When John Smith was promoted to regional sales manager at a multi-national consumer packaged-goods company last fall, he knew his new job wasn't going to be easy. The division he was put in charge of was struggling, and hadn't met its revenue targets for the past three quarters. So Smith (not his real name) poured hours of effort into boosting morale and brushing up his sales team's skills, helping colleagues through tough negotiations. His dedication paid off: thanks to Smith's efforts, his division came in on budget for the quarter. Nonetheless, a mere three months into his new gig, orders from above forced him to lay off the majority of his staff. “I had them working 18 hour days,” Smith recalls. “They were working really hard. And they were doing well. We made our numbers.” But broader corporate considerations meant management decided to restructure, and Smith was left with the unenviable task of giving his team the boot. “Managing people is the hardest thing I've ever done,” he says. “Firing them is the second hardest.”
Donald Trump's long, pointed finger and brusque delivery of the phrase “You're fired” on The Apprentice makes it all look easy. In truth, though, laying somebody off can be stressful and complex. Not only are there legal considerations–wrongful dismissal suits can be incredibly costly–there are personal ones, too. “Sometimes the worst are executives,” says Richard Deems, president of WorkLife Design, a Scottsdale, Ariz.-based organizational effectiveness consultancy and author of I Have to Fire Someone! “[They] take weeks worrying about it before they fire someone. They waste time, energy, the company's resources–and they really don't help the person who is going to exit.”
Sometimes employee behaviour is so egregious, or the business climate so bad, that it's obviously time for a pink slip. When it's time to consider bringing down the axe, experts say, you should use the following guidelines to ensure a clean cut.
1. Must you fire the person?
Weigh your options carefully. As John Oesch, assistant professor of organizational behaviour at the University of Toronto's Rotman School of Management, points out, when you get rid of someone “if they are causing problems, you're getting rid of the problems, but if they have knowledge and information and contacts, you're getting rid of those things, too.” It's expensive to hire and train staff, and if you can turn somebody around, it's usually worthwhile.
What's more, there's actually a legal imperative for employers to work with their staff to overcome difficulties. “Many times, employers think, 'You didn't follow the rules–you're out,'” says Toronto-based labour lawyer Martin Rosenbaum. “But that's not right.” Just cause for firing someone often requires more than a one-time mistake. In the eyes of a judge, a legitimate reason to be perturbed with an employee is not necessarily a legitimate reason to whack them. You ought to issue a series of warnings to the troublesome staff member–memos that officially outline the delinquent behaviour and indicate that, if it continues, termination is a distinct possibility.
2. Get behind closed doors
Once you conclude an individual has to go, it's important to do the deed in person in a private room, where other employees can't watch. Having a witness present is also a good idea–generally the immediate manager as well as one other manager will do. Timing is also key: the courts don't look kindly on employers who fire people while they are on sick leave or on their first day back from vacation.
Avoid letting someone go on a Friday afternoon. You're just opening the floodgates to unchecked rumours. “If you fire on a Friday late afternoon, you can count on people getting on the phone and starting to talk,” cautions Deems. “When you get back on Monday, you might have a workforce that is really upset. So I prefer firing earlier in the week and early in the shift. That way, the manager has a chance to keep track of what is going on.”
3. Avoid phrases like, “Get out of here, you lazy good-for-nothing!”
Not preparing what you will say is a common but critical mistake. You should be sensitive. Research shows that a really thorough explanation is going to ease the pain, and help the fired person feel the process is fair. Writing out a script beforehand is one good method of keeping your vocabulary on track.
Providing the dismissed employee with an opportunity to ask questions is equally important. Be careful, however, not to be drawn into an argument about your decision. If the fired person demands to speak with a higher-up, assure him that he'll get an opportunity, while stressing the decision won't be reversed. Sometimes, repeating the message dozens of times is the only way to make it stick.
4. Money talks
Whether fired for being a bumbling fool or merely because the business is going through a rough patch and needs to downsize, almost everybody is entitled to some form of compensation. The dollar value that one receives, however, can vary dramatically. If a worker belongs to a union, its collective agreement tends to dictate the terms, and sorting out what's owed is straightforward. If an employee is not a union member, however, compensation guidelines become much murkier.
A decent jumping-off point, says Rosenbaum, is one month of notice or pay-in-lieu for each year of service. Then, depending on what the worker's duties were–as well as how old he or she is–compensation might go up or down. For example, if someone is 25 years old and worked at a firm for five years in a clerical position, he may only deserve four months' notice. A senior manager in her 50s who provided 25 years of dedicated service to a corporation may be entitled to a lot more– perhaps six weeks' notice for every year worked.
The confusion around determining what to offer is complicated by the fact that, in most circumstances, provincial governments only require employers to offer one week's notice for every year worked, up to a maximum of eight weeks. That's a lot less than what the common law, enforced by the courts, dictates, however. So if employers rely on information gleaned from a phone call to the provincial ministry of labour, they may wind up offering far too little. It's a common mistake, and often the reason an employer ends up in court over a firing.
While nailing down severance packages can be difficult, it's wise to be flexible. “Any time people feel they are participating in something,” says Oesch, “they will rate that process as being a bit more fair, a bit more just.” Allow people who are being fired to choose from a menu of options. Do they want a lump sum? Would they prefer to keep their benefits? Perhaps they want less cash and more help finding a new job–or vice versa.
5. Above all, be respectful
The general rule is, don't do anything that will embarrass a terminated employee. Anticipate what his or her reaction will be, and try to prepare for likely scenarios. Angry outbursts are unusual. “Most of the time people know it has been coming,” says Oesch, “so it is pretty rare that somebody would react negatively.” Armed security guards escorting an employee to the front door are generally unnecessary–and can wind up costing you dearly if a court finds you besmirched someone's reputation by marching them out of the office under a cloud of suspicion.
Don't forget that people talk, and if a firing is handled unprofessionally, a public-relations nightmare can ensue. “If it is not done well,” warns Deems, “you have the potential to have a lot of people talking negatively about the organization.”
Remember: layoffs don't have to be all doom and gloom. Jerry Enchin recalls that during his time as manager of policy and research for the Saskatoon city planning department, he had to fire a young woman who was working as junior planner. “She was, of course, initially very upset,” Enchin says. “But a couple of weeks later, she came back and thanked me very, very much. She had got involved with an advertising organization–and found the fact that we caused her to look for a new job as really great.”