Step 1. Look In The Mirror.
You (or your company) hired this person. If you’re ready to fire this person now, what hiring mistake did you make to put you in this position down the line? How can you avoid it in the future? Did you hire too quickly? Perhaps you hired the cheapest, least experienced candidate? Did you hire your girlfriend or boyfriend? Was the job description vague and not in writing? Did you not give the hire constructive feedback, early and often? Does your company not have an Employee Handbook that outlines your progressive discipline policy? If the answer to any of these questions is “yes,” you need to accept that this is 100% your fault. Accepting responsibility for making a bad hire or keeping a bad employee on the payroll for too long is the first step to fixing the problem. Lucas La Tour, a startup founder, says, “Early on in a startup, sometimes it feels like you’re on your own. With little capital and minimal traction, there can be a tendency to take every person that wants to support your dream or vision and let them join. Don’t do it.”
Step 2. Review Performance.
Step away from the mirror and review your written record of the employee’s performance. See if it meets the standards you have set out in your company’s Employee Handbook. Try to look at the situation objectively, ignoring any personal feelings you have about the situation and the person. Often, entrepreneurs either love or feel betrayed by early employees. This is because being a startup founder is very hard, and there’s tremendous pressure to be successful. With pressure and success come problems. Whenever possible, and as long as the employee’s continued employment isn’t harming your company, rather than terminating right away, give your employee a verbal or written warning. This warning should be in accordance with your Employee Handbook. Following a structured disciplinary policy will protect you from expensive wrongful termination claims. Always have a second person there with you, if possible, when issuing a verbal warning. La Tour says, “I typically try to establish a culture around personal growth and development. Constant training and [firm] leadership is necessary, and establishing processes for improvement and feedback on a regular basis is critical. Then, if there are issues that still persist, other questions start to come up about whether there’s something is objectively off. In my own experience, this can take a tremendous amount of time and energy.”
Step 3. Issue a Warning.
If the employee is still not meeting performance expectations, issue a written warning in accordance with your disciplinary policy, as outlined in your handbook. It doesn’t need to be very long, but it should include a plan for improvement. Both the employee and the manager would need to sign this document. Here’s a sample written warning: This written warning is intended to clearly articulate performance deficiencies and expectations, as well as the type of improvements you will be required to demonstrate going forward. It also details the support you will receive and the consequences if you fail to meet and maintain expectations. SPECIFIC ACTION, BEHAVIOR, AND OR SITUATION: [Here you would describe what’s happening now that isn’t meeting your expectations.] EXPECTED PERFORMANCE AND/OR BEHAVIORS AND ACTION PLAN: [Here you would describe how you expect the employee to act/do differently.] TIME FRAME: Any further incidents including, but not limited to, issues noted above that are not resolved within thirty (30) days may result in further disciplinary action, up to and including termination. However, we reserve the right to take additional action with respect to your employment, including termination, prior to the completion of the time period stated above. Upon successful completion of the notice, you will be expected to maintain satisfactory performance in all areas. If you fail to do so, you will be subject to further disciplinary action, up to and including termination, without additional warning periods. Please also note, any employee who receives a written performance warning is placed on probation for the following 30 day period. That employee is not eligible to take part in [list any perks here you want to take away during a probation period.]
Step 4. Terminate.
Do not keep a bad hire around for longer than absolutely necessary. If their performance hasn’t improved, there isn’t any legal minimum period in the State of New York between a written warning and a termination. Knowing exactly how to fire in your jurisdiction is very important. New York, like many other jurisdictions, is an “employment-at-will” state. This means that either the employer or the employee could terminate their business relationship for any reason or no reason at all, at any time, unless a law or agreement provides otherwise. Having an under-performing employee around is also bad for your good employees. It shows them you tolerate bad behavior and mediocrity. It builds resentment and disrespect toward you and your company. Ask yourself what behaviors you want to see in your team, make sure they know what behaviors you expect, and coach people who are underperforming sooner rather than later. If you’re not an attorney, always have a second person there with you, if possible, when having a termination conversation. Keep this conversation short. Here you’re not looking for the employee to give you the 50 reasons why they did a good job or should be given another chance. The time for that has come and gone. Notice how there are no questions here in the sample talk track below. “We appreciate all the work you did for [insert company name]. We have decided that it’s best to go our separate ways. Your last day will be [insert date here.] We wish you all the best in your future endeavors. As the next step, you’ll receive your next paycheck on the regularly scheduled payroll date.”
Step 5. Reflect and Improve.
This and Step 1 are the most important – reflect on what went wrong here. Yes, you can always hire an attorney to fix a bad employment situation, but it’s much cheaper, easier and less stressful to set up good and effective recruiting, onboarding, and termination process in the first place, so you’re fixing things at the business stage before it gets to the legal stage. These are the documents and processes you should have so that your employees have the maximum chance of success:
- A written step-by-step hiring process that you always follow, no matter what.
- A written job description.
- An employee handbook.
- An offer letter/employment contract.
- Form W-4: Employee’s Withholding Allowance Certificate.