Firing/Laying Off Employees as a Small Business Owner

Paper stating You are fired

You CAN “fire” employees with compassion.

I have had experience “letting go” of employees for a variety of reasons
including lay-offs and poor performance. Here are three suggestions to
handle this with grace, dignity, and compassion:

.. Figure out who you will let go and
inform them:

.. First and foremost, if you believe you will need to let go of a
few employees due to a drop in revenues, cash flow restrictions, or other
business performance-related issue, figure out who you will let go and
inform them as soon as possible. When companies are not performing well,
word starts to spread, rumors begin to circulate, and employees get
extremely nervous. Employees worry about job security, what they will do
next, and much more. If the rumors swirl for too long, employee performance
and morale will plummet. After you speak to the employees you will release,
have a company meeting and let everyone know what happened and why. This
way, you quash the gossip, provide transparent information, and stop
remaining employees from wondering if they are next on the chopping block.

.. For employees that you are laying off:

Explain to each employee individually in a sit-down, face-to-face meeting why you must let him or her go. Focus on how well he or she performed his or her job but stress the fact that the company must reduce expenses and conserve cash by eliminating the position. Also share with the employee what has led to the company’s poor performance, including mistakes you may have made as the owner. If you want
to hire back the employee when things improve, share that with the employee
along with your plan for improvement. Be honest. You do not want an employee
hanging on to hope of returning when the likelihood is only 20%.

.. For employees that you are firing due to non-performance:

Sit down with the employee face-to-face. (You must have a documented record of poor performance, corrective actions, and coaching sessions with the employee,
otherwise you will open yourself to a wrongful termination suit.) Briefly
share with them the history of subpar performance, corrections and coaching.
The purpose is not to beat up the employee but to help him or her understand
why he or she is being fired. Explain what your expectations are for all
employees, for that position, and that your company and the employee are
just not a good fit because the employee could not meet the expectations.
Also explain that it could be a cultural mis-fit or a job mis-fit. Perhaps
the employee would perform better in a more /less structured environment
(depending on your company) or in a different position or role that your
company does not currently have. Focus on the lack of fit and not on the
person’s shortcomings because everyone is good at something. They just may
not know what yet!