Some Thoughts on Firing Employees

This past week, I read a terrific Quora thread on firing. The depth and breadth of answers shows the wide range of opinions and practices on the subject, and it made me think about the topic for this blog. Companies are rarely transparent about how and why they let people go, so hopefully we can be an exception here, at least to the extent that it’s possible.

(via Shawn Mgill on Flickr)

I’ll start by noting that I used to be allergic to firing people. It was so bad that early employees of Moz had to push me for months and it wasn’t until a specific, unfortunate incident occurred that I finally relented and dismissed the person. Many managers and startup folks often say that they never regret firing someone too soon, but they always regret it too late. I agree with that statement as it relates to my own experience, but I also think it’s biased and requires nuance.

In a termination, there are two sides affected – the company and the employee. The old saying goes “history is written by the victors,” and this holds true in termination cases, too. The manager/CEO/hiring party almost always tells the story of never regretting firing someone, and the employee almost always tells the story of how the company made the mistake (and often, they say it was their decision, as it’s often considered a mark of shame, which I think is wrong). The company/manager will never really know if they should be regretful about a termination – people change, companies change, and 6 months later, you might have been thanking your stars you called off that firing and kept working to improve the challenges instead, but you’ll never know.

Over the course of SEOmoz’s history, I recall that we’ve fired ~12 people. Only 2 of them were easy (in one case, the person had only been with the company a short time, and it was clear that things weren’t a match, in the other, the person hugged Sarah and I and expressed a huge sigh of relief and excitement that the obligation had been lifted and they could go do what they’d really been wanting to do). The others sucked. I felt awful, but they probably felt worse. My only consolation is that I or other Mozzers have kept in touch with 8 of them, and every one of those is doing well personally and professionally, some much better than they did in their time here.

We did layoffs once as well – it was during a re-organization of the engineering team after we’d brought in a new lead. It started painfully, but ended up working out (at least for the company and a couple of the folks we laid off – I don’t know how the others are doing but I hope they’re well). 4 developers who’d been hired over the prior 9 months were affected if I remember. I dug through my email and found this email (sent from me to folks on our executive team at the time – several years ago, when our financial situation and traction were far worse than today):

If I remember correctly, this was sent on a weekend after I had talked about the situation with Geraldine. Her influence strongly colored the eventual action we took, and I’m very grateful, because I recall the original plan (which I won’t go into detail on and don’t have good notes about) really wasn’t up to our core values.

Since then, we’ve been lucky and not had to do any layoffs. But we have done terminations.

Our core values of TAGFEE include Generosity and Empathy, so we’ve always tried to focus on that with dismissals. It’s one of the hardest and life-shattering things a person goes through, especially someone who’s joined a startup and given much more than their work, but their heart to the company, too. We do a few things:

  • We almost never fire for performance reasons. We focus on improving skills and productivity, on training, on moving someone into a position where they can thrive. Only three times in the company’s history have we let someone go because they simply couldn’t perform to the necessary level.
  • We do fire for core values problems – when people start getting political or display ethical problems is when we say goodbye. I’ve made a personal call on this twice in the last 5 years, overruling the employee’s direct manager.
  • Severance is always at least 1 month + 1 month for every year (or partial year) they’ve been at the company. Thus the minimum severance is 2 months pay. This makes it expensive to fire someone, but gives them a realistic timeframe to find something new. Even in tech, it’s very hard to get a job in 2 weeks, and as we all know, lots of people live paycheck to paycheck. 2 weeks, or even 4 weeks of severance can be devastating. I can’t do that to someone, no matter what they’ve done.
  • We do prep a lot of HR paperwork in advance, have our HOTH (Head Of Team Happiness, who runs personnel-based HR functions) in the meeting with the manager, and often times, I’ll meet with the person, too. Our COO, Sarah, does exit interviews, which are occasionally valuable and revealing, though usually laced with emotion that makes it hard to see the forest for the trees. We’ve actually had informal coffee hangouts with folks we’ve let go (or who’ve left) 6-12 months after, and these are much more valuable.
  • We try to balance transparency against empathy, which creates the really hard situations. Team members are used to detailed explanations at Moz. It’s part of our culture to “show our work” on everything we do, especially when there’s contention. But this model falls apart in terminations, because it’s simply not empathetic or right to give details about why someone was fired. It used to be that we gave the choice to the employee of whether they’d like to message the departure as being their choice or not. We’ve scrapped that model – it didn’t work. Now we are transparent about who initiated.
  • Since we can’t provide details, every termination is incredibly painful for many folks on the team. People at SEOmoz are close to each other, and if managers and teams are doing their jobs right, no one in the company except possibly the team members working directly with the fired employee know that anything’s wrong. That means terminations are always a big surprise and shock to a lot of folks, and this almost always results in bad will and suspicion of the motivations of management (at least, temporarily). It’s not OK to just say “trust me, we’re doing the right thing,” nor does it work to say “here are all the details of why this happened and knowing this, you’d have made the same move.” Thus, we have to find a balance that doesn’t talk details but does help rebuild that lost trust. Even in egregious circumstances, it’s a long, hard slog back to a good place.
  • We never tell anyone outside the company that someone was fired, and except in very weird cases, always provide a positive reference. We also try to be very generous with regards to ongoing benefits like health insurance/unemployment/etc to the extent that these are possible. Just because you weren’t a match here doesn’t mean you should be in a worse position for the experience you had here, and it’s our obligation to be generous, no matter what happened. I’ve heard managers at other companies say things like “we only owe an employee who’s performing.” I reject that. It’s my belief that we owe everyone who joins the team, no matter how their tenure ends.
  • We have used Performance Improvement Plans (PIPs), but they’re at managers’ discretion. We generally don’t have to be that formal – the weekly one-on-ones are a time when everyone in the company should know exactly how they’re doing and if there’s anything seriously concerning. I often tell managers that every one-on-one should contain a mini-performance-review, even if it’ as small as “you exceeded expectations this week,” or the more complex “you need improvement on x and y, let’s talk about a plan to get there.”
  • We work extremely hard to make sure someone who’s having problems knows that those problems exist, are serious, and could lead to termination. The only time it should be a surprise is when there’s been an egregious core values or ethics violation that demands immediate action.

This stuff is amazingly hard – probably one of the toughest parts of having a team. I wish more people would write about it candidly, and I hope that in the comments, many of you can give me feedback about the thoughts above and about how you’ve seen it done right or wrong.

p.s. Nick Mehta’s response to the Quora thread was my favorite. It highlighted many of the emotional things managers who fire need to think about before they pull the trigger.