires, team member clashes and limited resources are a part of doing business. We get it. But as the business leader, it’s up to you to:

  • Hire people who fit your needs and culture
  • Quickly deal with conflict between team members
  • Provide clear role expectations using key results areas
  • Give your team the tools and training they need to get their work done
  • Face difficult conversations head on so problems get solved and your people can grow

If you’re not living up to your end of the bargain, your team can’t thrive.

Ask yourself: Will the team member be a better fit elsewhere in your organization? Is the team member teachable and just hasn’t received enough training?

Related article: What Is Leadership?

Free KRA Template

A KRA (Key Results Area) document will help you create clear role expectations for your team. Grab our free template, plus get a couple examples of completed KRAs for reference!

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2. Personal Problems

We all carry hard stuff—a scary doctor’s report, a bad breakup, a car that broke down again. But sometimes a team member’s problems seep into their work and affect their performance for more than a day or two. When you notice things are off with a team member (they’re not engaged in meetings, they aren’t meeting their numbers, etc.) connect with them immediately. Tell them you’ve noticed they haven’t been on their game like usual and you want to understand what’s going on—even it’s a personal problem. You accomplish a couple of important things when you do this, including:

  • You show you care for your team member as a person—not as just another cog in the work machine.
  • You get a handle on how big the problem is and how you might be able to help.
  • You can set reasonable expectations for how soon they can return to full capacity.  

You’ll never be sorry for extending grace, but you’ll need to have regular—possibly hard—conversations to help team members going through a tough time move forward.

Bullseye

Every business goes through five distinct stages. Find out which stage your business is in with our free assessment.

Ask yourself: Does the personal problem look like it’s resolving itself or is it time for a hard conversation?

Related article: How to Communicate Effectively

3. Incompetence

Let’s face it, none of us are great at everything. Some people couldn’t write a line of computer code if you paid them a million dollars. Others couldn’t write a line of engaging ad copy. And that’s okay—unless that’s the thing they were hired to do. You can usually fix low performance issues tied to a skill gap with training and a good mentor. But when it’s tied to their behavior or character, you need to cut the cord. In his book Good to Great, author Jim Collins says to ask yourself: If I hadn’t hired this person yet, would I hire them again? If the answer is no, work up a fair severance package and release them.

Also ask yourself: Is the team member aware their performance isn’t meeting expectations? If there’s a problem with their skill level, is it easily fixable?

Related article: How to Calculate Your Turnover Rate and Improve It

7 Reasons to Fire an Employee

If you find the conversation about if and how to fire someone uncomfortable, congratulations on caring about others. Firing someone is rarely an easy decision. But if you’ve tried everything you can to help a team member overcome their performance issues, the tough truth is it may be time to part ways. Here are seven categories of valid reasons to fire an employee:

  1. Sexual harassment, bullying, violence and safety concerns
  2. Unethical behavior (stealing, lying, falsifying documents)
  3. Company property damage
  4. Lying on their job application
  5. Poor job performance and excessive absences
  6. Drug and alcohol use that violates your company policy
  7. Any other violations of company policies

Related article: The High Cost of a Bad Hire and How to Avoid It

A Step-by-Step Guide for How to Fire Someone Legally (and Respectfully)

If you decide to release a team member, you might be tempted to rip the Band-Aid off and tell them as quickly as you can. But not so fast. We promise we’ll guide you through the steps for how to fire someone respectfully, but first—you need to know how to fire someone legally. That starts with getting familiar with federal, state and local regulations to protect yourself and your company long before you part with the team member.

  • If you’re in an at-will employment state, you don’t need a reason to fire someone—but you should always have a valid reason. The cost to let a team member go, in both money and morale, is tremendous.
  • Even in at-will employment states, you have to follow federal, state and local regulations. Always document why you’re terminating the team member. In the event of any type of lawsuit, the ball is in your court legally to prove it was justified.

Related article: How to Improve Your Decision-Making Skills

A handful of special situations need to be handled a special way. Here are three instances to note:

  • If the team member is still in the onboarding or probationary period: Let them go before they become permanent if they’re not responding to your requests for behavioral changes or changes in their performance.
  • If it’s an integrity issue, like stealing or lying: Say goodbye to the offending team member the day you learn about their break of trust. That’s a fundamental moral matter you can’t course-correct.
  • If you’re angry: Don’t have the firing conversation in a heated moment. And definitely don’t have it if the team member is completely caught off guard and you haven’t previously talked with them about the behavior needing correcting. Only when you’re calm and confident that they know there’s an issue they haven’t made progress in are you ready to let them know you’re letting them go.  

Now, with all those cautions in mind, take another deep breath and let’s tackle the tactical steps of how to fire someone who is not a good fit.

Step 1: Have a security plan in place to cut their technology access.

Before you meet with the person you’re letting go, make sure your IT Department and security team are ready to cut off their computer and remote-login access, email account, building-access badge and any other passwords or security credentials. Sometimes even when you try to release a team member with dignity, they lash out in anger and want to cause damage. While you’re in the termination meeting, have someone else on your team cut all access.

Step 2: Make sure their role is covered.

You’ll need a plan to cover the terminated team member’s work after they leave. Do you have someone on your team who can help until they’re replaced? Do you need to contract a temporary team member? Be sure you know the most critical work the team member was responsible for so it doesn’t fall through the cracks.

Step 3: Choose the best timing.

Once you have your legal ducks in a row, let the team member you’re terminating know as soon as possible—preferably first thing in the morning. Most HR professionals also recommend avoiding firing people on Fridays so the team member doesn’t stew on what happened all weekend. When you let the team member go during the workweek, they can immediately begin applying for a new job.

Step 4: Keep the firing conversation short and controlled.

You’re not alone if you’re feeling  anxious about what to say when firing someone. But how you fire someone is just as important as the words you use to fire them. Here’s how to make the best of the situation:

  • Keep the conversation short. Don’t drag it out with chitchat—that sends the signal that nothing’s wrong. The quicker you share the reason for the meeting, the better.
  • Meet with the person and at least one other leader somewhere in private and tell the team member immediately they’re being fired—and then get straight to why. Be prepared for the them to act shocked, even though you’ve had hard conversations and given multiple warnings leading up to their termination.

Related article: How to Communicate Effectively

  • Write down what you want to say if you’re nervous. That will help keep you on track. In high-tension situations, it’s easy to stick your foot in your mouth accidentally (no matter how kind you’re trying to be). Jotting down notes and doing a quick run-through with yourself of what you want to say can help you avoid words you can’t unsay. Download the Difficult Conversations Checklist for some more practical tips.
  • Stay on course and don’t argue. You may be tempted to respond to their accusations and heated comments, but don’t. Simply acknowledge that you hear them. Period. Having that other person in the room with you is especially important so they can take notes and help you stay focused.

Step 5: Share severance details and allow time for questions.

Answer the team member’s reasonable questions and cover details on things like severance pay and benefits. According to the U.S. Small Business Administration, you’re legally obligated to notify fired team members that they may be eligible for unemployment insurance. Each state has its own rules for who can receive unemployment benefits, so check with your state department of labor if you have any questions. End the meeting by wishing the exiting person the best, but again, be careful with your closing words.

3 Phrases to Avoid When You Fire Someone

Your final prep work in how to fire someone the right way is to train yourself in what not to say . . . aka those statements that sound right in your head but land like a lead balloon the minute they’re spoken. So, remember these three good-hearted but non-helpful phrases to keep out of the conversation.

1. “You’ll be happy about this decision later.”

This may be the truest statement you’ve ever said, but your team member doesn’t want to hear about that silver lining just yet. They’re processing what’s happening now, not thinking six months down the road. They’ve been fired, they might think you’re a jerk, and it might feel like this is the worst thing that could’ve ever happened to them.

2. “It’s as hard on us as it is on you.”

No, it’s not. Yes, your team will feel the loss, morale will be shaken, and you’ll take a temporary financial hit—but they’re losing their job and being told their work doesn’t measure up. You still have a job. At this moment, they’re thinking about the impact on them, not you.

3. “If there’s anything I can do, let me know.”

You just fired them, so why would you write a letter of reference or recommend this person to anyone else for a job? Platitudes or false hopes are the last thing they need.

What Comes After the Firing

Phew! We’ve covered a lot of ground. Once the person is terminated and officially off your payroll, no more worries, right? Actually, you’ve got a few more steps to take before the day is finished.

  • Set up a time when everyone is gone for the former team member to pack up their personal belongings. You don’t want them to be embarrassed or have to answer awkward questions from the team. An HR person or other leader can stay with them as they gather their things.
  • Tell the person’s former team members as much as you can about their termination while still honoring the team member and the relationships they had with their team. The person being fired isn’t the only one hurting. Your team members are processing change and loss too, so show lots of grace. Even if they’re relieved you’ve dealt with a team member’s underperformance or misbehavior, the shift will rattle them. In some cases, they’re losing a friend and need time to process what’s happened.

What’s Next: Remember the Golden Rule

Letting people go is one of the hardest things you’ll do as a leader. But when you do it thoughtfully, it’s a powerful demonstration of servant leadership—to your team and to the person being released. Servant leadership goes hand in hand with the Golden Rule: Do to others what you would have them do to you. (even when it makes you uncomfortable). So, act the way you’d want to be treated if you were being fired, and let compassion and generosity guide you.

Related article: What Is Servant Leadership?

Firing (but doing it right) is sometimes necessary at every stage of business—whether you’re a Treadmill Operator, Pathfinder, Trailblazer, Peak Performer or even a Legacy Builder. If you’re not sure which stage you’re in, check out our EntreLeadership Stages of Business framework. You can also learn more about the Stages of Business and how to fire someone the right way by listening to The EntreLeadership Podcast—where you’ll get real-life leadership insight from respected leader and small-business expert Dave Ramsey.

Frequently Asked Questions

If you’re in an at-will employment state, you don’t need a reason to fire someone—but you should always have a valid reason. The cost to release someone, in both money and morale, is tremendous.

Even in at-will employment states, you have to follow federal, state and local regulations. Always document why you’re terminating someone. In the event of any type of lawsuit, the ball is in your court legally to prove it was justified.

If you’re in an at-will employment state, you don’t need a reason to fire someone—but you should always have a valid reason.

  1. Sexual harassment, bullying, violence and safety concerns
  2. Unethical behavior (stealing, lying, falsifying documents)
  3. Lying on their job application
  4. Poor job performance and excessive absences
  5. Drug and alcohol use that violates your company policy

Additional reasons to fire someone include damage to company property and any other violations of company policies, including social media policies.

No matter how much you like a team member personally, eventually they have to do their work well or move on. Once you’ve decided to release them, follow these five steps for firing someone the right way:

Step 1: Have a security plan in place to cut their access to the company’s technology and company building.

Step 2: Make sure their role is covered by coworkers or a contracted worker.

Step 3: Choose the best timing, aka as soon as you can once you’ve made your decision. We recommend doing it first thing in the morning and not on a Friday.

Step 4: Keep the firing conversation short and controlled.

Step 5: Share severance details and allow time for questions.

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Ramsey Solutions

About the author

Ramsey

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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