How To Fire An Employee – The Right Way

It’s never easy to fire someone but it’s sometimes necessary. Here’s how to do it the right way.

Featured Download: Get the entire process map that walks you through what to do when an employee isn’t performing, including how to handle the actual termination. (Click here to download)

Nothing slows down a startup like bad hiring – expect when you keep those bad hires around for longer than you should. Without a doubt, the hardest part of building a startup is people. More specifically, it’s firing employees who aren’t performing.

When it comes to people, some just interview really well – they say all of the right things, present a great personality and have glowing references. But a few weeks after they start, you realize you’ve made a mistake and that they aren’t performing anywhere near what you expected.

At this point, most founders would sit them down and fire them straight away. That, however, is the completely wrong approach – unless you want to anger them and give them a reason to retaliate. The key to firing lies in 4 main principles, which are explained below.

First, an employee should see it coming. It never, ever makes sense to fire someone on the spot – unless they’ve done something illegal. An employee should always know in advance that being let go is a real possibility if they don’t improve.

Second, they should be given a chance to improve. They need to know exactly what you expect of them and should agree to meet that one key, measurable goal within a specific time period.

Third, their ego should never be damaged. If they can’t improve, you need to put yourself in their shoes and help them transition out of the role, without hurting their ego. Remember, most people can find a new job, but they have to break the bad news to their partner, kids and friends.

Assuming their termination is performance related, you should help them with the transition so they’re back on their feet as quickly as possible.

If they tried their best but simply couldn’t perform, it may just mean they weren’t right for that specific role, so you can help ease the transition out of your startup in a few ways:

  1. A reference letter / LinkedIn recommendation
  2. Reaching out to your network and referring them for open positions
  3. Offering 1-4 weeks severance so they have time to interview and find a new role

Fourth, you should never lie to your other employees about why the person was fired. Be brief, but make it clear they were fired for performance reasons.

This helps set a culture based on performance, not politics or tenure. This is one of the foundational elements all startups use to drive continual performance.

Always communicate the firing to your team and give the person who was fired a chance to say goodbye to their colleagues. If they are a genuinely great person that just couldn’t perform, also consider farewell drinks or a lunch for them, especially if they’ve been around for a while.

In the video above I go into a lot more detail about each of the four points above. You should also download the process map that accompanies this post. Just click the link below to get it.

Featured Download: Get the entire process map that walks you through what to do when an employee isn’t performing, including how to handle the actual termination. (Click here to download)

Would you like me to personally 2/3/4x your revenue this year? My new "Revenue Accelerator" coaching program is now open. Learn more and see if you qualify.