How to Know When It’s Time to Fire an Employee

Charlette Beasley

Charlette is a writer and content strategist in Florida. She writes payroll content for Fit Small Business and helps her own clients create industry-specific copy for their business. In addition, she loves “beaching” with her two kids.

Knowing when to fire an employee or give them more time to grow and develop can be tricky. If you terminate a new hire too quickly (for example, in response to their first minor mistake on the job), you run the risk of losing a potentially good employee in addition to the resources used to bring that employee on board. On the flip side, if you avoid firing an employee who is not a good fit for the company, you could risk much more—positive work culture, customers, and reputation.

Angry customer arguing with an employee at a cafe

Determine unacceptable behaviors in the workplace

When determining whether to fire an employee, it’s best to consider your deal breakers. Deal breakers are actions you deem unacceptable that result in automatic termination. If an employee displays a behavior you deem unacceptable at any point in time, you should fire them immediately, whether they’ve been on the job for 10 days, 10 months, or 10 years.

Some workplace behaviors you may include on your list of deal breakers are as follows:

  • Stealing merchandise, money, or time 
  • Violence
  • No-call, no-show
  • Disrespecting customers
  • Destructive to company culture

If you have an employee handbook (which you should consider creating if you don’t yet have one), be sure to list all deal-breakers and their consequences (immediate termination). This will help to protect your company in the event that you’re ever sued for wrongful termination (which isn’t likely if you’re in a right-to-work state). 

Decide at what point you’ll fire an employee

The decision on whether to fire an employee isn’t so cut and dry when their actions aren’t an automatic deal-breaker, like when a new cashier doesn’t enter the correct food order. Then again, small mistakes can add up to larger ones over time. Although firing an employee for such a mistake during their first two weeks on the job may not make sense, considering whether to keep them on the team when it’s a regular occurrence after nine months of employment is another story.

Here are some warning signs that may alert you to review an employee’s performance:

  • Customer complaints
  • Coworker complains
  • Unengaged attitude
  • Lack of drive
  • Receiving bare-minimum work

An incompetent employee can result in negative reviews of your business, damaging your reputation and discouraging new potential customers. Ultimately, if the cost to keep the employee is more than the cost associated with onboarding a new employee, then it may be time to consider termination. 

User performance reviews to chronicle behavior

Before firing an employee, it’s important to review their previous performance reviews to see if you recognize any patterns. Performance reviews are assessments that managers make regarding how well an employee is performing; at the very least, they usually include a review of their goals and how close they are to meeting them and a list of feedback the employee has received over a period of time (both positive and negative). 

If your employee makes a mistake that impacts the company’s image, like giving customers poor service, figure out if they’re repeatedly having the same issue. If it’s a one-off case but you’d like them to work on it a little more, casually address it during your next meeting with the employee.

Issues that occur often require a bit more attention. While it’s not necessary to terminate someone for making the same mistake twice (or five times), you can issue a verbal warning. If the employee blows off your comment and doesn’t make an effort to improve, you should take it a step further and issue a written warning. If that’s disregarded as well, you should consider firing the employee.

Come up with an improvement plan

Employees who aren’t producing or are lacking in some significant area may need to be placed on an improvement plan. This is a good alternative to firing an employee and can give them a chance to improve their work before being terminated.

As a manager, it’s important that you figure out why an employee is not performing well; sometimes training is the missing ingredient. To be certain of what your employees need, you must invest the time to build a relationship with them; this builds trust, which is a necessity for any manager-employee relationship. In turn, the employee must learn to cooperate with you. If you’ve done your part in building trust, assessing the employee’s needs, and helping to bridge any gaps to no avail, then you should consider if they are the problem.

The decision to fire an employee depends on many factors. It’s important to have reasonable performance expectations given your experience hiring and onboarding new employees, so you don’t fire someone before truly giving them a chance. You should also avoid keeping employees who are clearly not a good fit for the company—for instance, if they have shown unacceptable behaviors in the past or are taking too long to get up-to-speed on the business. 

You should review previous documentation on the employee’s performance to see if you recognize any good or bad patterns. It might also be a good idea to solicit another manager’s perspective. Firing an employee can have many repercussions, so it’s best to be sure it’s a necessary step before you do it.

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