By Mike and Blake DuBose
The DuBose Family of Companies
Employee terminations can be gut-wrenching nightmares for all parties involved. They bring out strong feelings, and the trauma is amplified when leaders have emotional attachments to the people being let go. Over time, all leaders will have to fire or lay off someone they care about. Although difficult, it’s often an unavoidable part of running successful businesses. As Andrew Hoffman noted in Harvard Business Review, “You’re severing a relationship and creating hardship for someone. But you have to look at why you are doing it, how you are doing it, and what you are creating in the process.”
In Good to Great, Jim Collins advised screening job applicants intensely to find outstanding people and assigning them to positions in which they can excel. However, all leaders make hiring mistakes. Sometimes, people simply don’t meet performance expectations or mesh with the company culture. Continuing to employ such individuals diminishes the team’s productivity and enthusiasm, and it may eventually push high-performing staff to resign. Despite this knowledge, many managers struggle with terminating employees, often blinded by their guilt, denial, relationships, and rationalizations.
Layoffs may be financially driven, or an individual’s continued employment may not line up with future strategic initiatives. Many people also “fire themselves” through bad behavior and poor performance. Either way, it’s important to act promptly. Dragging out the process causes harm to organizations and staff.
To make terminations as painless as possible for the company, its decision-makers, and the affected employees, it’s vital to “prepare to fire before you hire.” Without the proper procedures in place, you could expose the organization to lawsuits, and legal expenses could threaten even more jobs!
Here are some hard-earned tips based on our experiences:
• Don’t hire friends or relatives: We have employed friends with whom we later had to part ways. Even though we had good reasons, treated them with compassion, provided severance pay, and helped them find employment, they still claimed we were unfair. It hurts!
• Maintain emotional distance: As a leader, your top priorities should be company survival and prosperity. While it’s important to be caring, be wary of building close friendships that may cloud your objectivity when protecting company interests.
• Obtain signed employment agreements: Our agreement defines “at-will” employment and includes language protecting our intellectual property, strategies, and business relationships (through non-solicitation and non-competition clauses). Utilize human resource experts or employment lawyers when crafting or updating these documents, since laws change frequently. Companies should also clearly explain policies in an employee handbook and have each staff member sign a document acknowledging that they have read and agree to it.
• Avoid verbal commitments: Always speak as though everything is on the record, and never promise things you’re not sure you can deliver. Anything that could be interpreted as assuring job security can land you in court (or at least cause resentment).
• Give ongoing written feedback: Address inappropriate employee behavior or performance issues as problems arise, especially when patterns develop. Any time you must counsel employees, place dated, detailed notes in their personnel files as clear documentation for future reference.
• Follow appropriate remediation plans: If employee performance or behavior issues escalate, follow the proper steps and continue documenting facts. Meet with the person to define expectations and have both parties sign documentation for personnel files. Follow up to verify progress or failure to meet the agreed-upon goals. If remediation plans are unsuccessful and termination is necessary, following the proper steps and maintaining detailed documentation can help you avoid EEOC claims or other court battles. It is always a good idea to consult human resource experts for advice throughout the process. Our co-employer, Insperity, has been a great asset for personnel issues!
• Put your “president’s hat” on: Effective leaders must act without emotion to factually assess their organizations’ needs, determine the talents required, and direct revenues to support critical expenses. This sometimes requires eliminating positions, altering staff roles, or utilizing outside contractors.
• Rank talent: When budget shortfalls are likely, prioritize employees in order of value to the organization, company culture fit, and productivity. This gives decision makers objective information on which to base layoffs.
• Gather information: When someone is being considered for layoff or termination, use your written records to carefully assemble a document outlining the reasons for dismissal.
• Make prompt decisions: Once you have gathered all the facts, obtain input from relevant company leaders and decide your course of action. Don’t be rash, but avoid delays if you know what needs to be done. You’ll always have some doubts, and procrastinating will make things harder on you emotionally.
• Develop termination plans: Once your decision is made, think about the termination from a place of compassion. Plan it in a way that will allow the person to leave with dignity. There is no ideal day to schedule termination meetings, but we recommend having them late in the afternoon when fewer people are present. Develop a detailed but succinct script for your discussion, listing your points so you don’t get emotional and forget during the actual event. If multiple positions will be affected, schedule all terminations in one day rather than in waves.
• Be clear but compassionate: Ask a third party (ideally, the employee’s manager) to accompany the human resources director at all termination meetings. After calling the employee in, calmly but kindly explain that you’re ending their employment, the reasoning behind the decision, and what they can expect moving forward (provide the employee with a copy of your points). Once finished, open the floor to questions, but don’t argue or allow the situation to escalate. Whenever possible, allow them to leave quietly and return after hours to clean out their desks (with a witness present). Shut down terminated individuals’ access to company computer systems and the facility, but let them to come back the next day and say goodbye to their former co-workers. To maintain high morale, it’s important to not discuss confidential details with other staff, but you should alert them of terminations in a sensitive manner.
• Provide severance and support: If financially possible, offer severance agreements giving employees transition pay while they seek other employment. For liability reasons, be careful about providing too much information about their performance to potential future employers, but help as much as possible.
The bottom line: There’s nothing enjoyable about employee terminations. Do your best to balance the individual’s interests and the company’s security and make prompt decisions. If you’ve adequately prepared, the process will be less painful, and you and the affected individuals can hopefully all move on. Remember, the sun will rise again the next day!
About the Authors: Our corporate and personal purpose is to “create opportunities to improve lives” by sharing our knowledge, research, experiences, successes, and mistakes.
Mike DuBose received his graduate degree from USC, has been in business since 1981, and authored The Art of Building a Great Business. He owns Columbia Conference Center, Research Associates, DuBose Fitness Center, and The Evaluation Group. His nonprofit website, www.mikedubose.com
, features a free copy of his book; published business, travel, and personal articles; and health articles written with Dr. Surb Guram, MD.
Blake DuBose graduated from Newberry College Schools of Business and Psychology. He is president of DuBose Web Group (www.duboseweb.com)
Katie Beck serves as director of communications for the DuBose Family of Companies. She graduated from the USC School of Journalism and Honors College.