Founder in Eleven

I made a post last week on layoffs and TSG’s 2008 experience in avoiding layoffs despite the economic downturn.  While I might say “If at all possible, never perform layoffs,” I thought it would be worthwhile to talk about when and how to respectfully fire employees (a skill that I always struggled with, as well as other business owners in my different peer groups).  This post will share my experiences with letting employees go and the mantra that worked for my company, TSG: “It’s me, not you.”

When to Fire an Employee

It can be a difficult decision to fire an employee that does not want to leave or has not committed an obvious firing offense (like stealing or fraud).  Firing an employee for fraud or another obvious offense should be done quickly with minimal input from the team.

For myself, firing employees was difficult because:

• As a founder/leader, I felt it was my job to develop and train employees. Having to fire an employee was recognition of our failure in recruiting, hiring, and the employee’s development.
• I was always concerned about TSG company culture..  I didn’t want to manage a company that had employees looking over their shoulder worried about being fired unfairly or out-of-the-blue.

When it came to firing employees, TSG evolved to have two main criteria that differed by employee level:

• For managers, the criteria had to come more from the senior managers rather than the team of managers. On rare occasions, the senior would weigh the contribution of the manager-in-question alongside other managers to assess if the manager should remain part of the team.
• For staff (0–4 years’ experience), we would evaluate their most recent job performance to determine if the employee was performing at the appropriate level expected for someone with their level of experience and compensation. 

The key to any firing decision was timely evaluations.  For staff, we would have evaluations for every project.  When an employee was struggling, we would get HR involved and put them on a Performance Improvement Plan. During our daily manager huddles, we talked about the issues the employee was having and tried to work on altering their staffing and development  to better suit their needs.

For managers, I would often talk to them outside the huddle about the same set of issues, projects, clients, or other ways to improve the employee’s performance.  It should be noted that we were not as rigorous in our manager evaluations as we were with our staff evaluations since we wanted managers to have significant autonomy in managing their projects without other manager involvement.

For both managers and staff, we would make firing decisions based on the inability of managers or senior managers to see the employee correcting their performance in the future.  For staff, during the huddle, if I would notice multiple managers not wanting an employee on their project, I would usually initiate the “should we let go of this employee” discussion. My team often knew it might be heading that way but didn’t want to be the initiator of that action.  For managers, it fell more on my shoulders   regarding the inability to not see a path where the employee could be successful at TSG.  Before any final decision, I would talk to multiple managers to make sure I had a consensus on the firing decision.

How to Fire an Employee

Once a decision is made, I would typically take the lead in talking to the employee.  As founder and a leader, I felt this was something that the employee should hear directly from me rather than the other managers or our HR lead. I would typically wait until late in the day (4:30-5:00 or so) to call the employee into my office, since I wanted to give the employee the ability to leave after the discussion without all their peers wondering what had happened. During the discussion, I felt it was very important to present the firing as a final decision, as well as give the employee the reasons behind why they were being let go.  Typically, the conversation would include some of the following:

• I would state that the last one (or two or three) projects had not gone well.  For the staff with a performance improvement plan, I would mention that we had given the employee multiple chances to correct the performance and didn’t see that performance changing.
• Early on, I would state that this decision was final.  I always thought it was important not to seem as though I could be talked out of the decision.
• I would talk about what was discussed during the daily manager huddle..  Often, managers didn’t necessarily trust that the employee would be able to handle a project and would prefer to staff someone else, often at a lower level.  This is where the “It’s me, not you” mantra would come into play.  I felt it was important for the employee to understand that TSG did not have the opportunity for the employee to be successful given their past performance and managers’ evaluations, while stressing that the employee might be very successful with a fresh start somewhere else where their history would not come into play.
• I would mention to the employee that maybe the technology, consulting, or small-company environment was not the right fit for them.
• I would talk about their upcoming job search, and how we would give the employee at least two weeks’ notice to avoid a gap in their employment.  I would offer the employee any help I could with finding the right next assignment.
• One thing I never said was “We don’t have enough work, so we have to let folks go” as we didn’t make hiring/firing decisions based on pipeline but on performance. While “we don’t have enough work” seems to fit in the “It’s me, not you” mantra, it can give the perception that more firings will be coming, making the rest of the staff nervous.  As mentioned in an earlier post, “Embracing the bench” focuses on the idea that it is good to have resources on the bench and available when needed versus the negative connotation where unbillable hours are to be avoided at all costs or staff needs to be fired to maintain profitability goals.

In hindsight, we were pretty lucky in that, given the environment for technical skills from 2008 to 2020, each employee that was let go was often able to quickly find their next job.

Summary

Firing employees is difficult but is often necessary and can be done in a manner that respects the individual.  After a firing took place, I would often have staff ask me “What happened with employee X?”  My approach was to always say I was sorry it didn’t work out for them at TSG, and they were not performing at the level we were expecting.  Most of the time, the employee’s peers saw the firing coming before I did, but I was always proud we gave second or third chances rather than making brash decisions that would affect culture of the company.