You’re Fired!

As a senior partner at Schaffer Consulting with more than 30 years of experience restructuring and reorganizing large and small businesses, Ron Ashkenas has seen the good, bad and ugly ways of firing an employee. Working alongside Jack Welch to completely restructure GE in the 1980s, Ashkenas witnessed how making a company leaner and more efficient meant letting many types of employees go, and he knows how and when to do it right.

In general, when is firing an employee appropriate?
Firing an employee is a process, not a single act. It’s appropriate when you have gone through that process. It’s not a matter of how many chances you give. All employees need certain levels of performance, and you have to be clear about the performance level needed. If employees are not able to operate at a level of performance that’s appropriate, they should get a certain amount of feedback to help them get better. If that feedback doesn’t help, they have to have some sort of a warning or be put on notice of what needs to be done to get better. If that still doesn’t work, it may be appropriate to let them go.

Where do you usually see that disconnect between expectations and performance?
Usually when firing an employee, it’s a matter of mismatch between the employee’s skills and abilities and what’s needed in the job. That’s usually discovered through a process that happens over time with the right measures. Another less common issue is when an employee’s attitude or some sort of an inappropriate behavior, which might be an illegal issue or fraud, is destroying the morale of the workplace.

What’s the most common mistake you see happening during the firing process?
The first common mistake is not going through the process — not giving the person the right kind of feedback, not giving a warning, not having set time frames, not having a discipline about it and not documenting the issue. Not going through that process over time is bad for the employee and for the manager or the company. It opens [the employer] up to lawsuits or unfair practices. It’s also not good for the employee. If it’s clear this is not a good match between the employee’s skills and abilities and the job, [the employer] should give time for the employee to find something else. There may be another opportunity in the same company.

What is the most common impetus for that mistake?
What triggers that common mistake is to treat firing as an emotional issue as opposed to a clear intellectual issue. It’s obviously an emotionally fraught situation — it’s serious stuff when you’re going to tell people their livelihood is at risk and they may not have a job, pay their mortgage or feed their family. One of the things a manager and an HR practitioner has to do is to not look at it just through an emotional lens. When they do that, they often don’t do the firing — they let people stay who are not the right match for the company and for the job — or they do it in a knee-jerk way. They get so fed up and frustrated they just fire an employee without going through the process that would be helpful to everybody.

What’s a firing meeting, and what are its benefits?
The firing meeting is not a one-time event, it’s part of an ongoing process. It shouldn’t come as a surprise to the employee because it should be a series of meetings that go through the employee’s performance, what’s required and what measures the employee needs to take to improve. It should all be transparent. When they have come to the conclusion that the employee’s performance is not up to what is required, and what they’ve done doesn’t look like it’s going to work, they have to come to the conclusion they are going to separate. That’s the firing meeting. It’s the conclusion of a series of meetings.

What are best practices to conduct a firing meeting?
It’s stating very clearly the situation, the consequences, the timing and the employee’s benefits. Obviously it’s an emotional thing for the employee; nobody likes to get bad news, to be told they are not a good fit, but they do want to know what’s next. They need a little time to accept the emotional consequence of being fired, and then they need a little bit of support about what happens next. The firing meeting should be relatively short — here’s the news, and here are the next steps. Give the employee some time to internalize and think about it.

When is firing an employee counterproductive?
It can be counterproductive in two ways. One is not firing people who should be fired. You feel emotionally responsible for the person and don’t want to do anything to hurt him or her. You end up with mediocrity. Other members of the team see that and have to take on the burden of more work because of someone who wasn’t able to carry the load. Another type of a counterproductive action, and this is particularly important for managers and HR practitioners who don’t like to give people direct feedback, is where they haven’t had a series of meetings where they talk to the person about performance and not being up to speed. The anxiety of that avoidance causes them to not be clear and honest with the employee over time. You get to the point where you have no choice — you have to fire him or her.

After the firing process is complete, what’s next?
People do not work in isolation. They work as part of a team or with colleagues, and when one person from the team is either let go or fired, it sends a ripple effect through the rest of the team. Other people on the team want to know what it means for them. They want to know if someone else will be hired in that person’s place and the lessons that can be taken from that person being let go. It’s very important that a manager or HR practitioner have a discussion, either as a group or one-on-one, as opposed to just sending out a note letting employees know so-and-so has been fired. If you can, manage the human emotions around this. Understand that people are concerned about their own livelihoods and how it affects them.

Understand the Employment-at-Will Policy

Every state except Montana gives employers the option to adopt an “at-will” employment policy, meaning an employer may terminate any employee at any time, for any reason, or for no reason at all. Employee agreements or contracts may contradict the at-will policy, so it’s important to be sure of related verbiage.

Know when it’s illegal to fire an employee. The power to fire is not unlimited. Employees can’t be fired because of their age, race, gender, religion or disability, or because they are a whistle-blower and complained about illegal activity. Employees also cannot be fired for taking family or medical leave.

Document performance issues. Despite the at-will policy, document instances of poor performance and tardiness, and maintain records of employee performance reviews and any previous disciplinary interventions. This will provide legitimacy to the firing and help to prevent any complaints, lawsuits or accusations that termination was discriminatory.

Provide the final paycheck. Employers are not required by federal law to immediately give former employees their final paycheck. However, some states require immediate payment and are specific about what should be included, such as accrued or unused vacation days. Contact the appropriate state labor office for information.

What about severance pay? There is no requirement in the Fair Labor Standards Act that a company must provide severance. This is a matter of agreement between an employer and employee.

Source: The U.S. Small Business Administration. Read more at SBA.gov.