One of the responsibilities an entrepreneur and all leaders would need to discharge from time to time is disengaging employees.
Some of the reasons for disengagement are pretty straight forward to handle. Fraud, for instance. When, decades ago, our accountant connived with a customer to steal from our small company, we had no qualms firing him. If in fact we had the time and resources, the next appropriate thing should have been prosecution. But we needed to remain focused and steadfast on the business at the stage we were and opted not to. Other reasons bordering on fraud include falsification of records and information; Unethical or criminal conduct within or outside the business, etc. Other reasons might include indiscipline, unrepentant insubordination, irresponsible damage to property, use of business property for personal benefit , etc.
Quite honestly, I think, most of the above are some of the easy reasons for firing an employee without losing any sleep whatsoever. Some of the emotionally tough reasons for firing employees, on the other hand, tend to be for straightforward business reasons such as having to fire an otherwise good-natured employee who, unfortunately, is unable to deliver results as may be expected despite being provided with all support and required resources. Other times, the business environment turns for the worse. Imagine the profitable world-class airlines and hotels having to fire thousands of employees as a result of the difficult operating situation occasioned by the COVID-19 pandemic. But for the revenue-smashing effects of the pandemic, definitely many of the employees, would not have been fired. These are the kind of disengagements that are tough for entrepreneurs and leaders. Sadly, the job must be done! Saving the business is always important to make it possible to survive the challenges and be re-positioned to be able to employ more people again. (Sometimes, leaders and employee unions can work out possible ways of reducing wages so as to save jobs. This is all fine and good whenever possible, but it is not the core issue here.)
Jack Welch, the former Chairman and Chief Executive of General Electric Corporation was one of the greatest corporate managers of the last one hundred years. His performance showed glaringly in having uplifted General Electric from being a $12 billion company in 1981 to $410 billion in 2001 on his watch as CEO. He did this through a policy of aggressive simplification and consolidation. But inbuilt in his approach was a tough approach to human capital-performance management that led to the firing of thousands of employee, that earned him the moniker ‘Neutron Jack’!
Years after his stay at GE and now his death, Jack Welch’s leadership style has been questioned by people who considered it ‘hard-nosed’. Of his many controversial people decisions was that he made GE executives to rate employees into the ‘A’s, the ‘B’s and the ‘C’s, which he explained as follows:
“A players are people who are filled with passion, committed to making things happen, open to new ideas from anywhere, and blessed with lots of runaway ahead of them. They have the ability to energise not only themselves, but everyone who comes in contact with them. They make business productive and fun at the same time.
The B players are the heart of the company and are critical to its operational success. We devote lots of energy towards improving Bs. We want them to search every day for what they’re missing to become As. The manager’s job is to help them get there.
The C player is someone who can’t get the job done. Cs are likely to enervate rather than energise. They procrastinate rather than deliver.” *
Furthermore, he said,
“As should be getting raises that are two to three times the size given to the Bs. Bs should get solid increases recognising their contributions each year. Cs must get nothing.”
“Some think it’s cruel or brutal to remove the bottom 10 per cent of our people. It isn’t. It’s just the opposite. What I think is brutal and “false kindness” is keeping people around who aren’t going to grow and prosper.
There’s no cruelty like waiting and telling people late in their careers that they don’t belong – just when their job options are limited and they’re putting their children through college or paying off big mortgages.”
“..(removing the bottom ten per cent of employees) works because we spent over a decade building a performance culture with candid feedback at every level. Candor and openness are the foundations of such a culture. I wouldn’t want to inject (this approach) cold turkey into an organisation without a performance culture already in place.”*
Whatever is the reason or reasons you have to fire or disengage an employee or employees, just ensure the following:
- You do everything in accordance with general labour laws and any specific employee contracts,
- Discharge all obligations due to the employee,
- The process should clear, honourable and graceful,
- Provide any disengagement support which you can afford but that is outside your obligations,
- Provide references for those deserving,
- Don’t burn the bridge, etc.
If you have or need to, fire but be fair. It is all in the day’s job.
*Jack: What I’ve Learned Leading a Great Company and Great People (Warner Books, 2001)
