How to Fire an Employee: Advice from 7 Successful Contractors

Firing an employee Unless you’re a specific kind of person, firing an employee is never fun. It’s hard to let someone go, even if they’re damaging your business by mucking up jobs, being late, or lowering your crew’s morale.

Most of us dread firing an employee, even if we know it’s for the best. There’s one solution to ease that dreaded feeling, though– have a firing system in place.

There’s no one “right” answer when it comes to a firing an employee, simply because every contractor’s business is different. Every contractor’s staff is different, too. Sometimes the business owner handles the firing process, and sometimes it’s an office manager or HR specialist. There are plenty of variables.

What’s important is finding (and sticking to) a firing system that works for you and your business.

With that in mind, we asked several successful contractors how they fire employees. Here are the results.

Hire Slow, Fire Fast

Most contractors agree, finding and retaining top-talent isn’t easy. One solution to that problem is the “hire slow, fire fast” philosophy. If an employee isn’t a good fit, you’ll know sooner rather than later. Poor workers, or workers who just aren’t a good fit, can damage your business financially, and take a toll on the rest of your employees.

Ryan Hammers of Impact Enclosures writes:

“… hire slow. FIRE SUPER FAST. Usually, if they last 3 months, they usually stay for years with us.”

Rodney Peralta of Arithane Foam Products, Inc. elaborates on the philosophy:

“[Firing employees] is an area most contractors wait too long before acting on. In my high stress/high production environment, I am unable to wait very long to let someone go. Generally, with an employee the rule of thumb is to fire fast and hire slow, ensuring [you hire] the right talent into your company.  

I have learned this the painful way over the years, and I did the opposite for years; fearing the consequences of that employee being gone without a replacement. The fact is, the wrong employee in any position is costing you money every day, [when employees] remain at the company, in ways you may not see until months/years ahead. When it comes time to actually do it, Charlie Gindele said it best-  “Short and brief with no elaboration. Sorry, John Doe, we will no longer be needing your services.  We wish you luck.”  And that is it.  Absolutely no conversation or discussion.  Truth is, they already know why.”

Keep Track of Everything

Retaining poor employees does cost money, even if you like them. When you value someone as a person, but not as an employee, you might feel like you need some backup. That’s where writing everything down and keeping track of an employee’s actions come in.

If employees can see a logged, documented history of their behavior patterns, it’s easier for them to see why there’s a problem and how they didn’t do enough to address those problems. It also prevents future disputes and lawsuits, even if an employee doesn’t agree with their termination.

From Amanda Cushman of Jancon Exteriors:

“I keep a log in the front of every employee’s personnel file. On this log, I keep notes of everything an employee does, good or bad. It will include being late, customer complaints, employee of the month awards, poor performance on a project, attendance issues, etc.

These notes help me when making disciplinary decisions.

The best way, I find, to terminate an employee is to keep a paper track. The employee should be given a documented verbal warning, followed by a written warning, another written warning, and, finally, termination.  All warnings should be documented in writing and signed by the supervisor and the employee. They should have a clear explanation of the problem and solutions, to work towards fixing them. If it comes to the point that an employee needs to be terminated, I provide a final termination letter to the employee, and have them sign it and keep it in the file. The termination letter is an explanation of the reason for termination. That way we have it on file that the employee knows why they were fired and acknowledged it by signing the termination letter.”

Todd Munday of 3R Recycling also agrees about keeping track of an employee’s performance from the start, and he elaborates on the termination itself:

“… you’ve evaluated all the reasons why an employee should be terminated. You’ve run the decision through an employment law audit and made sure you have appropriate records and documentation supporting the decision. Now it’s time to tell the employee that he or she is about to become a former employee.

How you break the news to the employee is key: Follow basic rules of legal and business etiquette to allow the employee to leave with dignity—and not return with a lawsuit.

If the employee’s manager, rather than HR, is designated the bearer of bad news, at least have an HR rep present at the meeting to answer questions the employee may have, and to help reduce the risk of legal exposure by keeping both sides focused on the matter at hand. Also, it helps to have a witness, in case the employee challenges the termination later.

Briefly deliver the news by summarizing the well-documented, job-related reasons for the termination. That way, while the employee may not like it, he or she will have little to dispute.

Allow the person to offer his or her side of the story—and even vent a little emotion—without interruption.

Also, avoid using any harsh words during termination meetings that would serve only to inflame the issue. Stick to the facts; don’t make generalizing statements.”

Ryan Hammers believes in firing fast and hiring slow, but he’s also a stringent record keeper. Sometimes, though, he does value his employees as people and workers– they’re just not a good fit for his business.

Ryan, again:

“When there aren’t any goals or objectives written from the beginning, [terminating an employee is] 100x harder to do.  I have reviews with my guys to let them know where they stand, periodically, so it isn’t out of the blue; and I put everything in writing from the beginning.  It’s about the action, not the person, when talking to them and giving them feedback. I.E. They aren’t idiots, but what they did may have been stupid.

When you let them know how they are doing compared to their peers, and in writing, I find that they either step up or they almost fire themselves, or tell me the job isn’t for them.  A lot of times they know it’s coming, and they quit before I even need to go into why I’m letting them go.  

I ask them, periodically, where they think they need to improve and how they feel they are doing. A lot of times they are harder on themselves than I am with them. If I really like them and they just aren’t cut out for that specific job, I ask them to come in to be my consultant and pay them well for a couple hours.

I ask them for feedback on the other guys, and make it strictly confidential (that is if they already planned on quitting). I ask them: if they planned on taking down my company, how would they do it and who would they take with them (I usually give those guys a bonus)? I also ask who they don’t think is an A player and why. (Those guys may be next to be fired)”

Setting Expectations

As Ryan Hammers mentioned, setting expectations from the beginning is important. It’s also important to let your employees know how they’re doing throughout their tenure with your business, so they’re aware of how they’re not stacking up.

Expectations and communication help soften the blow.

From Jim Downey of JAD Exteriors:

“The key is to first establish clear expectations on what the job performance requirements are for the employee or subcontractor.  Make sure that the employee knows what is expected of them in their job performance and your expectations. If they are not meeting your expectations on a daily basis, provide timely feedback on what changes you want them to make in order for them to be successful.

Giving an employee or subcontractor the opportunity to improve is very important. If improvement is not made, then firing them is the natural consequences of their actions. Never be personal in your firing of an employee or subcontractor; simply inform them that this relationship is not working, and that you are moving in another direction.  Thank them for their past service and wish them the best going forward.

Understanding that an employee or subcontractor has a family and responsibilities make the decision to [fire] them difficult but, ultimately, as an owner, it is my responsibility to make sure my company remains profitable, and that we continue to provide a quality service to our customers.  Falling short of this goal jeopardizes all employees.”

Keep it Simple

How many chances you give an employee to improve is up to you, of course. Some employees have less experience than they initially let on, but they can be trained into competence within a short amount of time. Some just can’t, though.

That’s when some contractors keep the firing process simple.

Keith Pedro from Keith & David Home Improvement writes:

“The way I fire people is pretty simple, I just tell them “you’re done here” or “get out.” When we chew through employees, it’s because they lie to us from the start by telling us they have all this experience, when they really don’t. Everyone is the best when you ask that person, just like I’m the best roofer, sider and window installer I know. People will do or say anything to work. I can’t blame them, but [they should] be honest about what [they] can and can’t do.”

Rick Duggan of RGC agrees. He writes:

“I keep it short and simple. I just say, “unfortunately, ( employee), I am going to let you go today, I am going a different direction and I wish you the best.

If they ask why, I just repeat that I am “going a different direction and I wish you the best.”

As you can see, different contractors have different firing systems in place, but there are some common threads. Keeping track of an employee’s performance, setting expectations, firing fast and hiring slow, and treating a fired employee with respect and dignity as they leave are common themes.

In the end, firing an employee is easier when you have a system in place. Whether you keep it simple, or keep a detailed log of your employees’ actions and behaviors, you’re sure to feel less stressed when you have a firing system in place.

Building the best,

Scott

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