Knowing When It’s Time to Let an Employee Go

By August 9, 2020September 4th, 2020Leadership
When to let an employee go

It’s an unpleasant task, but in the end, the company benefits

By Kimico Myers

Deciding whether or not to fire an employee is tough, and it’s something that many business owners like to avoid. As a small business owner, I have had to fire employees, and it wasn’t something that I enjoyed. I recall agonizing over the decision of what I should do. Ultimately, I understood the importance of having the right employees in place as a necessity for the success of my business.

But when is the right time to let an employee go? Jack Welch, the iconic former manager at General Electric, was well known for firing people. According to Welch, employees should be grouped into three sections:  the top 20%, the middle 70% and the bottom 10%.  He explained his “rank and yank” system this way:

“The middle 70 should be given coaching, training, and thoughtful goal-setting, with an eye toward giving them an opportunity to move into the top. Keeping them motivated is the most difficult part of the manager’s task. You do not want to lose the vast majority of your middle 70 — you want to improve them. As for the bottom 10 percent, there is no sugarcoating this, they have to go.”

I’m not sure if I would want to work in an environment like this one, but expectations are crystal clear: make your numbers, hit your goals or you’re fired – period.

If you don’t employ a “rank and yank” system at your business, then how do you decide when it’s time to let someone go? Here are several signs and behaviors that you should look out for:

  • Constant late arrival or absenteeism: Life happens. Unexpected events beyond our control will occur. However, employees who consistently call in for one reason or another – or simply don’t show up – end up costing your business money.
  • Argumentative: I highly encourage my employees to speak up and share their ideas and suggestions. But an employee who always start arguments with you and/or staff creates a stressful work environment that may result in other employees leaving the company.
  • Customer complaints: According to the White House Office of Consumer Affairs, a dissatisfied customer will tell 15 or more people about their bad experience with your business. Worse, only one in 25 of these customers will complain to you. The folks who don’t complain simply stop doing business with you.
  • Uncoachable attitude: Any employee who doesn’t care to better him or herself also won’t help you improve or grow your business.
  • Lying on multiple occasions: This speaks for itself.

If you notice one or more of these behaviors, it’s probably best to fire this employee sooner versus later. Once you’ve decided to fire the employee, do not procrastinate. By delaying, you risk second guessing yourself, and may make the mistake of keeping the person on. If you do decide to fire an employee, simply explain why you are letting them go and next steps. Don’t get into a back-and-forth because the employee will never agree with you regarding your reasons. An equally important step is talking with your remaining employees. It’s natural for folks to become afraid when someone is fired that their jobs may potentially be affected.

Firing an employee is one of the most difficult things that I have had to do as a business owner. However, at the end of the day, I have to do what is best for my business. This is the mindset that you, as a business owner, should also have. I understand that it can be tough, but making tough decisions comes with business ownership.

Kimico Myers is owner/president of the franchise TeamLogic IT – Columbia. He also serves as chair of the Midlands Chapter of the Service Core of Retired Executives (SCORE).