One of the most difficult and least favorite parts of a leader’s job is deciding to let their employee go and then carrying out the process with humanity and fairness while also keeping the ship sailing smoothly. Before making this decision to either fire or continue to support, it can be helpful to understand the turnover trends at your organization to put the issue in perspective.
What is the turnover like on your team and at your company?
Low turnover is a sign of great company culture. It shows that employees enjoy the environment and that the company has been thoughtful in its hiring processes and has gotten the right people matched to their positions. On the other hand, high turnover is not only costly but could be emblematic of deeper and more systematic issues. Perhaps, mistakes are being made in the hiring, training, or role placement process. It could also be due to poor leadership if the common denominator is that you’re the one team that fires the most. Or, maybe the company is growing so fast that leaders are not paying attention to the big picture such as to the phase shifts, which is where everything breaks as the company triples. Leaders may not be preparing for that different environment and getting their team adequately braced for the transition. They may not be able to use the same processes for a team of 50 as they would 150.
Another reason to examine trends is to get a grip on the costs. According to Gallup data, the cost of turnover can be extensive; it can equal one-half to two times the person’s annual salary, including the expense of finding a replacement, onboarding, training, and the loss in productivity, morale, and institutional knowledge.
While low turnover is a great sign, you are not aiming for 0% within teams or in the company because some shakeup is healthy and necessary. According to Adam Grant, a body of research shows that teams do the best when they have 4-4.5 years as a nucleus as it takes a few years to create effective routines and know each other’s strengths and weaknesses and ways to complement them further. It’s challenging to build alignment when teams are only together for a brief period. Similarly, when teams stay together for too long, success drops because it lacks the diversity of thought and the pouring of fresh ideas which leads to innovation.
Reasons to Fire
While noting every organization is different and making these decisions are specific to the culture and needs of the company, here are some common reasons to dismiss an employee:
1. Ethnical violation. If your employees lie, steal, or betray you, your team, or your clients, that is grounds for dismissal. If they intentionally hurt, harass, or offend another person, there should be a zero-tolerance policy for this behavior because it can be quite corrosive to the culture. Nobody has the right to deliberately belittle others. When the trust is appallingly low because of frequent deceptions and misdeeds, a productive and genuine relationship cannot be built and productivity will be compromised.
2. Poor cultural fit. If the employee is causing more problems than solving and the bad outweighs the good, it is time to go. For example, if they do not operate with a growth mindset or a “what’s possible” mentality, and their default is seeing only the obstacles and getting easily deterred, that behavior can be counterproductive to the objectives. Suppose they have an apathetic attitude in not caring about their work or their teammates or a negative disposition and exhibit toxic behavior where they are bringing everybody else down. In that case, it is time to make a change. Recent research from Harvard Business shows that one bad employee can corrupt a whole team. The study looked at how employees act when they are around someone who misbehaves. It found that 37% of those studied were more likely to do something dishonest if they worked with someone with a history of bad behavior.
3. They are consistently underperforming and have not responded to your support. If you have managed them well by giving them timely and specific feedback and have been a supportive partner in their performance reviews and career advancement plans, but they are regularly performing poorly, not capitalizing on any of the opportunities for improvement, or have ignored your repeated efforts to support them, it’s time. In any of these cases, it should never be a surprise to them when they are let go, they should be well aware of what they need to do and the ramifications of not delivering on realistic expectations. In most organizations, performance improvement plans are in process to address these issues. If you have a high standard of excellence and offer a supportive culture, keeping a low performer can be more costly to the team than the disruption of letting them go. A good check-in question to ask yourself is, if you were starting this company today, would you rehire this person? If the answer is no, follow your gut. Netflix uses the “keeper test,” which is when managers ask themselves – “Which of my people if they told me they were leaving for a similar job at a competitor or peer company would I fight hard to keep?”
When it comes to the tough decision of letting an employee go, certain reasons make this decision an easier one. If the person committed any ethical violations, is a net negative on the culture because their attitude diminishes the team instead of accelerating it, or if they are consistently underperforming and do not care to get better, then do not delay, make the call, as tough as it may be.
Quote of the day: “Firing is not something you do to someone: firing is something you do for someone.” Author Larry Winget
Q: When do you know it is time to let somebody go? What’s your process for firing? Comment and share below; we would love to hear from you!
[The next blog in this firing series 2/3 will focus on choosing to support your team instead of dismissing them]
As a Leadership Coach, I partner with leaders to best navigate performance management challenges and build flourishing cultures, contact me to learn more.