Save or Sack? A small business owner’s ultimate guide to firing an employee
Firing someone is one task that even HR professionals and Managers (who train for stuff like this for years) find hard to do.
On top of that, if you’re the owner of a small business (like a salon, spa, or fitness centre), with everything inside the walls under your command, firing a staff member (or learning how to do it right) often ends up last on your To-do list.
In order to resolve this challenge for you, I borrowed the handbook method that large organisations use and replicated it for small businesses.
The Handbook method
The Handbook method is employed in situations where business owners are unable to perform a task on their own and need other people to perform it exactly like them. This happens frequently in large organisations.
In order to maintain the quality of work, someone who’s good at the task puts together all their wisdom in the form of a guideline and hands it over to their subordinates. These people can then just look at these guidelines and learn what they need to do in no time.
But I’m not an expert at firing people. Honestly, all my day, I just try not to get fired myself.
But I know how to do my research.
And I like to play around with words too.
So for this blog, I looked for every little trick out there about the correct way to fire a staff member and crafted a little handbook for you. The guidelines, dos and don’ts, common questions, paperwork, and how to break the news to everyone else. All in context of small businesses.
Ready to begin?
1. Understand if you really need to fire the employee
First, you need to decide if it’s in your business’s best interest to fire the employee. This is important because for most small businesses, the employee turnover is high. If you keep firing half-decent employees, you might end up investing all your time in hiring and maintaining a stable team.
But this doesn’t mean that you need to keep cutting some slack to an employee who’s not performing well.
- All I’m suggesting is that before taking the final decision, think twice about the person’s skill set and consider if they may shine at some other job role. In most small businesses, reassignments can be done easily. It also saves a lot of money when you tally the costs of hiring and training your staff.
- Also, sometimes, the person might not know that they’re doing something wrong. (mostly they do). If you think this is the case, sit them down privately and give them some candid feedback on their work. Don’t just criticise the person, but try to guide them about how they can improve. They might take it positively and improve their work so you don’t need to fire them anymore. Or if things still don’t get better, it’ll help you make a decision. It’s a win-win!
2. Take a decision
It’s a hard decision. There’s no doubt in that.
In small businesses, it’s usually the owner who recruits and trains an employee. It might be possible that you are personally invested in the growth of your staff, and would want to give them another chance.
But you need to do what’s right for your business. Even if it means that you need to put your business’s best interest above your personal interest.
3. …And then stick to it
After you break the news, the employee that you’re firing might break down, or the rest of your staff might not support your decision, or you might start doubting your decision yourself.
All of this may or may not happen, but be prepared to stay firm and hold your ground. Backtracking may just raise a question on the credibility of your word, and sometimes, even your ability to run the business.
You obviously don’t want that, do you?
Hence, it’s crucial that once you take a decision, you stick to it. The most practical way to make this possible (except an iron-clad will) is having reasons to back up your decisions.
If your decision is based upon careful thought and, possibly numbers that show that the employee isn’t making profits for the business, it’ll help you in justifying your decision to yourself, and to other people, if need be.
4. Don’t delay it
It’s a natural human instinct. We keep delaying the things we don’t like to do.
Eating those broccolis in the salad, or washing the plates sitting in the sink.
But this shouldn’t be the case with letting someone go. Just like I said before, most employees are aware of their performance, and know that they might get fired. If you take too long to break the information to them, it might mislead them into thinking that their job is safe, or you’re giving them the benefit of the doubt, or you’re okay that at least they’re trying hard.
This is just going to throw them off guard when you finally tell them, thus further provoking them.
On your part, procrastinating is just going to increase your anxiety and build up more pressure to do it right. This may lead to you losing your calm at the final moment and forgetting everything you ever read about the dos and don’ts.
Think long and hard before making the decision. But once you decide, try and do it as soon as possible.
5. Before the meeting…
- Plan the entire thing. That’s the only trick to getting it right. Things that you’ll need to plan about include:
- Location: Hold the meeting in a private room, somewhere you can talk without being hindered. Preferably, someplace you can leave once the conversation is over. This will give the employee a chance to process the information on his own.
- Time: Try to talk to the employee after work hours, or call them early to the workplace. This will help you talk without interruptions from other staff and customers. Also, the employee won’t have to walk out of the room visibly upset only to meet the questioning glances of their colleagues. This will also prevent any outburst they might have in front of your customers.
- Make a list of reasons why the employee is being terminated. This will help you answer any question, and give feedback about their performance. But keep it in mind not to reveal this information until specifically asked to. Even then, mention the points subtly so that it doesn’t feel like badgering.
- Work reassignment: In order to enable a smooth transition, ask the employee to hand over all their work details to a fellow colleague. Choose someone prior to the meeting for this and explain them the situation. Make sure every task that the employee was involved in is properly explained and handed over to an existing staff member. This may include things like re-assignment of next week’s bookings, or customer notes.
- Paperwork: Check your accounts and see if the person has any dues that need clearing. If possible, calculate the net pay due and carry the paycheque with you to the meeting. Also, carry any documents that need to be presented to the employee before leaving (like a non-compete agreement).
6. Dos and Don’ts of the meeting
- Start off the meeting by explaining the objective. This sets an honest tone for the conversation. If you don’t do this at the start, the employee will be caught off guard as you break the news in the middle of the conversation.
- Also establish that your decision is final and irreversible. This won’t mislead the employee into thinking that they can say/do anything to save their job. They might do it anyway, but at least this way, you’ll have made your stance clear.
- Make it short and to the point. Don’t get caught up in emotions.
- If asked, give them feedback, and talk about their future prospects. This will help them move on, preventing any bad blood between both parties.
- Talking about bad blood, it’s obvious for the one getting fired to disagree with you. They might even try to provoke you. But getting into an argument is just going to make things worse for you. If something like this happens, keep you calm, wish them good luck and end the conversation.
- In case of a request for a LOR, answer cautiously. You might think what harm can writing a simple LOR with a few praises can do to your business. But think again. Writing things that aren’t true in a LOR can degrade your image as a business owner in front of your peers from the community. While writing a LOR doesn’t do any harm, make sure to only write things that are true.
7. Informing your staff and clients
A termination often leaves other employees worried for their own jobs.
While it does make a statement and compels existing staff members to perform better, it’s also an opportunity to show professionalism and integrity.
Never discuss the matter with a staff. When enquired about, don’t lie about their absence. Just politely reply that the employee has been terminated (preferably in a way that shows the topic isn’t up for discussion). This way, your remaining staff will see that you respect the people you employ, and just in case they ever get fired, you won’t let them become the gossip of the week .
Follow a similar approach with your clients. Apologise to them for any inconvenience caused due to re-assignment, and encourage them to try and work with a different staff.
As perfectly summed up by the successful salon blog, when performed correctly, a firing involves tact, style, and superb communication skill.
It requires a delicate balance of sympathy, empathy, and firm resolve. It’s also one of the most important business skill you’ll learn as a small business owner.
In this blog, I’ve tried to compile some important tips involved in learning this skill. Is there any thing that you do differently? Do you know something that works better? Tell us in the comments below! 🙂