How to fire efficiently and professionally.

1. How to Fire
Hire Slowly, Fire Fast
This presentation is made possible by the support of the American People through the United States Agency
for International Development (USAID). The contents of this presentation are the sole responsibility of Rick
Rasmussen and do not necessarily reflect the views of USAID or the United States Government.

2. Why fire?
• When people aren’t pulling their
weight everyone else in the team
knows it
• Almost universally your staff will
say:
– “Thank you, that person needed
to go.”
• Side benefits:
– You free up much needed budget
– You free up the org chart to bring
in new blood
– Your team is grateful

3. Firing
• Don’t be afraid to fire someone
– It’s part of the natural selection process
– No company has spare capacity for dead weight
• Direct quotes from CEOs:
– “I have never regretted firing anybody. Not once.”
– “I have always regretted not firing somebody quickly enough”
• If you know, you know. If you know, do it now

4. Hope for the Best … Prepare for the Worst
Protect in
advance
Not working
out?
Day of
event
Offer letter is clear
on responsibilities
and compensation
Advance notice of
non-performance
Reviews in writing
Hope for best,
expect the worst
Everything in writing
Exit package
explained
Get them out as soon
as possible
Rights and
agreements in
place

5. For New Employees or Contractors
• On first day – everyone must sign:
– Offer letter
– Confidentiality agreement
– Invention assignment agreement
• Under proper circumstances
– Employment or Consulting agreement
– Stock option agreement
• These outline rights during employment and protect you
during termination

6. Firing varies by status
• Simple: Contractors
– Terminate them per their contract
– Pay them off. Done.
• More difficult: Employees
– Agree on vesting, be fair, pay them off ASAP
– Likely no legal action required
• Very Difficult: Co-founders

7. Nice Way…
• Be honest tell them
specifically what did not work
out
• Constructive feedback
– How they might think about the
situation at the next company
• Chances are they knew in
their gut it wasn’t working and
will appreciate the candor

8. Formal Firing
• The key goal is for the the company to be protected
against:
– Potential lawsuits
– Potential damage to morale and culture
• Tribalism
• Keep your team intact
• Make sure that others don’t follow this person out the door
• Go through the three step process

9. Three Step Process
1. Give written notice for non-performance
– Corrective actions needed to get better
– Make them achievable or not
– Present this to them in person with a witness, usually HR
2. Review performance against corrective actions
– Everything in writing
– Why they did or did not make those goals
– Present this to them in person with a witness, usually HR
3. Give formal notice

10. The Event…
• A written letter is presented in front of a witness
– Optional termination agreement for them to sign if IP or
confidentiality is an issue
• Give them the option to resign or be fired
– Key for unemployment insurance, etc.
• Explain company policy for post-employment insurance
(e.g. COBRA) and other benefits
• Ask them to collect their belongings and walk them out

11. This is not easy for them…
• Do it early or last part of the day
• Have them collect all belongings,
computers, files, etc.
• Walk them out and wish them well
• Be dignified and respectful
– Don’t take pride in letting somebody go
– Respect who they are and appreciate
what they’ve done
– Don’t be a jerk

12. Immediately inform staff
• Call a staff meeting or send out brief email
– Stops rumors and lets everyone get on with business
• “This person no longer works for the company”
– No reason needs to be given
– Be professional and respectful
– If the person is senior, you may have to do some damage
control
• Most people will “understand”

13. Severance Requirements?
• Holdover from Government and Union jobs
– They need to stay in the job for x weeks after notice
• Keep them out of the building if at all possible
(poison)
– Hand over all files
– Restrict access to corporate netwoks as much as possible
– Have them complete specific limited-term and measurable
homework assignments
– Pay them as late as possible as they vent to others or via
social media
• No need to tell other employees out of respect. This
person is “On another assignment”.

14. Termination “with cause”
• Someone that has broken policy,
broken laws, etc.
• Immediate termination:
– Prepare a notice letter (attorney
reviewed) to hand them on the spot and
signed now
– Prepare final payment and hand them
the check
• Collect their keys, computers, drives,
etc.
– Walk them out of the building
immediately
– Close out all passwords and online
access (IT alerted in advance)
– Archive all email and account access

15. Co-founders
• Never nominate anyone as a
co-founder unless you absolutely need to
• Firing a co-founder is extremely painful
– Like a bad divorce
– Exits will be nasty, they will negotiate and expect a lot
• Get a lawyer involved because there may be issues
– Time is more important than money.
– Get rid of them as soon as possible

16. Hiring and Firing sets your Culture
• You work hard and expect it of
others
• Make sure people know it’s a
meritocracy and the best staff will
rise to the top
– We’re thankful for their contribution
but it’s time to move on
• Your team will appreciate your
decisiveness and actions so long
as you’re fair
• Fired…!