Firing a Long-Term Employee is Hard — But It's Necessary. Here's Why.
Firing a Long-Term Employee is Hard — But It’s Necessary. Here’s Why.
I consulted a client who had to do something they had never done before — they had to cut a long-term employee who had been with the company for over five years. Once an employee has been with a company for that length of time, they have become “family,” which is the equivalent of cutting your “brother or sister.”
Most employees who get to five years of service must have been doing something right during their employment; otherwise, they wouldn’t have lasted that long. But things can change. In this case, the employee was no longer a high performer; they had quickly become a poor performer, causing broader challenges for the business, as described below. This post will teach you how to handle situations like these and why cutting your “brother or sister” may be your only option.
A little background
For the purposes of this article, let’s say the employee here is named James. James was part of the sales team. He started out of the gate slow in his first year, but he quickly picked up steam with training and effort in his second year. He was a high-performing salesperson for a couple of years straight. James loved his job and the company, and the company and his peers loved him.
However, something happened in year five; his sales levels were cut in half of the previous years, and there were much higher instances of clients becoming very upset with James for lack of responsiveness and for making mistakes on their projects. So, revenues were down, and customer complaints and required fixes were way up, which meant the rest of the team needed to step up and fill that void. Many conversations would happen with James, trying to get him to improve his performance, and each time, he said he would try to get better and that it would never happen again. After a year of underperformance and repetitive missteps by James, the company finally hit its breaking point and terminated James. So, here are a few lessons out of this story.
Employees can change
Good performers can go bad. Bad performers can become good. People are humans, and things are happening in their everyday lives. Maybe their health goes bad? Maybe their kids are becoming a bigger burden? Maybe they are caring for ailing parents? Whatever. Just because you had a good performer doesn’t mean they will stay one, and you need to reassess their performance as if the clock was starting new every quarter. Which can be hard for employees you have grown very close to over the years.
Cutting friends is hard, but sometimes you have no choice
In this story, James was integrated into the company’s fabric, and everyone liked him well. This brought him some leeway in terms of a runway to fix his mistakes compared to a brand-new employee with no history with the company. But you can’t let your friendship with an employee blind you to his performance. Your brand is getting tarnished with negative reviews. When your fellow staff are complaining, your credibility as a manager is questioned as to why you continue to let this poor performance happen (as it directly impacts the rest of the team’s day-to-day job cleaning up his mess). Make the tough decision and part ways sooner rather than later. In this case, resolving the situation should not have taken over a year.
Unpunished poor performers get increasingly bold the longer they get away with it
If you set a line in the sand, and the employee crosses it, you must live by your word and take action. In this case, the line was established, and James crossed it on three separate occasions, but he continued to keep his job. All that did was encourage James to believe he would never get fired, regardless of his actions, and he continued in his old bad ways, as he believed there was no real punishment coming his way. And, when the punishment finally came, a year late, he was pretty much in shock that it actually happened. So, if you set a line in the sand with an ultimatum, in terms of the expected performance of a staff member required not to be terminated, you need to live by it if that goal is not met.
Never lose your credibility with the rest of your team
The longer you let a “bad apple” stay with a company, the higher the risk that the employee spoils the “whole bushel” and has everyone looking for the door. Employees want to work in reasonable working environments, and repetitively doing extra work to put out other employees’ fires is not desirable for anyone. Employees want to work for a boss they can trust to do the right thing, even if it means making hard decisions. They are looking to you as the leader to help them “put out the fire” created by other bad employees.
The economic impact of keeping a “bad apple” employee
In the case of James, his sales dropped to half of the rest of the sales team. That was worth about $500K in revenues and $50K in company profit per year. That is not an insignificant amount that a replacement salesperson could have retained. The economic impact of hundreds of upset customers spreading negative reviews online or to their peers could be worth 3-4x this amount.
You gain 2-3 customers from positive word of mouth, and you lose 8-10 customers from bad word of mouth, as customers are much more vocal when they are upset than when they are happy. So, when you add those two factors up, lost sales plus lost prospective sales, this had a $200K-$250K bottom-line impact on this business. That’s why you need to take action sooner rather than later.
So, hopefully, none of your long-term high achievers will turn into poor performers in your businesses, as that rarely happens. But if they do, don’t repeat my client’s mistakes in this case study. Act swiftly, making the hard cuts within three months of the poor behavior not getting resolved.
Regardless, act fairly and treat a long-term employee with respect (e.g., offer a high severance payment for their long tenure with the company). It is never easy to cut employees, especially long-termers who you view as “friends and family” of the company. But, sometimes, you just have no choice.