There’s one task that fills small business owners and managers with dread more than any other: firing staff.
It’s the toughest of the tough conversations; a humiliating and upsetting experience for your employee and one that forces you squarely out of your comfort zone.
No surprise, then, that many business owners ‘solve’ the issue by avoiding it altogether. But a problem employee can do a lot of damage to your business and your wider team while you drag your heels, taking a ‘wait and see’ approach.
Bottom line: you need to take action. But the process for making the decision to dismiss an employee often depends on what they have (or haven’t) done.
Summary dismissal: Firing can be ‘easier’ when you have no choice
Sometimes deciding to terminate employment is reasonably simple – for example, when your staff member has been involved in serious misconduct. This is usually in the form of:
- a major breach of occupational health and safety
In many cases, immediate dismissal is often appropriate – even necessary – especially if safety is an issue.
NB: If you have a valid reason to make a police report about the incident at this point, be sure to do so. It can help you substantiate your case if your employee decides to take an unfair dismissal case to the Fair Work Commission.
What about ‘grey area’ dismissals?
Making the decision to fire someone can be more complicated when it’s an under-performance issue.
On one hand, whether your staff are not delivering on their potential or they fail to perform despite working as hard as they can, the result for your business is the same – the work isn’t up to standard and your productivity will suffer.
On the other hand, in a small business your team can feel like a part of your family. This complicates things, because you genuinely care about your staff, so you may find yourself giving them too many ‘second chances’.
You also may worry that you’ll regret your decision – what if all they needed was the right encouragement or some clearer instruction? What if you are sending them on their way unfairly or prematurely?
8 ways to ‘sanity check’ your decision to terminate
When our business coaching clients find themselves unable to make a decision regarding the future employment of one of their team, we mentor them to look at the issue from a few different perspectives:
- Trust your gut – straight up, if the thought of firing them is occurring to you, it means that something is setting off your internal ‘alarm system’. It’s at least worth an investigation.
- Consider whether the role has ‘outgrown’ them – sometimes when a business grows quickly, or there are sudden technological changes, it becomes obvious that an employee no longer has the required knowledge, skills or depth of experience to do the job. If training or mentoring won’t solve the problem in the timeframe required, then you may have to consider letting them go so you can re-fill the position with a better ‘fit’.
- Ask yourself, ‘what if’:
- What if I had the chance to put together my ‘dream team’ – would they make the cut?
- What if there was a job opening in my business and they applied – would they get the job?
- What if they threatened to quit – would I try to stop them?
- Get an objective perspective – often if we believe someone’s efforts aren’t up to standard, we’ll see their every move through that lens. Ask someone to objectively assess your team’s performance – do they bring up the problem employee?
- Ask your employee outright – if you have attempted to address this team member’s lack of performance in that past, ask them why they think they haven’t been able to make the changes. Do they blame others or take responsibility?
- Reflect on the cultural impact – by the time a problem staff member’s behaviour or lack of performance has forced you to consider termination, chances are there have been significant negative impacts on the wider team. Whether they’ve had to pick up the slack, put up with poor manners or constantly fix mistakes, it is bound to affect your credibility as a leader if it appears that you are failing to address the situation. If other staff are regularly making complaints about one of their own, the issues they are raising are likely just the tip of the iceberg.
- Consider the business costs of taking a ‘wait and see’ approach? – is delaying the decision to end the employment relationship costing you productivity, money and general staff morale? If the answer if ‘yes’ then you have to put the welfare of your business first
- One last tough question: are you partly responsible? – try to remain objective as you examine any potential role that you may have played in creating the issues you have with your employee. Ask yourself:
- Have I offered and facilitated proper training in all aspects of the job?
- Have I been clear in my expectations of this staff member?
- Have I provided them with feedback explaining that their work isn’t up to standard and worked with them on a plan for how they can improve?
- Did I (eeek!) simply hire the wrong person for the job?
Giving your employee ‘one last chance’
Often when an employee isn’t a complete disaster, or isn’t intentionally doing a poor job, it’s often appropriate to give them an opportunity to fix the problem. This, at least, gives you peace of mind that you’ve done all you can.
First, fair warning
You may have heard the old ‘three-strikes’ rule (ie that you are required to provide an employee with three warnings before you can let them go). This isn’t strictly true, but unless it’s a case of gross misconduct (where you may terminate employment without notice), you should give an underperforming employee fair warning.
NB: We mentor our coaching clients to formalise this process. While verbal warnings are legally valid, written warnings are preferable in terms of ‘evidence’ – especially if you end up in front of the Fair Work Commission defending an Unfair Dismissal application. Therefore, if a verbal warning is given, it should become your policy to document, date and sign off that this has occurred.
At this stage, if your team member’s employment is at risk as a result of their conduct or failure to perform, you should make this clear and allow them to respond to your assertions. Their reaction may be to:
- apologise and ask for a chance to improve
- share insights about aspects of their role that make it difficult or impossible to meet your expectations
- reveal that they are experiencing personal difficulties that you were not aware of
- claim that you are being unfair and refuse to acknowledge the truth of your allegations or take responsibility
This reaction can be very revealing about the character of your employee and may well affect your ultimate decision about whether or not you feel they have a future with your business.
Making a plan for improvement
If you are satisfied that there is a good chance that your employee is able and willing to improve, you’ll need to work together to create a development plan. A basic plan should cover these six elements:
- Clearly communicate your expectations – you will need to explain to your employee what the expected standards are and detail how they are not meeting them
- Areas of focus – list what they would need to improve upon to get their performance up to standard
- What actions they must take – lay out a clear and specific plan for how they can implement changes that help them meet your expectations
- Measurement – detail how you plan to gauge their improvement
- A reasonable timeframe – provide a deadline for when they need to have achieved this by
- Support – get their input on how you can assist them as they make these changes
Agree upon a schedule for checking in on how they are progressing with the plan. Are they making the necessary changes? Great! There may be hope for their future with your business. If, on the other hand, they just don’t seem to be lifting their game, despite all your ongoing support, its time to let them go.
NB: It is much easier to navigate this process if you have clear policies in place that detail (for both yourself and your employees) how things like performance, written warnings, development plans and dismissal will be managed. This way, employees will be familiar with performance management processes and will know what to expect.
Decision made… what now?
At this point, either your hand has been forced by your employee’s gross misconduct, or they have failed to demonstrate improvement despite being given every opportunity to do so. That’s it – they have to go!
So… what comes next?
Join us next week as we lay out a roadmap for firing someone the right way – ie with a compassionate and respectful approach that minimises risk to your business, while also preserving your employee’s dignity.