When you’re working at a startup, the cost of an under performer is enormous. Besides their sub-par work, and your personal frustration of managing them, there’s also a hidden cost. While you’re umming and ahhing over deciding whether to take action, everyone else on the team is picking up the slack for your under performer, and watching them continue to get away with it.
It’s never easy to fire someone, but it’s part of business. In this article we talk about how to fire the right way – with empathy, and making sure all legalities are covered.
Being fired should never be a surprise. If you’re giving feedback and providing ongoing performance management, both you and the underperformer should be clear that things aren’t going well.
Note: Of course, there are reasons to skip performance management and proceed directly with firing. Theft, sexual harassment or absenteeism would all be cause for immediate dismissal and should not be tolerated.
As soon as performance starts to decline, have a conversation with your team member. Be straightforward about what isn’t working and what consequences that is having on the team. I really like the Radical Candor format, but find what works for your style. Have the employee repeat feedback back to you until it matches what you mean. You need to be on the same page.
If issues continue to worsen, it’s time to put things in writing. You might know it as a Performance Improvement Plan (PIP) but essentially, it’s a written agreement on how performance needs to improve if the employee wants to continue their employment. Putting it in writing means that there’s no room for interpretation, and it also helps provide cause for dismissal (more on that later). Have a timeline for following up and checkpoints so that you can track progress, or lack of it.
Okay, so you’ve noticed a performance issue, you’ve provided feedback and nothing’s improved. No use trying to draw it out, it’s time to let the person go.
Ultimately, the way you fire someone is a bigger reflection on your company than the way you hire. Being empathetic and considerate will help your ex-employee look forward into new opportunities, and prevent ongoing conflicts. Company values are easy to stick by in good times, it’s much harder when you’re going through termination procedures.
Every country will have different legal requirements around dismissals. If you don’t have an in-house HR team, I strongly recommend bringing in a consultant for terminations. They will ensure everything is done by the book, and it protects you from potential lawsuits.
You can help them do their job by capturing any previous actions in writing. Save emails, PIPs or conversations about poor performance for future reference and provide them to the HR team.
You’ll also have to consider providing a severance package to the terminated employee. Generally speaking (please do check with your HR team on this) severance is not required by law when someone is dismissed with cause. However, you might want to think twice about terminating a member of the tech community and treating them poorly – it might come back to bite you. I like Moz’s guidelines – 1 month severance pay, plus an additional month for each year they’ve spent at Moz.
Terminations can be difficult for those left behind, especially in a close-knit startup culture where transparency is the norm. It’s possible that no one even knew that the terminated employee was struggling – especially if you were being considerate about how you managed their performance. They might be concerned that their own jobs are at risk, since this termination came “out of nowhere”.
When communicating terminations, you’ll need to balance the need for transparency with respect for your ex-employee’s privacy. A good rule of thumb is to become more opaque the further away from their position you get. For example – their closest teammates could be told that they were struggling with performance, had been given feedback and not met expectations. Other departments don’t require as much detail, but simply to be told that the employee has left. Outside the company, it’s not necessary to mention termination at all. Rand Fishkin talks about this in more detail in his post on firing.
Firing is difficult for everyone involved – managers who need to make a tough decision, usually about an employee they personally hired, the team left behind, but most of all on the person let go. But you control the conversation. It’s up to you how terminations happen. They can either be a bitter-sweet parting of company, onward to new opportunities – or a destructive, litigious battle. Keeping company values at the core of termination can make it a better experience for everyone.