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How to Fire an Employee (The Right Way)

By Townes Haas   |    July 1, 2019   |    1:02 PM

The Entrepreneur’s Guide to Firing Employees Gracefully

Firing an employee or independent contractor is a nightmare scenario for many business owners. But, sometimes you need to let people go in order to grow the company. 

Fortunately, there are ways to terminate someone’s employment with grace and tact. The next time you need to terminate an employee, follow these guidelines when delivering the bad news.

Give the employee a chance to correct themselves

If poor performance is a factor in your firing decision, give the employee an opportunity to make things right. No one appreciates being blindsided, so provide feedback and coaching through informal meetings and formal performance reviews. 

Check employment laws in your state

Most states allow employers to employ workers “at-will,” which means the employee can be fired at any time, with or without cause. The law also allows employees to leave their jobs at any time, with or without reason. Limitations do exist, however.

Different rules apply if the employee was hired under a contract. In these cases, the written contract will outline specific reasons an employee can be terminated. Employers must abide by the stipulations (or risk legal troubles.) 

When possible, create a transition plan

Once you decide someone needs to exit the company, begin thinking about a transition plan. Answer questions like:

  • When will I fire this person? (Monday or Friday, morning or afternoon?)
  • How long will it take to hire a new employee?
  • Who will take over their duties until we find a replacement?
  • Is this person performing any duties that are no longer essential?

Of course, planning isn’t possible when an employee does something that requires immediate termination. In the event of theft, fraud, or a similar offense, aim to create a transition plan as soon as possible.

Always fire an employee in person

Firing someone is always going to be uncomfortable for everyone involved, no matter how the news gets delivered. Sending an email or doing it over the phone might sound easier, but having a face-to-face conversation is the most respectful way to fire someone.

Be clear about what’s happening

This isn’t the time to beat around the bush. Sit the employee down, explain that you have some bad news, and share a few sentences about why their employment is being terminated. 

Make sure you have answers to their most likely questions, too. They’ll need to know about things like a final paycheck, continuation of health insurance, their final date of employment, and similarly important details. 

Brace yourself for a range of emotions

When someone loses their job, they might feel shocked, hurt, angry, betrayed, or upset. You can’t predict how your employee will take the news, but it helps to be prepared for a wide range of possible reactions. 

No matter how the person reacts, keep your own emotions calm and collected.

Be honest with your remaining employees

When a coworker is let go, the rest of the team needs to know (especially if their workload will change.) If layoffs or other big organizational changes are forthcoming, it’s even more important to keep the lines of communication open and honest