Mastering Compassionate Leadership: The Entrepreneur's Guide to Graceful Employee Termination

Navigating the tough terrain of employee termination is as crucial as it is challenging. 

Join me, Brian Montes, on the Entrepreneur to Employer podcast where we discuss the complexities of letting team members go—a stark reality in the journey of leadership. 

This isn't your typical run-of-the-mill advice; we're going beyond the basics and into the heart of what it takes to handle one of the most sensitive aspects of team management. From personal anecdotes to the risks of unwarranted second chances, I share insights on how to conduct terminations with a blend of professionalism and empathy, ensuring your leadership reflects both firmness and compassion.

We also dive deep into the aftercare for the remaining team, a topic often overlooked but essential for maintaining morale. I provide a strategic roadmap for transparent communication, designed to prevent speculation and preserve a positive team dynamic. 

By focusing on preparation, documentation, and the right approach, we explore best practices aimed at transforming this tough process into a potential positive outcome. This episode isn't just a conversation—it's an invaluable toolkit for entrepreneurs and HR professionals alike, guiding you through the intricacies of tough leadership decisions with grace and legality. 

Key takeaways from this episode are -

• Terminating an employee is an unpleasant aspect of leadership, but it is a responsibility that leaders must handle.
• Being prepared and planning ahead is crucial before initiating the termination process.
• Termination conversations should be conducted in a private and neutral setting, with empathy and professionalism.
• Clear and compassionate communication is essential during the termination process.
• Logistical details related to termination, such as the return of company property, should be addressed professionally.
• Following up with the remaining team members and providing transparency can help maintain morale and cohesion.

Share the journey with colleagues and tune in for more insights as we continue to navigate the entrepreneur to employer journey together.

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Transcript

Speaker 1: 0:07

Welcome to the Entrepreneur to Employer podcast. I'm your host, brian Montes, founder of Scalocity Works, and the Entrepreneur to Employer coaching and membership community. So congratulations is in order. If you've built a successful freelance business that has grown to the point where you need to hire, you have achieved a huge milestone. If you're already past the point of making need to hire and you have achieved a huge milestone If you're already past the point of making your first hire and your team is now growing well, congratulations is in order to you as well. So, regardless of where you are with scaling your team and your business, whether you're at employee number one or employee number 100, this podcast focuses on everything related to people operations. We'll cover best practices, strategies and solutions to help you build a sustainable and scalable business that is fueled by great people and a great culture. So if you're enjoying listening to this Entrepreneur to Employer podcast, please subscribe, give us a like and give us a review. Your feedback will help us grow this podcast and we'll be able to positively impact more employers to help them build better work environments environments.

Speaker 1: 1:13

Welcome back to another episode of the Entrepreneur to Employer podcast. I am your host, brian Montes, founder of Scalocity Works. All right. So what I want to talk about today is the very unpleasant topic of terminating an employee when we are a business owner or when we are a leader in a larger corporation and we lead a team oftentimes we are. I don't know anybody that has ever gone through their entire career without having to fire an employee. It just is. It's just an unpleasant aspect of the job, but as leaders, we have to take the good with the bad right. In a leadership role, we get the benefit of seeing people grow, develop, we get the benefit of seeing our team excel and oftentimes, in that leadership role, we get the credit for that, even though the credit should also definitely go to the team members that are executing, coaching and learning and growing. But with that being said, the downside to leading people is that there are times where people are not going to meet the expectations, they're not going to be coachable, they're going to have a myriad of soft skill issues that just cannot get improved upon and at some point they are going to be terminated. And as a leader or as a business owner, it is your job to not only make that decision but to execute on it and handle the termination. You know we shouldn't be dumping our terminations off on the HR right, just because we have an HR department or we have an HR consultant doesn't mean that we should call them when it's time to do the termination and say, here, terminate this employee for me and you walk away. You know scot-free and and and avoid of any of the stress that goes with it. Right, hr can be there to support you, but they shouldn't have to do this for you. It is a responsibility of being in a leadership role.

Speaker 1: 2:56

Now, there are, of course, as with anything, better, better ways to handle things. Right, so there are best practices to how we handle a termination. And how we handle a termination can actually change the trajectory of the conversation. Right, I have terminated people before and done it in such a manner that we end up being colleagues years later. Right, we talk, you know, we keep in touch, they tell me how they're doing that. You know things have gotten better. They've taken some of that advice from that experience and implement it in their lives. So you absolutely can handle a termination conversation in such a way that it creates a positive outcome.

Speaker 1: 3:37

And then, of course, you can also handle a termination conversation in such a way that creates nothing but turmoil and headache for you in the business. So let's talk about the five best practices that you can do as a business owner, business leader, to terminate an employee the right way. Number one be prepared and plan ahead. Everything we're going to discuss today really is all about taking a proactive approach to this situation, right. None of this should be done on the fly, so number one is be prepared and plan ahead right. So before you initiate that termination process, make sure that you have documented the performance issues and that you have a track record of what's going on. If the employee that you terminate is surprised to hear about the issues and that the termination conversation is the first time they're hearing about this issue, or hearing that you're unhappy, or hearing that they're not meeting expectations, then you as a leader have failed. I'm going to repeat that one more time because it's very important that you hear this If the employee is surprised by what they are hearing at the termination conversation, you as the leader have failed. Employees shouldn't be caught off guard when they are fired. Now, granted, there are some exceptions to that, such as mass-wide layoffs that are due to black swan events, things like that, but for the most part, employees should not be surprised when they are fired or terminated for cause. They should know this is coming. It should not be a shock to them. So before you terminate before you just make the decision to terminate you need to make sure that you have done a good job of coaching, providing feedback, working on performance, helping them succeed and documenting these issues performance-based issues all along, so that there is a nice paper trail and that that employee is not surprised.

Speaker 1: 5:33

I'm going to give you a quick story about the situation I had with a client. They were a multi-location restaurant unit and the GM called one night and said that he wanted to terminate a server. And the reason that he wanted to terminate the server is because the owner wanted her terminated. And the owner wanted her terminated because his wife and her friends had gone into the restaurant for dinner that night and the server had been disrespectful to his wife. So the GM was hot and heavy to terminate her on the spot. My first and only question was have you ever had performance issues with her before? The answer was no. She had a clean file. She had never been written up. She'd never even had a verbal warning on anything. She hadn't been late for work. Up until now her work ethic had been great.

Speaker 1: 6:20

So to go from zero to 60 and to terminate this server with basically no cause for one incident that wasn't egregious she wasn't stealing, you know, there wasn't anything that was super egregious that night to warrant termination very well could have led to some negative consequences for the company. So after the GM calmed down and we rationally discussed pros and cons, he decided it was not in his restaurant's best interest to terminate the server based on this one action. For all he knew she was just having a really off night. She might have had a fight with her boyfriend. She might've gotten into a fender bender on the way to work off night. She might've had a fight with her boyfriend. She might've gotten into a fender bender on the way to work. We don't know what was causing her behavior that night, but it certainly didn't warrant termination. It just happened to be that she was disrespectful to the wrong person that night. So once the GM took a step back and thought about this, he decided I'm not going to terminate her. I'm going to tell the owner why I'm not going to terminate her and we are going to just have a counseling session with her and figure things out. Ultimately, the server was having a really bad day and she'd had some stuff going on in her life and ultimately she actually apologized to the owner's wife about her behavior and her disrespect that night when she dined at the restaurant. So, and since then that server has continued to do a great job.

Speaker 1: 7:39

So make sure that you know you are prepared and you are not making termination decisions based on emotion, right, consider logical details about why the performance are an issue, have those coaching conversations and build a roadmap up to termination. So that is what you need to do to be prepared and plan ahead if a termination conversation is going to be the final result of issues. Number two make sure, before you set the meeting for termination, that you choose the right setting and approach. You need to conduct the termination meeting in a private and a neutral setting to maintain the employee's dignity and confidentiality. You don't want to fire somebody in front of all their coworkers. It's not designed to embarrass them. It's not designed to humiliate them. This conversation needs to be held in private and it needs to be held away from the other employees, and make sure you approach the conversation with empathy and professionalism. You need to acknowledge the difficult nature of the situation. But you also need to remain very firm and decisive in the decision, right, don't backtrack on the decision, don't waver right, don't question yourself throughout the process. And one last tidbit on this is avoid holding the meeting on a Friday, or on a Friday or before a holiday, right, it's just going to make their weekend miserable. I like to do these type of conversations on Wednesday. It's midweek, gets them out of the office the rest of the week and it gives them the Thursday Friday kind of process what's going on and figure out their next step. So I personally like Wednesdays as a day to do these conversations. One last bonus tip, and this goes back to you know the fact that once you make the decision to terminate, you cannot backtrack. The worst thing you can do is sit down with an employee, make the move to terminate and allow them to talk you back into one more chance.

Speaker 1: 9:32

When I was early days working for a Fortune 500 company and I just stepped into a management role, I went to terminate my warehouse manager and I allowed him to talk me back into letting him have a second chance, and he'd already proven to me that he couldn't do the job, couldn't get to work on time, couldn't manage our inventory. I mean, I had a host of reasons to let him go. They were all of them were hurting me as the new manager and they were all hurting the P andL of the branch and they were hurting the fellow employees and I had every reason to let him go and I chose not to. I caved and I gave him that second chance and all I did was make it worse. Over the next eight weeks, our inventory issues got worse. He kept showing up to work late and we continued to have bigger and bigger problems with all of our inventory and our warehouse management. And so, eight weeks later, I was forced to still revisit this and move forward with terminating him. So all I did was prolong our pain by eight weeks by not being decisive and by allowing myself to get talked into one more chance.

Speaker 1: 10:36

So don't do it. Once you've made the decision to terminate, you've got to stick with it and you got to see it through. Number three communicate clearly and compassionately. Clearly communicate the reason for the termination. Now you do not need to go into great detail, you simply need to cite. You know we have these counseling sessions on this day and this day regarding your numbers, or regarding attendance, or regarding, you know, whatever the, whatever the business case is right, and this is the reason because you have not been able to improve upon this, I have no choice but to let you go right. So provide this specific example and be done with it. Don't get into great detail, don't make it a back and forth dialogue. It's not a discussion point. It is strictly you providing them with the reason, and continue to express that empathy and understanding for their feelings, but maintain the focus on business needs, expectations and that being the root cause of the termination. And then, of course, you know, get that paperwork processed and make sure you're giving them all the necessary paperwork that they need, whether it's COBRA paperwork, paperwork for unemployment insurance. Make sure you have all of that documentation there and, of course, make sure, especially if you're in California, you have their final check ready.

Speaker 1: 11:47

Number four handle logistically, professionally, address logistical details related to the termination, such as the return of company property. Of course, that final paycheck again benefits all of that right. So be ready to address all of that right. So be ready to address all of that right. Get, get through the reason for the termination and then move into the logistics of the termination return of a company, a laptop, return of keys right, get that equipment back and make sure you are giving them the paperwork that they need to have as well. You know and ensure you know, make sure the employee understands that as soon as this conversation is done, they are done working for you so you can either walk them out of the building or, if it's done via zoom, they're done for the day right. So make sure they understand the timeline, that the termination is effective immediately.

Speaker 1: 12:34

Last but not least, this goes to the team and not the employee being fired. Follow up and support the remaining team members. You've got to remember that when something happens within an organization, we as human beings. If we don't, we're not told what's going on, if we're not provided with insight, we will start to draw our own conclusions. We will talk amongst each other, we will come up with our own theories, we will develop our own storyline. So it's better for you to get ahead of this and communicate with the team. So, after the termination, follow up with the remaining employees.

Speaker 1: 13:18

The employee was fired, you know. Make sure you honor confidentiality, but you can let them know that. Hey, you know John's no longer with us. You know we, you all know we had some issues with meeting X, y and Z with him. The company's made the decision to part ways. Here's how we're going to move forward right, make sure your team understands that this person was let go for cause. There was a business reason, a business case, and chances are they're going to know already. Right, because if that employee is underperforming, they're going to feel the pressure of them underperforming. So chances are they're already going to know. But it's up to you, as the business leader, to reinforce this and provide transparency as to why this person was let go, so that they know hey, they were let go for cause. It's not, you know, some random layoff. Things are still going in the right direction. I still have, you know, there's still some level of psychological safety here at work. You know they need to be very clear as to why their colleague was let go. So be proactive in that step, because that's going to help with morale, it's going to help with cohesion. It's also going to allow you to work with the team to move forward.

Speaker 1: 14:20

Now that John is no longer with us, how do we move forward? Do we need to replace the role? Can we spread the duties out. What do we need to do to move forward? That's the crux of the conversation is making sure that the team understands this is done. John is no longer with us. It's time for us to move forward. So follow up with the remaining employees, have that conversation and move the team forward Now. Follow up with the remaining employees, have that conversation and move the team forward Now.

Speaker 1: 14:47

If you follow these best practices, it will become much easier for you to navigate the difficult process of terminating the employee, employee, employer employee relationship. You'll do it with professionalism, you'll do it with empathy and you will do it with respect for all parties involved. And when you do that, you lower the risk of any problems coming from the termination process itself. So I hope you learned something out of today's podcast. If you did, I'd appreciate. If you'd like and subscribe to the podcast.

Speaker 1: 15:10

Leave us a review, leave me some comments. I love reading the comments and we use the comments to get better each and every time. And if you have a colleague that you feel would benefit from this particular episode, do them a favor, grab a link to the show, text it over to them and say hey, I just listened to this episode on the five ways we can terminate an employee correctly. I think you'd benefit from it and share this episode with them. The more you share this podcast, the more businesses we can help improve their people operations. So, all right. That concludes today's podcast. Hope you enjoyed it and we will see you next week on the entrepreneur to employer podcast.