When, how and why you should fire someone - Sunday Times

Firing people skilfully should mean those leaving will respect you and those left behind will not be looking over their shoulders

I blame Lord Sugar. He makes it look too easy, almost as if he’s enjoying it, and when he jabs his finger towards the unlucky recipient of those dreaded words, ‘You’re fired’, there’s an unpleasant whiff of sadistic pleasure in the boardroom.

The Apprentice may be fabulous entertainment, but in the real world of business, that final goodbye is one of the hardest skills a leader can learn. It’s never enjoyable, but if performed well, it will make the person you’re firing feel as if you’ve done the right thing, for the right reasons and in the right way. Who knows — and this is something I strive for whenever I’ve let someone go — you might even stay friends.

I’ve learned the hard way, making mistakes I’ll always regret. The first time I let a senior executive go at one of my companies, it was a disaster. I ran a property management business in Newcastle and sat down one of my direct reports to tell them their performance was so terrible that they were fired. I let my frustration and disappointment get the better of me. I was too brutal, it got personal and I made a difficult situation much, much worse. The subsequent nastiness was all my fault. I should have shown more respect, behaved calmly, compassionately and been constructive.

On other occasions, the mistake has been not what I did but what I didn’t do — in particular, not “exiting” average and poor performers sooner. In fact, I once made the double whammy mistake of giving more responsibility to the wrong leader while saying goodbye to another who’d have done a far better job. Most retiring CEOs would agree that one of their biggest regrets was not making management changes soon enough.

Firing someone is not just an action, it’s a skill that needs to be developed, as vital as picking or promoting a winner. And it’s a skill that should be responsibly adopted by people at every level of an organisation. And by the way, human resources is there to help but the responsibility for that face-to-face encounter is on you.

So, how to make the decision to let someone go in the first place? Sometimes it’s blindingly obvious, but if not, I’ll ask myself a series of questions: if the individual told you they were leaving, how hard would you fight to keep them? Did they achieve all their objectives last year? Have you had to give them too much help and direction? Do they lack the inspiring leadership skills you thought they possessed? Are they negatively affecting colleagues? Are you fed up of chasing them on agreed actions at your one-to-ones? Are you frustrated by their lack of pace, action and enthusiasm?

Effective decision-making starts with asking and answering questions like these. You can bet that your colleagues — probably already aware of the difficulties — are asking them. If you’re not, they won’t appreciate your lack of leadership.

Next, be human, express empathy and find the right language. Very often, losing someone is not simply about failure. Sometimes employees struggle to adapt as an organisation grows or roles change. They’ve not evolved or developed skills at the same rate as colleagues. Perhaps their job has just outgrown them.

Explain that you’re building a team that needs to take the company forward and that their formidable skills will probably be more appreciated elsewhere. Even though you’ve enjoyed working with them, their skills do not fit the business, and rather than criticising them, you want to focus on helping them find their next role elsewhere. Be clear and consistent about why you are proposing to dismiss them. This will help manage the risk of discrimination and unfair dismissal claims.

I know HR executives and lawyers encourage us to stick to a “best practice” script but their esoteric language ends up making leaders look too rigid and uncaring. I much prefer to build an emotional connection in this most difficult of circumstances, letting those who I once hired know how much I appreciate all they’ve done. By showing that you genuinely care, those leaving will respect you and those left behind will not be looking over their shoulders.

All this is easier if you’ve prepared carefully in advance. Marshall your emotions, prepare your language and imagine how the employee might react. That reaction might include a request to quit right away, so part of your preparation might include starting a confidential recruitment process using a headhunter, with the aim of finding a replacement before having the exit conversation with the incumbent.

You might decide you want the employee to work on a notice period until their replacement arrives, in which case consider setting up a decent incentive for them to do so. Alternatively ask a high-calibre internal leader to mind the fort in the interim.

If you’ve done your job properly, the end shouldn’t come as a surprise to anyone. If someone is shocked when facing the truth, it’s your fault for not telling it sooner. Frequent feedback is essential for any team leader, especially if people are falling short of what’s expected or not hitting targets.

Employment law makes clear that you can sack someone fairly if they have become redundant, demonstrated they’re incapable of doing the job properly, are guilty of gross misconduct, or have done something else seriously wrong. If someone is not up to the job, the more you’ve made that clear over a significant period, helping them overcome difficulties, the stronger your case will be. The greater the feedback and appraisal, the less likely you’ll be landed with an unfair dismissal claim.

A good organisation will have put in the effort to help transform individuals who are clearly struggling, offering training and mentoring to turn things around. If people are aware of their limitations and are provided with opportunities for improvement, they can be part of the solution.

But no matter how much effort you’ve put in to correcting things, if it’s not working, don’t delay. In many cases, particularly senior leader roles, it’s better to get on and put an exit agreement in place rather than performance manage someone who isn’t going to make it.

Have the courage to make the decision, instead of worrying that firing someone will be bad for morale or thinking that a departmental transfer will solve everything. Your responsibility is to the entire company, so don’t prevaricate, cross your fingers and hope. You’ve got a business to run. Ideally, you want to come to a firm decision on a first formal performance review after six months for new hires. Ask yourself if they’ve delivered and if you’re still excited about working with them; measure the quality of their outputs and whether their performance is supported by the data. If someone is in a highly influential role, never give them more than 12 months before coming to a clear decision. If you leave it too long, the entire working culture will be negatively impacted which can lead to widespread performance problems. Nurturing that culture starts at the top.

When a decision has had to be made, the buck has always stopped with me. I’ve never asked anyone to do my dirty work. It’s crucial to involve HR but no matter how awkward the conversation, don’t meekly hide at the very moment that you need to show strength. If you do, colleagues will start whispering about your inability to be decisive on tough issues.

Also, don’t over-explain. Too much detail will lead you into the kind of poisonous situation I experienced early in my career. Keep it brief and lead with the bad news. Don’t meander through an overlong conversation about why things aren’t working out, changes that need to be made, personal strengths and weaknesses, culminating in the final (not wholly unexpected) revelation that they’re being fired. Get to the crunch and move on to the settlement package they’re getting and how you’ll help them find a new role somewhere else.

Make it about the future not the past. And if the person sitting opposite questions your decision, make the explanation simple. If you’ve prepared the ground by previously pointing out poor performance in the preceding weeks and months, you’ll avoid a heated and defensive debate.

Take the time to listen and show understanding, providing support and compassion rather than a cold shoulder. The last thing you want is to make a highly emotional confrontation even tenser. Even if the person is not going to be a friend for life, I at least want them to feel that my decision is about what’s best for the company. If our paths cross again, I want them to know I can be trusted to do the right thing. And don’t forget they’ll be leaving behind close friends among colleagues and suppliers. You don’t want fear, anger and anxiety to spread because of a painful goodbye.

If you treat departing people with respect, those who remain will see you for the person you are — fair, honest and utterly determined. They’ll want to stay rather than consider their own futures. Plus, word gets out about the kind of leader you are (social media is an incredibly powerful tool when you least want it to be), and if you’re unpleasant, good replacement candidates will look elsewhere. Who knows, even the person you’re letting go could have good words to say about you and the business. This is why you should help them control their exit, getting their input on how an announcement should be worded.

Firing is a duty and responsibility that takes courage and skill. Leadership is not just about making the right decisions to move forward, it’s also about making them to ensure you don’t remain stagnant. Show humility in admitting you made the wrong call and hired someone whose skills didn’t match the role. It might be your fault as much as theirs. But don’t do it in the heat of the moment. Plan, co-ordinate and think it through. Don’t allow emotion to get in the way, be open and, whatever happens, never point your finger. Leave that to Lord Sugar.

Richard Harpin is the founder and chairman of HomeServe and Growth Partner, and owner of Business Leader magazine