How to Know it’s Time to Fire Someone

Author: Christina Galoozis Date: May 24, 2010

It’s a subject no one wants to bring up, but every small business owner wants to talk about: firing. So says Barry Moltz, a Chicago-based small business consultant and author of several business books.

“Wherever I speak, every small business owner in the audience has that one employee they know shouldn’t still be on the payroll,” says Moltz.

Why Small Business Owners Put Off Firing

Most small employers put off firing employees because it makes for a very uncomfortable meeting. Plus, you are admitting to yourself and others that you made a mistake in hiring that person. And once you do it, you’ll have to start the hiring process all over again. Those aren’t exactly strong motivators.

Perhaps they’re the reason for a low number of terminations at small firms. In a 2007 NFIB poll, 27% of small employers said they fired someone that year, and half of those respondents only fired one person.

“As a small business, we become a family,” says Mike Walker, owner of interactive marketing agency WalkerTek in Fairfield, N.J., echoing a common sentiment. Walker says in the company’s 10 years in business, he has had to fire three people.

One employee, Walker says, wouldn’t cooperate with his supervisor—even after several warnings. “Finally it reached a point where it was affecting other employees, so we had to let him go,” he says.

Negativity is Poison

When a bad attitude trickles to other employees, that’s one good indicator it’s time to fire someone. Another warning sign: a perpetual negative attitude.

Gina Behr, an NFIB member and owner of an in-home healthcare franchise in Kenosha, Wisc., says one of her former employees was always instigating arguments just for the sake of debate. After a blow-up over the employee’s refusal to take her turn as the weekend on-call person, Behr says she fired her. “About two days later, the office was drama-free, and morale was so much better,” she says. “[It was] worth paying the unemployment [insurance].”

The Cringe Factor

If these examples don’t strike a chord, consider Moltz’s governing principle for knowing it’s time to give someone the axe: the cringe factor. “It’s time to fire someone when every time you write that person a check, you cringe,” he says. And aside from obvious reasons for firing—like lying, cheating and stealing—here are Moltz’s other, not-so-obvious reasons to let someone go:

  1. If the employee doesn’t show up on time or starts missing work fairly soon after they’re hired. 
  2. If their performance in the first 30 days is not to your satisfaction or expectations. “People’s behavior tends not to change beyond 30 days,” says Moltz.
  3. Your other employees have a difficult time getting along with the new hire—and it’s directly affecting the performance of everyone involved.
  4. You’ve had to teach them a skill they listed on their resume.

 Above all, don’t put it off. “It only gets more difficult and worse,” says Moltz.

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