How to fire an employee gracefully: 5 ways to do it right

how to fire an employee

When you’re in a new relationship, you’re filled with enthusiasm, making plans for your future together. You certainly don’t think about the moment you’ll break up. Likewise, when you hire an employee, you’re excited to start working with them; you don’t think you might fire them one day. Yet, it could happen.

And when it does happen, you want to make sure you end things on good terms. Surely, no one likes breakups, but sometimes it’s exactly what you need to do – so that you keep your business productive and your workplace healthy.

Still, you probably dread that moment when you’ll say to your soon-to-be ex-employee: ‘You’re fired’; even when you know that this is what needs to be done. But you also don’t want to fall into the trap of getting it over with as soon as possible. A poorly prepared and poorly executed layoff could cause you even more troubles. And in case of large-scale layoffs, problems could escalate quickly.

Let’s see what might go wrong when you’re firing an employee (we shall call him Joe) and what you can do instead, to avoid those issues.

Disclaimer: This is not a legal document, nor do we provide legal advice. We’re discussing some ideas on how to make an employee termination more humane. Also, the following scenarios describe situations where employees are fired due to performance issues, poor culture fit, changes in the organizational chart, etc. We are not talking about severe cases where employees should be immediately terminated, like, for example, when they violate the law, harass their coworkers or break your company’s code of conduct.

Scenario 1: When you use the element of surprise

It’s a typical day. Joe is going to work and during commute, he’s quickly thinking what kind of tasks he has to finish today. “But, first, some coffee in the kitchen with Claire and Bill,” he thinks to himself. But unbeknownst to Joe, today won’t be a typical day. As soon as he arrives at the office, his boss is waiting for him and asks to go to a meeting room. The HR manager is also waiting for them in that room. “I’m sorry, Joe, this isn’t working,” his boss goes straight to the point, “your performance has significantly decreased over the past few months, so, unfortunately, we’ll have to let you go. Nadia from HR will help you with the paperwork.”

Boom! Joe can barely speak. His performance has decreased? How? When? Why has his boss never mentioned that before? In fact, how is this possible to fire him when he has only received positive feedback for his work?

As these questions keep running around his head, Joe gets really mad. Heavy breath, grinding teeth, sweaty fists; before he even realizes it, Joe starts yelling ‘This is ridiculous!’ and storms out.

They might manage to calm him down or escort him outside the building (with or without the help of the security guards), but they can’t stop him from posting negative reviews online and sharing this awful experience offline with his network.

Tip: The moment you fire them, shouldn’t be the first time that employees hear about their poor performance. Managers and team members should have regular 1:1s where they discuss projects and work progress. And regular performance reviews are good opportunities to set short-term and long-term goals (e.g. number of new deals closed or time-to-finish one project) and elaborate on what’s working and what could be improved.

If there are specific issues with an employee’s performance or behavior at work, speak to them before it’s too late. If necessary, you can implement a Performance Improvement Plan (PIP), so you can work together and fix the issues that have arisen. This will give them the chance to improve themselves and you’ll be able to keep them, instead of spending even more money and time to replace them. Or, at a minimum, if there are no significant improvements, they won’t react extremely when you make your announcement.

Also, when you fire an employee, it’s a good idea to give them specific reasons that justify your decision. For example, “In the past three months, you haven’t reached your sales quota, despite the additional training.” Or, “At least 15 days this year, you showed up at work with more than an hour delay without explaining why.” Those points prove that your decision to fire an employee is based on objective criteria, that they were already aware of, and not on personal differences or wrongful treatment.

Scenario 2: When you forget about legal implications

It’s been a week since you’ve fired Joe, when you receive a lawsuit. You’ve been accused of age discrimination. This was definitely not the case, but considering you don’t have documentation in place that proves why you fired Joe and what steps you took prior to that decision, you could be in trouble.

Even if it all ends with no collateral damage for you, you don’t want to put your company’s reputation at risk. There are specific regulations that protect employees (e.g. during maternity or sick leave) and employment terms that protect you. For example, are you sure that Joe, feeling bitter after the termination, won’t go and work for your competitor disclosing sensitive information?

Tip: Review labor legislation when you hire and when you fire employees. If necessary, consult a lawyer who’ll give you proper guidance on how to fire an employee legally. Also, make sure that your employment contracts protect you from losing company assets, sensitive business information and your customers’ details.

Once you take the decision to fire an employee, you should get prepared for next steps, too. When you share the news with them, have the necessary termination paperwork ready for them to review and sign. This could include their final paycheck, a severance pay and any unemployment benefits they’re eligible for.

Scenario 3: When you’re not clear that this is a termination

Fast-forward to a few months later. This time, you’re facing some issues with another employee. Let’s call her Dorine. She’s a very nice person, but fails to handle her job duties effectively. You’ve learned your lesson with Joe, though, so you’ve thought about how to fire someone nicely. You decided to break the news more smoothly. In fact, you did it so smoothly, that Dorine didn’t realize she got fired.

She thinks that this is a simple reprimand for her poor performance. She also thinks that you prompted her to take the day off, since she got upset. So, the next morning, Dorine is back in the office. And you’re in an even more difficult position because now you have to really explain to her what’s going on.

Tip: Yes, firing someone will never be fun and it could get particularly difficult when they’re genuinely nice and you have a good working relationship with them. That’s why the rip-the-band-aid-off approach is probably your best option. There’s no point in sugarcoating a termination; you both know it’s not pleasant, so it’s best to be transparent. If you struggle with what to say when terminating an employee, it’s best to prepare yourself before meeting them. You don’t need to have a ‘how to fire an employee ‘script in place, but try to explain your decision as clearly as possible and make sure there are no misunderstandings before you end this meeting. Describe next steps and offer some help with packing their stuff.

There are things you can do before you get to the point of having to fire someone. Whether there’s a performance or behavior issue, set formal meetings to discuss what’s happening and give them a formal warning notice when they don’t discipline. If the termination comes as a result of internal, org changes, have a discussion with them and see whether they’re interested in another role within the company or, if that’s not possible, give them some notice so that they could start searching for a new job before leaving from yours.

Scenario 4: When you’re brusque with the laid-off employee

Being soft with Dorine didn’t work, so now you have to be straightforward. Out of fear that she won’t get the message again, you end up being too straightforward, though. You list all the things that she did wrong in the past four years that she has been working with you.

Just to be on the safe side, you even invite in your office two colleagues and ask them to confirm your claims. Now Dorine has to face three people telling her – more or less – how awful an employee she is. And just like Joe, she’s at a shock. Not only she loses her job, but she also loses her confidence and her gratitude about what she accomplished with her colleagues.

If she’s now feeling devastated, soon she’ll put the blame on you. She couldn’t have done everything wrong; it must have been your fault too. You’re after all the manager who has more experience and should have coached yer. It’s the company that should have onboarded her better or trained her to help her build up her skills. And just as the bitterness for this termination will grow, Dorine will share her experience with others too. And she’ll try to discourage them from applying at your company, ultimately hurting your employer brand.

Tip: When you’re firing an employee, you’re in an uncomfortable position. But theirs is worse. You can replace them and move on. For them, though, it’s a bit more complicated as they have to look for a new job so that they don’t face any financial issues. They might even have to explain to their potential employers why they stopped working at your company.

There may not be a best way to terminate an employee, but you can start by showing some empathy. Post-firing relationship needn’t be a bad one. They might not be a good fit for this particular role, but this doesn’t mean they’re not good professionals. If possible, offer a generous severance package or a recommendation letter. End things on good terms by showing that you appreciate their good work. After all, as in most break ups, it’s not always only one part who’s at fault.

Scenario 5: When you leave your remaining staff in the dark

Joe is gone. Dorine is gone. But all of the other employees are here. And they’re wondering what happened. Water-cooler discussions suddenly take longer. Gossip is all around – and most of it is far from the truth.

“I heard that Joe was stealing.” “I heard that Dorine was in a relationship with her manager.” And worst of all: “Who do you think will be the next one?”

Tip: In some cases, you can’t disclose the entire reasoning behind a termination, particularly when there are sensitive, personal issues. But you shouldn’t leave your team members guess if they’re going to be the next ones to get fired. Job insecurity decreases morale and you might even lose some of your best employees if they start looking for a new job fearing that they might lose their own.

Be honest about what happened and be there to answer questions. Also, reassure them that this is not a case of mass layoffs. But don’t think that there’ll be no talk at all – employees understand how businesses work but it’s normal that they need some time to process the news. If your former employee is also ok with that, share with your staff their contact details. They’ll likely want to reach out and stay in touch.

The anti-firing scenario: When you don’t fire your employees no matter what

Firing an employee should be the last threshold. But, sometimes, it’s inevitable. Otherwise, you risk losing great employees who can’t stand a toxic work environment. Or, you risk burning out employees who take up the slack when others are under-performing.

Tip: Be cautious, not only when you fire, but also when you hire. Design your recruitment process in a way that you can make objective and well-rounded decisions. This way, you’ll select people who are skilled and motivated, respect your company values and, hopefully, will stay with you in the long-run so you can all live happily ever after.

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