Can I Fire an Employee Who Isn’t Working Out?
One of the hardest parts of being a small business owner is realizing that an employee simply isn't working out.
Maybe they're consistently missing expectations. Maybe their attitude is affecting the team. Maybe you've tried coaching them and nothing has changed.
Eventually, you may find yourself asking:
"Can I fire them?"
In many cases, the answer may be yes. But before you make a termination decision, there are several important things you should consider.
The fact that an employee isn't working out doesn't mean you should rush into termination.
Here's what small business owners should think about before letting an employee go.
First, Understand At-Will Employment
Most employment in the United States is considered at-will employment, unless an exception applies.
Generally, at-will employment means an employer or employee can end the employment relationship at any time, with or without notice, for any lawful reason.
But there's an important distinction:
At-will does not mean you can fire someone for any reason whatsoever.
There are federal and state laws that prohibit certain types of employment discrimination and retaliation, and other legal protections may apply depending on the circumstances.
That's why it's important to look at why you're terminating the employee and what has happened leading up to the decision.
"They're Just Not a Good Fit" Isn't Always Enough
Small business owners often use the phrase:
"They're just not a good fit."
That may be a perfectly legitimate business assessment, but you should be able to explain what that actually means.
Is the employee:
Consistently missing performance expectations?
Frequently absent or late?
Failing to follow established policies?
Struggling to complete essential job duties?
Having ongoing interpersonal issues?
Engaging in inappropriate workplace behavior?
Failing to improve after receiving feedback?
The more specific you can be about the actual workplace issue, the better positioned you are to make a thoughtful employment decision.
Look at the Employee's Performance
Before terminating someone for performance reasons, take an honest look at the situation.
Ask yourself:
Did we clearly communicate what was expected?
An employee can't reasonably be expected to meet expectations they were never given.
Did we provide the necessary training?
If an employee was never properly trained, the problem may be a training issue rather than a performance issue.
Have we given the employee feedback?
If this is the first time the employee is hearing that there's a serious problem, termination may come as a surprise.
Have we given them an opportunity to improve?
Depending on the circumstances, giving an employee a reasonable opportunity to correct a performance issue may be appropriate.
This doesn't mean every situation requires a formal performance improvement plan or a specific number of warnings.
It means you should understand the situation before making the decision.
Document the Problem
Documentation is one of the most important parts of managing employee performance.
And documentation doesn't have to mean creating a giant file every time an employee makes a mistake.
Good documentation simply creates a factual record of important conversations and events.
For example:
Weak documentation:
John has a bad attitude and isn't doing his job.
Better documentation:
On August 28, John was scheduled to complete the customer follow-up report by 3:00 p.m. The report was not completed. During the meeting on August 29, John was reminded of the deadline and expectations for completing the report. John acknowledged the expectation.
The second example gives you useful information:
What happened
When it happened
What was expected
What was discussed
How the employee responded
Avoid emotional labels and personal opinions whenever possible.
Document facts, not frustration.
Look at Consistency
Before terminating an employee, ask:
How have we handled similar situations with other employees?
If two employees have similar performance or conduct issues, but one is disciplined and the other isn't, you may create unnecessary risk and employee-relations problems.
Consistency doesn't necessarily mean every employee must receive exactly the same consequence for every situation.
There may be legitimate differences in circumstances.
But you should be able to explain why you're treating situations differently.
Consider Whether the Employee Recently Made a Complaint
This is an especially important question.
Has the employee recently:
Complained about discrimination or harassment?
Reported a safety concern?
Raised a wage or payroll concern?
Requested a legally protected leave or accommodation?
Participated in an investigation?
Reported potentially unlawful conduct?
If so, pause before making a termination decision.
That doesn't mean you can never terminate an employee who has made a complaint or exercised a legal right.
It means you should be especially careful to make sure the employment decision is based on legitimate, well-documented reasons and not retaliation.
This is an excellent situation to discuss with an HR professional or employment attorney before proceeding.
Consider Whether There Are Other Protected Issues
Before terminating an employee, consider whether there are circumstances that could create additional legal considerations.
For example, an employee may have raised an issue involving:
A medical condition or disability
A request for accommodation
Pregnancy
Family or medical leave
Military service
Wage and hour concerns
Workplace safety
Discrimination or harassment
Other legally protected activity
You don't need to become an employment-law expert to run your business.
But you do need to recognize when a situation deserves additional guidance before you act.
Don't Make the Decision Based on Emotion
Employee problems can become personal.
Especially in a small business, you may know your employees well. You may have hired them personally. You may have invested time and money into training them.
You may also simply be frustrated.
That's exactly when it's helpful to slow down.
Ask yourself:
"If I had to explain this termination decision to an outside person, could I clearly explain the legitimate business reason?"
If the answer is no, take a step back.
Get another perspective before making the decision.
Do You Need a Written Warning?
This is a common question.
Not necessarily.
There isn't a universal rule that every employee must receive a certain number of written warnings before termination.
Whether a warning is appropriate depends on the circumstances, your policies, your past practices, applicable law, and the nature of the employee's conduct or performance.
For some situations, coaching may be appropriate.
For others, a written warning may make sense.
For serious misconduct, immediate termination may potentially be appropriate.
The important thing is to avoid creating an arbitrary rule like:
"We can never fire anyone until they've received three write-ups."
If you establish a policy requiring a particular process, make sure you're following your own policy consistently or understand why an exception is appropriate.
What About Serious Misconduct?
Performance problems aren't the only reason an employee may not be working out.
Sometimes the issue involves serious misconduct.
Examples might include:
Theft
Violence or threats
Serious safety violations
Falsifying records
Harassment
Serious policy violations
Intentional misconduct
In these situations, the appropriate response may be different from a gradual performance-management process.
If you're dealing with serious misconduct, it's especially important to gather the facts and get appropriate HR or legal guidance before making a final decision.
What Should You Say During the Termination?
Once you've made the decision to terminate employment, keep the conversation clear, professional, and concise.
You generally don't need to spend 30 minutes listing every mistake the employee has ever made.
A termination conversation might be as simple as:
"We've made the decision to end your employment with the company, effective today. This decision is based on our concerns regarding your performance and our previous conversations about those expectations. We'll provide you with information about your final paycheck and any other applicable next steps."
The exact language should depend on the circumstances.
Avoid arguing with the employee or getting pulled into a debate about every detail.
If you've made the decision, the termination meeting is not the time to try to convince the employee that they should agree with you.
Have a Plan for the Employee's Departure
Before the termination meeting, make sure you know what happens next.
Think about:
Final paycheck requirements
Accrued or unused PTO, if applicable
Benefits
Return of company property
Keys
Company credit cards
Equipment
Email and system access
Passwords
Confidential information
Client information
Unemployment-related documentation
Any required notices
The specific requirements will depend on your location and circumstances.
Having a checklist can help make sure you don't forget something important during an emotional situation.
What If You're Not Sure Whether You Should Fire Them?
This is where HR support can be incredibly valuable.
Sometimes the answer isn't immediately obvious.
You may have an employee who is struggling, but you aren't sure whether to coach them, write them up, put them on a performance improvement plan, or terminate employment.
An HR professional can help you step back from the emotion and look at the situation objectively.
They can help you consider:
What has happened
What has already been documented
Whether expectations were clearly communicated
Whether the employee has had an opportunity to improve
Whether similar situations have been handled consistently
Whether there are potential legal concerns
What your next steps should be
You don't necessarily need a full-time HR department to have someone available for these conversations.
Sometimes the Best HR Decision Is Getting Help Before You Act
Small business owners often call an HR professional after something has gone wrong.
But one of the most valuable times to get HR guidance is before you make a difficult employment decision.
If you're sitting at your desk thinking:
"I really think I need to let this person go, but I don't know if I'm handling this correctly,"
that's a great time to ask for help.
A quick conversation can give you a different perspective and help you approach the situation more thoughtfully.
Need Help With a Difficult Employee Situation?
Moxie HR Consulting helps small and growing businesses navigate employee issues without needing to hire a full-time HR department.
Whether you need help documenting a performance problem, determining appropriate next steps, preparing for a termination, or simply talking through a difficult employee situation, Moxie can provide practical HR guidance.
You don't have to make difficult employee decisions alone.
And if you want ongoing access to an HR professional for questions and employee concerns, the Moxie HR Hotline provides ongoing HR support for $300/month.
Sometimes the best time to call HR is before you make the decision… not after.
Disclaimer: This article is for general informational purposes and does not constitute legal advice. Employment laws vary by state and situation, and additional protections may apply depending on the circumstances. Before terminating an employee in a complicated or potentially high-risk situation, consult a qualified HR professional and/or employment attorney.