top view of a desk with a laptop, phone, globe and day planner

Firing an employee is one of the most difficult decisions you will ever have to make as a business owner. Someone may not be a good fit for your team or consistently exhibit poor performance. Whatever the reason may be for their termination, no one wants to be the bearer of bad news to tell someone they are being let go.

Despite how challenging firing an employee can be, these tips can help provide guidance to ensure the process goes as smoothly as possible for all parties involved.

Offer opportunities for improvement beforehand

When an issue arises with any aspect of an employee’s performance, chances are that a series of events led to you needing to make a tough call. This is why frequent check-ins and performance reviews at least twice a year can help you be transparent with your employees about their progress and where they can improve.

Unless an employee has committed a violation of your company policy, termination should always be used as a last resort. A performance improvement plan (PIP) can be used as a probationary period to help your employee meet goals they may be struggling to achieve or curtail poor workplace behaviors and document their progress.

You may also find it helpful to get perspective from other members of your team as to your employee’s performance – have there been frequent missed deadlines, projects that need rework, are they incapable of accepting feedback? Documenting other team members’ experiences can help strengthen your case for why an employee needs to improve or help bring underlying issues to the surface. A termination should not come as a surprise to anyone – you want to make sure you give your employee ample time to improve his or her performance.1

Have HR as a witness

When firing an employee, the three people in the room should be you, your employee, and a human resources representative. Someone from HR can help guarantee that employees are treated fairly during the termination, keep conversations on track, and act as a witness in the event that anything escalates, whether that be needing to call the police or if that employee sues your company for wrongful termination.2

Working with HR can also be beneficial to help you make sure you are being impartial and following proper procedures. As an employer, you are not allowed to fire anyone on the basis of age, race, religion, disability, national origin, or because someone is pregnant or about to take medical leave. HR can help you determine if your reasons for termination blur any of these lines.3

Meet face-to-face

Being terminated can be a very emotional experience. No matter what the reason for needing to fire your employee may be, they deserve a face-to-face meeting to hear the news. That means that your employee should not be informed of your decision via email, voicemail, text message, or phone call. If it is not possible to meet in person due to COVID-19 restrictions, or if they are a freelancer or contractor, a video meeting would be the next best option.

Once you have broken the news, be sure to stay in the room or on the video call. Prepare yourself with specific instances that led to your decision and have answers to questions that may arise about severance, the final paycheck, unused vacation time, retirement plans, or health insurance coverage.

Keep it clear, short, and professional

You’ll want to make sure that the conversation you have with your employee is clear and to the point. Don’t begin the meeting with any small talk – you don’t want the mood to start on a casual note and then catch your employee off-guard with the unfortunate news. Additionally, don’t give any indication that the decision is not final – make sure your employee leaves with a concrete understanding as to why he or she is being let go and what factors led to the decision.

It may be possible that you don’t necessarily want to terminate an employee because you like them, but that person is hindering company growth and success. There may be a chance that while this is difficult news for your employee to hear, it’s equally as difficult for you to deliver. Even if that’s the case, it’s important to make sure that you maintain your composure and remain professional, no matter how challenging it may be. You want to convey to everyone - not just the person you are letting go – that you respect your employees on a personal level. Offer compassion, feedback, and your best wishes.4

Before the employee leaves the building

Once your employee has learned of the termination and has no further questions, he or she must leave the building. Depending on company policy, security may need to escort the person out, but if you don’t feel that is necessary, it’s fine to let them leave on their own or walk them out yourself. Be sure that they return all company property before they leave – that includes any IDs, keys, computers, phones, or other equipment. You may choose to stay with your employee as they pack up personal belongings from their desk or have their box packed up while they are being told the news, but you can also agree to make arrangements for them to collect what they’ve left behind at another time.5

Be sure to deactivate the former employee’s access to information systems or change passwords as soon as possible to prevent retaliation or other business issues.

Lastly, your employee may want to say a final goodbye to everyone. Use your best judgment; it is permissible as long as it is kept short and professional.

Tell your team the news

To relieve your former employee of any embarrassment or discomfort as they gather their personal belongings to leave, you may want to make sure that the rest of your team is not present when they do so. You may want to call a meeting for all other employees during this time, or schedule the termination when most people will not be around, like the beginning of the day, lunchtime, or the end of the day.

Once the terminated employee has left the building, be sure to tell the rest of the team the news. Be straightforward but do not offer any details behind why they were let go. Because people may begin to wonder if their jobs are at stake, it’s okay to be honest with them that the employee was fired but you want to respect his or her privacy. Be open with your team about if they will need to cover this person’s responsibilities and any other work-related questions they may have.2

Prepare for the future

After the termination is behind you, you may need to backfill the position, or divide tasks among the rest of the team. Acknowledge what went wrong during that employee’s tenure – for example, were they not a good fit from the beginning, could they handle some responsibilities but not others? By answering these questions, you can help determine what you need in this position and your team for the future, and take the steps to get there. The Nationwide Business Solutions Center can be an additional resource to answer other small business questions and help you move forward.

Small Business Icon
Learn more about Nationwide business insurance Talk to a specialist