I hate firing people. The last thing I want is to be responsible for stopping someone's income. But it has to be done from time to time. Keeping someone who performs poorly or doesn't fit into your company culture is unfair to you the business owner, the employee who needs to go (who might find a job that suits him or her better elsewhere) and to the other members of your Team.
It still stresses me every time I have to do it, but I don't ever hesitate in firing someone if they've shown that they need to go. So here are my tips for doing the ugly deed:
1) As a general rule, hire slowly and fire fast:
At Falak it takes us up to 10 interviews or more just to hire one person. We hire based on two criteria. First, the candidate has to have the technical skills to do the job, and second, he or she must fit into our company culture. If the hire proves to be a mismatch, we act fast and ask them to leave before they can demotivate or infect the rest of the Team. Like I said, it's unfair to all if you have someone who does not really belong on your Team.
2) Offer an honourable exit:
I don't want you to misunderstand. Acting fast does not mean acting ruthlessly. Be compassionate; whenever I've fired, I've tried to do it in a dignified manner as possible for the person being let go. The pain of being fired is bad enough, the last thing you want is to add insult to injury by insulting the person. I'll often - but not always - give the Team Member being fired two options. They can either accept a letter of termination or give us a resignation letter. Invariably they choose the latter option. When the deed is done, I give them a handshake and wish them all the best.
3) The firing should never come as a surprise:
I don't think I've ever let someone go who did not see it coming. You should have a system of verbal and written warnings which lead to termination. Often a Team Member will resign before it comes to the final step of termination. It goes without saying that you should follow the relevant labour law in your country.
4) Have a paper trail:
Many years ago when I ran a martial arts school I fired a terrible Team Member who did nothing but lie and take advantage of my kindness (i.e. naiveté). The next day I got a summons from the Ministry of Labour. When I went to explain my point of view the audacious former Team Member accused me of lying. I told the MoL rep that the former Team Member in fact was lying. The rep said to me "Okay, show me her file." Ah, what file ..? I did not keep Team Member files then, which was a big mistake. Now I make sure we have a proper paper trail that we can use if there was a legal need to.
I've seen this exercise done a couple of times in entrepreneurship seminars. The seminar leader will ask the group to raise their hands if they have someone on their team that needs to be fired. If shocks me how almost always more than half the room raise their hands.
Do you have someone that needs to go? What are you waiting for? Don't worry about the consequences. I don't think there ever was a business in history that had to close because they had to fire someone. No one -and I mean no one- is indispensable. You might suffer a bit in the short term, but in the long term you'll realise that that was one of the best decisions you've ever made. But remember to be compassionate!