What is the best way to let an employee go?

By February 15, 2017September 10th, 2018Staff


Sometimes it just doesn’t work out. For lots of reasons. For reasons no one could have predicted. Sometimes, you have to let someone go.

It’s not always because of under performance. Sometimes it’s just about where your business is at. When running a small business, it can be hard to create the simple ladder of junior, middle weight, senior and so on. There becomes a point where you need people to leave to create space for those on the up. Or there comes a point where they have to leave, because there’s no empty rung on the ladder for them to climb to.

It’s never pleasant. You’ve probably been putting it off. It’s that knot in your stomach, right? But it’s time to deal with it. This is where to start.

The initial conversation

I really believe honesty is the best policy here. Start with a conversation around how they feel their work is going for them. Do they feel they are meeting their goals? Let them know, as clearly and as sensitively as possible, and that one option you’re considering is letting them go.

You’ll find one of two things will happen. One, they could be jolted out of their complacency. Or two, they will admit that they want to leave. Whatever the outcome of the conversation, it’s important to put a deadline in place for them to decide on a commitment either way. And it’s great if you can offer a way forward, whether it’s helping them reassess their goals or a departure date. Be clear, open and honest.

The other common situation to come out of this conversation is when they say everything is fine just as it is. You then you have a clear understanding that the employee is coasting along. Sometimes this is fine. Sometimes not. It’s fine if that’s what you need and they don’t need any greater reward in terms of a pay rise. For me, unless you’re actively trying to reach goals then a pay increase isn’t on the cards.

So what if you do need them to do more? This is the time for managing their performance on a regular basis. Can you motivate them to achieve the new goals you’ve set? What are the barriers to making this happen? Hopefully, they’ll get on board or they’ll see that it’s time for them to leave.

It’s also at this point that you need to revisit the roles you need in the business. Perhaps the role itself is redundant. In which case what you’re looking for is to redesign the position, and then consider whether the person fits that role’s description.

In some cases, its useful to look at the whole staffing structure anew. It’s can be surprising how quickly your staffing needs change, particularly if your business is a growing concern. Sometimes, a staff member who’s not performing can be a symptom of a bigger problem – a team with the wrong roles in it, a lack of mid-level roles to effectively manage processes, overwork or underwork. It never hurts to draw up a new staff structure and consider if it suits the current needs of your business. A quick rearrange can save a lot of grief.

Finally, don’t forget to examine your own roles and those of middle management. It’s often said that workers don’t leave jobs, they leave people. Is a staff member underperforming because their immediate supervisor is underperforming? Move people around in your structure and you might get another result.

But let’s assume that you have an underperforming staff member and you’ve decided…

It’s not me, it’s you

If you’ve decided that the role is not working for the business and you need to look for a different person to fulfill the new role you’ve identified, then you have to face an unpleasant reality. No one enjoys being the bearer or bad news but that shouldn’t stop you doing what is necessary for the business.

First up, understand what your responsibilities are to your staff member (remember the contract I mentioned in my earlier post) and ensure you don’t breach any of their rights as an employee. The Fair Work website has great guides here for you to inform yourself (and your employee) and has a template for the letter you need to hand over. We recommend that you always get legal advice whenever terminating someone’s employment – better to be safe than sorry.

This is never going to be an easy process for you or the person you’re making letting go. There’s a lot of emotion that comes with what is essentially a business decision. Be ready for a lot of different reactions from those who leave gracefully to those who scream and cry. Stay calm and reiterate that the decision is a business decision and not a personal decision. Have empathy for their reaction, whatever it is. Offer assistance and guidance and please don’t frog march them from the building with their belongings in a cardboard box. When the process is done with understanding and open communication you can expect a more pleasant departure which is not just good for them and you, but everyone in your team.

Goodwill flows

When you start hiring staff you quickly have to get used to the fact that those same staff will one day leave. When you accept this and allow those people to explore other roles and even careers you leave a trail of goodwill. That goodwill always comes back to you. So whatever happens with your staff, aim to make all endings as happy as possible. While it may not feel so happy at the time, on reflection a lot of people will be able to look back and think well of you for handling them with care and nudging them along to find something that actually makes them far happier.

If you’ve got issues in your business you don’t seem to be able to get on top of, why not get in touch? Not only do we provide a full suite of bookkeeping and tax services here at Generate, but we’re also able to help with business coaching, strategy workshops, business plans and much more. You name the problem and I’m sure we can help.