ON FIRING EMPLOYEES....

Recently, I was asked to speak at the Global Founder’s Institute (http://www.founderinstitute.com/) event in Singapore next Tuesday. The topic they asked me to speak about is, “Best Practices around Firing Staff.”

In preparation for that, I decided to write my thoughts down and solicit feedback before I go in front of the crowd.

1. SCOPING THE DIALOG
After some thought, I decided that there are really 3 circumstances under which you swing the axe.

Firing due to performance gaps
Firing due to contractual breaches
Retrenchment due to the economy or changes in the business strategy

I decided that I’d look only at the first topic, since I only have 20 minutes to speak and because I think that Firing due to Performance Gaps is typically the hardest for both entrepreneurs and corporate managers to deal with.

2. GUIDING PRINCIPLE
Although there are some good best practices to apply in the process of giving someone the boot, I wanted to highlight one Jack Welshism that I think should govern the whole activity.

Everyone is a star in ‘some’ role. If your employee is not a star in the role she is in, it is your responsibility to help her move upward and outward in search of that role. Failing to fire only distracts them from discovering their own potential. Holding on to a low performer also dishonours the employees on your team who are kicking butt.

OK...I realise that this has a slight flavour of capitalistic brainwashing...but there is an important truth in there, I think.

3. THE SETUP
Q: So what is the very first step in the firing process? A: Composing the Job Description for the ‘Help Wanted’ advertisement

Seriously though, if you have good talent sourcing and talent management programs, firing someone should be exceptionally simple because the process should ensure that you get the right employees in the right roles and give them the tools they need to succeed. If they do not succeed despite all of that....well....there is not much debate.

To be more specific, there are 3 steps in The Setup Phase.

3.1 Step One: Source the Right Talent in the first place
There are three parts to this step. First, you need to know who you want to recruit. As part of that, you’ll need to answer the following questions:

What will they be doing in their role?
What skills will they need in order to succeed?
What personal qualities will help them excel?

Next, you’ll need to ensure that your “Help Wanted” advertisement clearly communicates the answers to those 3 questions so that the wrong candidates self-select themselves out of the process.

Finally, you’ll need a screening process that buoys the right candidates to the top in both resume screening and interviews (see my other Facebook note on that subject http://www.facebook.com/note.php?note_id=62108404979). Many managers set themselves up for the fire because they recruit out of panic rather than out of strategy.

3.2 Step Two: Set SMART Goals
As the screening process concludes, you’ll be preparing for the formal objectives setting session that you’ll be holding with the new joiner within the first few days of employment. You won’t skimp on this right?!?!? The objectives, which must be SMART Goals (http://en.wikipedia.org/wiki/SMART_criteria), should define:

WHAT needs to be delivered. Did I mention that these goals must be SMART?
WHAT the manager and the firm will provide to support delivery against these goals
WHY the deliverables drive the overall strategic goals of the firm
HOW the employee is expected to behave in the process of delivery

OK, now you both sign against this document. Oh right, one last thing. Goals must be SMART.

3.3 Step Three: Evaluate against SMART Goals
Once you’ve defined SMART goals, it is critical that you evaluate performance against them. The actual logistics of evaluation can vary from firm to firm, but ultimately, a good process must be:

Regular – quarterly at a minimum, but in a fast-moving start-up, potentially monthly
Honest, explicit, and fair - while this is a time for empathy and EQ, it is not a time for tact or little white lies.
Positive – remember, this is not a process for assigning blame. It is a session focused on future delivery. Yes, it is useful to be explicit and detailed in your discussion, but the focus needs to be on coming together for the future. Using examples should not be about deciding who is right and who is wrong, but should be focused on how can we both be right next time.
Documented – important for legal reasons, but also important because being able to summarize a conversation on paper means that communication really has taken place and you are on the same page.

Since, we are talking about firing here, I’ll assume that in these evaluation sessions, the focus is on “progressive discipline”. That is, the employee is sucking at his job and you’re trying, as a team, to get back on course. Progressive discipline works only if you focus on the following 4 rules

The employee needs to know what the problem is
The employee needs to know specifically what he/she needs to do in order to fix the problem. This might involve training that the employer can provide.
The employee needs to have a reasonable period of time in which to fix the problem
The employee needs to understand the consequences of inaction

A final note. Mobility is another option in the evaluation process. If the employee is not able to deliver in the current role, it may be that there is another role in which the employee will excel, which should be preferable to firing.

4. THE AXE
I’ve really only got 3 rules for the event itself.

4.1 RULE 1: Be prepared
This is a pretty big event. It is big for the firm. It is big for you. And, I think you know, it is big for Mr Bye Bye. So, you owe it to everyone to spend a decent amount of time preparing to make sure this crucial conversation is done well and with respect. Here is a good list to start from:

Know the law. You are representing the firm after all and the last thing you want is to do or say anything that could create legal liability.
Make sure you have all the materials you need for the event. Do you need to co-sign a document? Are you going to provide a folder of useful documents? Whatever the case, have everything prepared in advance.
Know all the details of the severance package if there is one.
Choose the right location and ensure privacy and quiet. And, please, turn off your mobile phone.
Ensure security protocols are understood by all affected parties. I personally recommend that you do not allow the employee to go back to the desk. That’s a bummer for everyone and the employee can be unpredictable in that moment, which can make everyone uncomfortable as well as depressed. Have someone clear the desk and you should walk the employee out of the office directly from the meeting.
Rehearse and give some thought in advance to the questions or concerns that will/may be raised in the meeting.

4.2 RULE 2: Be honest and empathetic
Yes, it is true that you are a manager, but you are also a person. This is one of those times at work where it is really important to have EQ. Here are a few bits of advice.

First, let the employee have air time, but don’t apologize or back peddle. The message should be clear, brief and irreversible. Also, if the employee breaks down, allow time for the employee to gain composure. Along those lines, don’t book yourself into back-to-back meetings. Finally, in general, treat the employee with dignity and respect. Use your common sense.

4.3 RULE 3: Keep to the plot
This is pretty simple. Be clear, quick and firm. You want to answer questions that come up, but this is not a discussion or argument. You want top deliver the message, execute the process, and close out the experience.

5. THE AFTERMATH
The executed
If you can, I recommend running an exit interview. This is an important opportunity to get feedback. Of course, if you are firing someone, you need to interpret the results with a grain of salt, but it is still worth making the time. Also, don’t forget to execute “leavers” processes (system access, laptops, proprietary data, etc)

Finally, be sensitive to the fact that the employee may have been shell-shocked in the meeting. Be prepared for follow-up questions or concerns. But remember, no back peddling.

The team
Appreciate the morale and emotional consequences of a firing event and give individuals who are left behind airtime to debrief with you. Answer their questions so that they understand what happened, but remember to always respecting the privacy of the one who was dismissed.

You
Firing someone sucks. Even if you don’t like the person personally, anyone who has fired someone knows that you come out of the meeting feeling like a real turd. I strongly recommend that you set aside some time to go out for ice cream or drinks with a peer to de-stress and remind yourself that you are not an evil person.