If you haven’t had the displeasure of firing an employee yet, congratulations! If you’re contemplating letting someone go or think there is even the slightest possibility it could happen in your future as a small business owner, you need to read this article first.

Knowing When It’s Time

Lots of small business owners put off firing an employee for as long as possible. There are a couple of reasons why. First of all, firing someone is never a pleasant or enjoyable experience. Second, firing someone means admitting that you made a mistake in hiring them in the first place, and that can be a tough pill to swallow.

Lastly, small businesses owners and employee often share a sense of family when working together so closely, and that doesn’t make firing someone any easier. Still, there comes a time when termination is the best thing for the business and the employee, and you are left with no alternative.

Minimizing the Damage

If you have to fire someone, be sure to protect yourself and the employee by asking another partner or manager to be present during termination. This is most important when you are dealing with an employee that may become hostile, but it’s a good idea regardless of the situation.

When you inform the employee that they have been fired, be as respectful as possible. It’s not generally a good idea to let an employee go at the end of the workday or wait until five o’clock on Friday to break the news. Both the employee and other coworkers are likely to take this negatively, thinking you are getting the most work possible from them before letting them go. That’s never good for morale.

Tell the employee the news in a private office or room away from other workers. Many HR professionals also recommend giving the employee contact info for local employment resources agencies.

Watch What You Say

The best way to handle a firing is to be direct. Keep it short and sweet, because saying too much could have legal implications you’d rather avoid. HRPeople recommends writing down your statement in advance and filing the document in the employee’s personnel file.

All you need to do is simply explain that the employee’s skills are not a good fit for the position and explain that that is why the termination is necessary. Some employees will have follow-up questions, though. You may want to be prepared to field the following:

  • Will you provide a reference?
  • Will I be offered severance pay?
  • What did I do wrong?

In a situation where you feel badly for the employee, you might be tempted to make apologies to lessen the uncomfortable nature of the situation. This is a bad idea. Apologies can be taken wrongly, leading the employee to think you are unsure of your decision. Statements like, “I know how you must feel” and “this is hard for me too” are callous at best. They might make you feel better, but they do absolutely nothing for the employee.

Finally — and this should go without saying — avoid firing someone by email. You should always deliver the news in person.

The Legal Issues

Terminating an employee can lead to a legal battle if you’re not careful. To avoid a lawsuit, it’s best to adhere to your employment policies consistently and fairly from day one. The best way to do this is to publish an employee handbook and have all new hires sign that they have received and read the contents of the handbook.

When an employee fails to meet any policy, document it and discuss the issue with the employee. A written record should be kept in a confidential employee file noting the date of the occurrence and a description of the problem. That way, if the fired employee alleges any charges of discrimination after termination you have a record of the reason you let him or her go.

Never, under any circumstances, make up a fake reason for termination when you are firing someone due to poor performance. You may think you are being kinder or protecting the employee’s ego by coming up with an alternative reason to let them go, but lying about the real reason can open you up for claims of discrimination that could land you in legal hot water.

It’s true that sometimes firing an employee can be a sticky situation. If you have concerns at all, your best course of action is to contact an attorney for legal advice.