Letting an employee go has always been my least favorite part of being a manager. I’ve been doing it for over 25 years, so it has gotten easier over time. My secret: preparation.
To help you be just as prepared, I turned to David Dodson, the author of The Manager’s Handbook: Five Simple Steps to Build a Team, Stay Focused, Make Better Decisions, and Crush Your Competition, for a step-by-step guide to terminating an employee.
It’s a reflection of our humanity that we postpone telling someone devastating news. But as Debra L. Dunn, vice president of strategy and corporate operations at Hewlett-Packard, explains, “There is no greater disrespect you can do to a person than to let them hang out in a job where they are not respected by their peers, not viewed as successful, and probably losing their self-esteem. To do that under the guise of respect for people is, to me, ridiculous.”
For the same reason we postpone our decision, we often botch the process by trying to make it not hurt. And just like with our romantic break-ups, trying to make it easy on the other person almost always makes it harder for them.
Making the decision
Most of us postpone the decision, hoping a more convenient time will come. In the short term, there is almost never a convenient time to dismiss an employee. A vacancy means additional workload for the remaining team, hiring a replacement, and a new onboarding process—all time-consuming. Yet, none of your problems will go away by procrastinating, and these are small prices to pay for the benefit of having the right long-term team in place.
Making the decision is tough, but it’s likely necessary to ask someone to leave if they fail these four questions:
- Left brain check: Ranking your team A, B, or C, where does this person come out?
- Right brain check: If the person came into your office and resigned for a great opportunity and provided a smooth transition, would you be relieved, neutral, or devastated?
- In 3 years: Does this person have a place here in three years?
- Would you rehire: If you were filling a vacancy, would you hire this person for the same position for 125% of their current salary?
When an employment relationship does not work out, the employer and the employee generally share some responsibility. While you don’t owe anyone a forever job in a position they are not succeeding in, you owe them a fair and benevolent transition to their next position.
Preparation is compassion
Since the person you’re about to dismiss will likely be overwhelmed and may forget the details, provide them with a written explanation of the consequences of their departure to these programs. If they are required to execute any paperwork, have the documents prepared in advance, filling in whatever you can for them.
Financial: Begin your preparation by determining what the employee is owed financially. You’ll probably need to offer COBRA benefits. Ensure they know about this program and prepare the paperwork, along with a simple explanation. If your company offers profit sharing, retirement plans, or ownership programs, familiarize yourself with the key terms.
If you’re paying severance, it is your responsibility to design a package that is reasonable. I recommend you offer a generous sum that any reasonable employee would accept. That will help you avoid future litigation, ensure a smooth process, and eliminate the wear and tear on you and the organization if you were to find yourself in a dispute or stressful back-and-forth negotiation.
You may want to offer outplacement services. If so, have the details prepared, including contact information and the steps for employees to access the service.
Company confidential: Consider access and retention of confidential company information prior to the meeting.
Tell as few people as possible, as late in the process as possible, and only on a need-to-know basis. You don’t want to unnecessarily ask people to keep secrets, and letting people find out indirectly that they’re about to lose their job contradicts the values you’re communicating as a leader.
Decide if you’d be willing to provide a job recommendation. Just because one person doesn’t belong on your bus, that doesn’t mean they can’t find the right bus for them.
Breaking up is hard to do
If you are kindhearted, there is no way to make terminating an employee easy. This is why struggling to knit the precise words together so that it won’t be painful is unrealistic and will generally make things worse.
Directness is kindness. The meeting should last less than 10 minutes. Avoid opening with small talk; the person will see from your face that bad news is coming, and any delay only increases the awkwardness and discomfort.
You may be tempted to justify your decision or to get the other person to agree with you—especially if they press you for the reasons behind your decision. That will often turn into a debate, and before you know it, you will find yourself making a stronger and stronger case for their deficiencies, leaving that person feeling miserable and broken. It might seem unfair not to explain the specifics behind your choice. Still, the person has been handed terrible news, and their mind is flooded with emotions, possibly anger, embarrassment, and resentment. They’re in no mental state to digest performance feedback.
Avoid any version of, “This is also hard for me,” “I hope you can understand,” or “I’d like to remain friends,” which many of us have tried unsuccessfully in romantic break-ups and are no more effective in a workplace break-up. Those pleas are about assuaging your feelings of guilt. But this moment is not about you; you must accept the consequences of leadership and the hard stuff that comes with a commitment to building a great team.
If they press you for more information, return to the phrase: “The purpose of this meeting is to go over the terms of your separation,” and repeat the offer to have a separate meeting. If they insist you’re not being fair by not going into the details, stay firm, knowing you’re showing them compassion and kindness by not going into the specifics in that meeting. Then move to the details of the separation agreement.
Take personal responsibility for the decision rather than spreading responsibility to others. Don’t deflect onto your boss, the owners, the board of directors, or any other constituent. You made the decision; you need to own it.
Logistics
Experienced managers have different opinions on the best day of the week to have the meeting. I prefer Fridays, which gives the employee the weekend to process the information.
Try to meet in a windowless office or conference room to avoid the chance of other employees observing what should be a private meeting.
Be prepared for various emotional responses. Breakdowns happen. Have a bottle of water and tissues available. If someone is overcome, consider an excuse to leave the room for a few minutes to allow them to regroup in private and regain their dignity.
The end of the day is the best time to have the meeting, ideally after as many coworkers as possible have gone home. The walk out of the building is upsetting and possibly embarrassing, and the fewer people they must see or speak with, the better.
In extraordinary situations, employees may become disruptive. If this happens, gracefully accelerate their departure but avoid an escalation—even if it allows them more time to say and act negatively.
Communication with their team
Limit comments to the remaining team on what they need to know to resume work. This preserves the privacy of the most impacted person and reassures your team that if the situation were reversed, they would not become the subject of gossip.
Don’t wait for them to request answers to questions about what comes next. Doing so leaves the remaining team to reach their own conclusions, detracting from your brand as a manager. They want to know that you have a thoughtful plan and that the company’s future is secure.
Building a great team requires intentional build-out
Before teaching at Stanford, Joel Peterson had run the world’s largest real estate firm; when he wasn’t teaching at Stanford, he was busy as JetBlue’s chairman and founding investor. For years, Joel and I taught a course together, and one lesson I learned from Joel was that letting people go is part of a leader’s job description. As Joel puts it: “The best leaders are just as good at removing people from jobs for which they’re unsuited as they are at putting rising stars into the right positions. It isn’t possible to be error-free in hiring—and even if it were, organizations change, roles shift, and you may find that even highly skilled employees can’t adapt.”
If you want to build a great team, there is no getting around this aspect of your job description. Anyone who tells me they have never let someone go isn’t showing evidence of superhuman hiring ability but a lack of commitment to building a winning team. If you’re committed to excellent leadership, you’ll have to accept this unpleasant aspect of the job of a manager.
David Dodson is the author of The Manager’s Handbook: Five Simple Steps to Build a Team, Stay Focused, Make Better Decisions, and Crush Your Competition. He is a former CEO and currently a lecturer at Stanford Graduate School of Business.
Excerpt has been edited and published with permission from The Manager’s Handbook: Five Simple Steps to Build a Team, Stay Focused, Make Better Decisions, and Crush Your Competition (Wiley) by David Dodson. Copyright © 2023 by David Dodson. All rights reserved. This book is available wherever books and eBooks are sold.