Hire, pay and let go 2 of 16 in this group
SOP 153
Fire without surprise and plan who covers the work
What this page is for. Use it when you have to let someone go. Firing is the human-resources constraint at ten to nineteen people, the stage on SOP 152 — Sell a second product at ten to nineteen people. Human resources here means lowering the chance that regulators and employees sue you. The page carries the constraint at this stage, the risks in firing badly, how to make sure a firing is never a surprise, when to do it and how to cover the work first, how to do it and what follows, the three reasons people are let go, and the frame for doing it anyway.
SOP-153-Fire-without-surprise-and-plan-who-covers-the-work.md
1. The constraint and what graduates it
| Item | At this stage |
|---|---|
| The constraint | You are firing people incorrectly, so you are exposed |
| To graduate | Create a termination policy and process |
Most people at this point know how to hire, but find it very hard to know how to fire.
2. The risks in firing badly
Firing well is called one of the most important things a business can do, from a risk standpoint and from a cultural one.
- Being sued. The risk named is being sued for firing somebody incorrectly or following the wrong process. That is the claim as made; employment law is not covered on this page.
- Damaging the culture. Fire people unpredictably, with no process, and the team concludes you do it whenever you feel like it. Who would want to stay? Probably nobody. They will not feel safe; they will see you as a loose cannon and never know who is next.
3. Make sure it is never a surprise
Firing should never be a surprise to the person. In one owner's experience, most of the time it is not: the last few people let go already knew what the call was about, because the week before they had been told that if the problem went on one more week it would not work out and they should look for another job.
Why it matters. People hold back because they do not want to make someone feel bad. But the choice is this: you could make them feel bad now, and they keep their job because they know what they are doing wrong; or upset them at the exit, when they cannot tell why it is happening.
Be explicit early. Say plainly what someone is doing wrong, and whether their job is at risk, before you ever get to firing them. That removes you as a reason they are fired. When someone asks how to know whether to fire a friend, it is treated as a red flag: does the friend know you think he should be fired? If not, you are the problem.
Tell them where they sit: red, yellow or green. Give more than you want to give: every resource, and a clear reading of where they stand. Something like: right now you are a yellow for me; it could either go green or it could go red; I want it to go green, but it could go red if these things keep happening; what can we do to get you back to green? Simple language like that works well, because it tells them where they are and that you want to help them get to green. The same three colors scoring customer accounts each week, a different use, are on SOP 273, section 2.
Take yourself out of it. You could fire people incorrectly all day, and nobody is going to fire you. If you are the problem, only you can solve it, so eliminate yourself as the reason.
4. Decide when, and plan who covers the work
Once you have decided the person is the issue (a bad culture fit, a bad skill fit, or no motivation), and you have told them where they sit, and they are yellow, not improving and turning red, plan the timing. The aim is the least disruption to the rest of the business.
Prepare the coverage first. Most people delay, thinking it will take months. Most of the time it simply means firing when it will not disrupt the team, because you prepared. Suppose you are letting a customer service rep go on Monday:
- Work out that the other four reps can each take on 15 percent more work.
- Build a spreadsheet: which customers go to each rep, the other things the person does outside that work and who takes each one, and what you will take on yourself.
- Settle how the responsibilities are spread before you let anyone go.
Pick the moment. Do it at a time that does not disrupt other people's work.
- Ideally, the less experienced your team, the closer it falls to just before a team meeting, so you can get on a call and explain what happened.
- Ideally, not before a big sales day. If you are letting a salesperson go, do it at the end of the day; otherwise it sits in everyone's head.
- Give people time to process. The less experienced the team, the harder it is to hear. If the person has a lot of friends on the team, it will be on their minds all day and disrupt their work.
- In one practice, about two hours are kept free afterward to answer the team's questions.
5. Do it, then tie up loose ends
You have made the plan and set the coverage; then you have the conversation. What to say in it is not established on this page.
Afterward, tell the person you will send an email covering:
| The email covers | |
|---|---|
| Pay | Their last paycheck |
| Severance | The severance you are giving them |
| Benefits | Their benefits, and what happens to them |
| Equipment | Where to turn in their computer |
Fire so that the rest of the organization is not disrupted, and in a way that is objective rather than personal, and the process is complete. It is said to protect you from risk on both sides: compliance and culture.
6. The three reasons, and the one you feel
People are let go for one of three fits: culture, skill or will.
- Skill or will. If someone lacks the skills or has low will, the good news is that when you check the coverage, they are not doing much. More times than not, you let such a person go and nothing happens.
- Culture. The only times you really feel it, in the view here, are when someone is highly effective but a bad cultural fit, harmful to the whole team. Those cases are, it is said, significantly rarer than the other two.
7. Have the conversation anyway
So many people sit with these situations for a long time because they will not have one hard conversation. Someone, in a single conversation, said a person did nothing and should go, then said he could not be let go because everything he did would have to be replaced. That is an excuse. Most of the time people are avoiding the conversation, not what comes after it.
It does not suddenly get easier. After a decade of it, one operator still does not look forward to firing anyone: still sweaty, still with a stomach ache, still up the night before, however many times it has been done. There is no magic; you do it scared, anxious, annoyed, frustrated and worried, and you do it anyway.
The frame. You feel bad because you are thinking of the person's family and circumstances. They deserve to go somewhere they have a future. Every day you hold on to them, you keep them from a future in their career: you protect your own feelings in the short term and damage theirs in the long term. You serve nobody by keeping someone in a job where they have no future.
8. The bottom line
At this stage the business was firing people incorrectly and was exposed. To graduate, create termination policies and processes.
9. What this page does not decide for you
- What to say in the conversation itself. Not established on this page.
- How much severance to give. This page gives no figure for severance.
- What a written termination policy contains. Not established on this page.
10. What this page does not cover
Employment law and final-pay deadlines are not covered on this page.
Terms defined on this page
- Culture, skill or will
- The three kinds of fit people are let go for. Low skill or will usually leaves little to cover; in the view here, the one you feel is the rarer case of a highly effective person who fits the culture badly.
- Red, yellow, green
- Three colors used in three different ways. Lead scoring: red leads are truly unqualified, yellow less qualified, green prime (SOP 84; see Traffic-light score). Where an employee stands: plain labels at work, where yellow can turn green or red and you say what would get them back to green (SOP 153). Customer health: every account gets a color each week, one color for each distinct response, and each color sets off its own action, from keeping going to escalating (SOP 273).
- Termination policy and process
- A set way of letting people go. It clears the HR constraint at the ten-to-nineteen-person stage and cuts legal exposure and damage to culture.