When Is It Time To Let An Employee Go?

Letting an employee go can be one of the most troublesome tasks business owners face. You’re willing to work with people, but at some point the effort you expend outweighs the benefit to your business. So how do you know what the tipping point is and when it’s time to act? Consider these signs that it might be time to let an employee go.

Sign 1: Consistent, poor job performance.

The decision to terminate an employee carries a lot of emotional baggage, especially if you like the individual or they’re a relative. That’s why it’s important to focus on their job performance. Do they consistently meet the expectations you set for them?

This assumes you have clearly communicated what you expect and shared how well they’re performing these duties. Measurement is key here. You want to be able to objectively demonstrate there’s a pattern of not meeting goals. If you can’t, your judgement becomes more subjective, and that introduces the emotional element. A history of poor performance is a red flag and requires action.

Sign 2: Attempts at coaching have failed.  

Poor performance is a symptom of trouble. But the inability to improve can be a fatal diagnosis. Chances are you made a significant investment in hiring this individual. Having to find a replacement requires another one. So you want to salvage your investment, if possible.

What have you done to treat the symptoms? It may be the employee doesn’t understand what’s expected or you need to provide some training. Some business owners conduct regular one-on-one sessions with each employee to uncover these issues. Jointly, you’ll want to come up with a developmental plan that identifies what improvement is needed and a date by which you expect to see results. If you’re still not seeing improvement after repeated treatment, it may be time to pull the plug.

Sign 3: Other employees have to pick up the slack. 

The expression “one bad apple can spoil the whole bunch” can apply here. A poor performing employee can have a negative impact on other staff members. They may be doing more without any additional compensation. That inequity can take a toll on morale, job satisfaction and their own job performance. It can also impact retention.

Monitor the impact a poor performer is having on other team members. Look for patterns of unresolved interpersonal conflicts. If it’s spoiling their effectiveness, it may signal it’s time.

Sign 4: They’ve committed a serious offense.

There are instances when it’s clear you need to terminate a staff member’s employment. Offenses like theft, harassment, illegal activity, or workplace violence can be grounds for automatic dismissal.

These should be identified in your employee handbook and communicated in your onboarding process. It’s part of defining the culture you want to create for your business.

Sign 5: Customers are complaining.

This might be the loudest signal that it’s time. Loyalty 360 reports that 86 percent of customers will stop doing business with a company because of poor customer service. And that doesn’t account for the damage caused when they tell friends and family about it. That’s a bottom-line issue for your business.

Take customer complaints seriously, especially when the common denominator is the same employee. Coaching may help resolve the problem, but you would expect to see more immediate results. If it cannot be quickly resolved, it’s a clear sign to act, before further damage is done.

It’s stressful to let an employee go. But it shouldn’t prevent you from protecting your business interests. Use these signs to help identify problem areas early. Doing so will help you recognize your tipping point and take the action you need to ensure the continued health of your business.