MaRS Library Terminating employees respectfully: When a startup faces firing an employee
Terminating, or firing, an employee is often a difficult situation, but there are ways to ensure that both parties are left with their integrity and self-respect.
When faced with the situation of firing an employee, focus on three areas:
- Legal implications: See the article Terminating employees and consultants for details on the legal aspects of firing an employee
- Psychological aspects: Allow the terminated employee to talk about the situation from their perspective and to leave the company feeling that they have been heard
- Economic impacts: Think about the financial impact of a termination for your startup and the whether the company will support the employee’s career transition process
Terminating employees respectfully: Ways to focus on the positive
There are ways to create a termination process that focuses on a positive future for the employee you have to fire and a positive reputation for the company. These include:
Terminations often result from an emotionally charged situation that can spark irrational judgment on all sides. Firing an employee should rarely happen in the heat of the moment. It should instead involve an assessment of the facts. The conclusion to fire an employee should always require two or more approvals to ensure that an objective decision is being made
Supporting career transition
While this is not considered mandatory for companies, the provision of career transition support is becoming a popular choice. It benefits you and your employees:
- For the business, it helps protect the company’s reputation—the company needs to consider how the termination process affects its ability to attract new employees
- For the employee, it helps counter the effect of the termination on their self-confidence and their ability to find future employment. The transition support can range from the provision of office space, a computer and a phone to a fully paid outplacement program.
The outplacement program can include career and personal counselling, assistance with resume writing, training on interview skills and help in finding new job opportunities
Reviewing each termination
Every termination is unique and should be reviewed within a month to ensure that the information gathered is still fresh on peoples’ minds. Solicit feedback from your team to ensure that everyone has a chance to express their own perspective.
Every effort should be made to ensure that other employees do not leave as a result of the termination.
The process of firing an employee can be a valuable opportunity for your startup to gain insight into ways to improve the termination process and also to work with employees who are unhappy about how the termination was handled. A committee can be used to review terminations on a more formal basis if required.
- Job description template: A sample for startups.
- Case study: Recruiting—Hiring your first salesperson.
- Product management and the product manager.
- Win-loss analysis: A tool to gain product and market information.
- The Impact Economy: The Insider's Guide to Finding Meaningful Work and Attracting Top Talent.