How I Fire People - NYTimes.com Jay Goltz, like any normal person, hates firing people. The commenters on his post about firing brought up a wide range of subjects, but one issue that wasn't addressed is the actual mechanics of firing. I don't have wide experience with this, but over the last 26 years, I have had to fire five workers for breaking the rules, and I also laid off 11 people one day in 2008. If you are a boss, the day will arrive when you have to fire someone. Before I hire people, I have a clear idea of what I want them to do, how their performance will contribute to my success, and under what circumstances I will be unwilling to continue with their employment. In other words, I define boundaries. They are of two sorts: rules having to do with how the employee performs and rules having to do with how the business performs. There are some things an employee can do that will result in dismissal, and there are some conditions, like when the company is going broke, that will also result in dismissal. One of the hard lessons The Partner taught me is this: the health of the business is more important than the well being of any one employee. I took the time to write down what I expect of my employees, and what they can expect of the company they work for. This constitutes our employee handbook, and, while I wrote it, it has been vetted by labor lawyers. We give two copies of it to new hires, tell them to read it, and then have them sign a receipt saying that they have read and understood it, and that they agree to follow the rules we have laid out. The company - Paul Downs Cabinetmakers, or PDC - retains the right to interpret the rules as it sees fit, and to amend them whenever it wants. If the rules are changed, employees will be notified and given a new copy of the handbook, which they will also testify in writing that they have read and understood. Here's an excerpt, defining some expectations of employee behavior: Employees will try to increase productivity in operations whenever possible. Employees will use tools, jigs, and the facility in general in a manner that minimizes wear and maximizes utility and safety. Employees will operate machines and tools in a safe manner at all times. Employees will wear ear, eye and dust protection equipment when necessary. Employees will perform any reasonable duties requested of them, including shop maintenance and furniture deliveries. Employees are expected and encouraged to maintain clear and open communication with management about unsafe or inefficient situations in the shop. Teamwork is an essential component of employment with PDC and a cooperative attitude is expected. Employees are expected to keep an accurate time sheet, broken down by job and activity. This time sheet will be used for production metrics as well as for payroll purposes. It is assumed that employees will behave in a reasonable and cooperative fashion. In the event of misconduct, an employee's job may be terminated at PDC's sole discretion. Reasons for termination include but are not limited to the following: Tardiness or absenteeism Willful or repeated damage to products, equipment, or facility Continual performance of duties in a manner that PDC deems to be careless or dangerous, regardless of quality of results Theft Falsification of time and/or job time sheets Behavior that is insulting, bothersome, or obnoxious to others Illegal behavior, including using or being under the influence of illegal drugs or alcohol while at work Other reasons not listed here It is also recognized that continued operation of PDC requires employees who are able to produce work of the highest quality at reasonable speed. It is understood by employees that substandard performance endangers the existence of PDC as an ongoing operation. In order to fairly evaluate performance of employees, records are kept with each job. PDC retains the right to dismiss any employee whose performance, as measured by quality of result and/or time taken in manufacturing, does not meet standards established by previous operations of PDC. Whether such standards have been met will be determined solely by PDC. As you can see, these are clear boundaries. Of the five workers I have fired for cause, three were falsifying time sheets (i.e. stealing from me through the pay process), one showed up at work high, and one refused to sit through a disciplinary meeting. In all of those cases, I could point to the relevant section in the employee handbook and demonstrate that a clearly defined rule had been broken. The toughest part of having rules is enforcing them. It's tempting, when evidence of misbehavior has been presented to me, to try to avoid dealing with it. There are always mitigating circumstances, and in some cases I was well aware that I was going to cause distress to an employee's family. However, I've learned over the years that it's more important to defend the integrity of the group. Good employees hate working with people who don't perform, and they hate cheaters and thieves even more. I had an employee many years ago who I liked a lot and who came from a tough background. He started lying about the hours he had worked. It was very, very hard for me to send him away. I let the situation go on for a couple of months. But then my shop foreman said: "Him or me." Which was the correct thing for him to do. The Partner had a philosophical attitude about dishonest employees: he fired them immediately and felt bad for them but told me that there was nothing else to do. "They do it to themselves," he would say. He was right, and I have taken that lesson to heart. The most unpleasant moments of my adult life have been spent in the act of firing people. In order to steel myself to complete the task, I first write a summary of the misbehavior, who discovered it, and what rule was broken, and what I intend to do about it. I also write a short acknowledgment form that the employee will sign and that confirms what happened. It makes clear that the employee was responsible and that the reason for the firing has been explained. I get one of my senior people to act as a witness. We set up a camera in the room so that the entire conversation is recorded. We bring in the employee, tell him that he is being recorded, and have him acknowledge that he understands that this is being done. Then I read the document outlining the problem and ask the employee if he has anything to say. Four of five have admitted breaking the rules; the other guy got up and left before I had finished reading. In two cases, the employee begged for another chance, and it was very, very difficult to hang tough. Having a witness present keeps me on track. I find myself disassociating: I am performing a role, of defender of the group, of ruthless leader. It's not how I see myself, ordinarily. But it has to be done. I have fired two workers, aside from the others mentioned, because they couldn't perform to our standards. Both were veteran cabinetmakers who had good resumes and who I hired with great hopes. They simply could not do the work. One was unable to complete a project - he took a freakishly long time to do even the simplest task. His work was very precise and beautiful, but after he took a week to do an introductory project that should have taken him a morning - a footstool, which I'm using right now - I had a chat with him. He knew that it wasn't working out and agreed to resign. The other guy was, I think, nervous about making a good impression and kept missing things on the drawings. After a couple of weeks of that, I told him he had to go. In both of those cases, the worker realized that he wasn't going to make it. The conversations weren't pleasant, but it wasn't totally out of the blue and I bore neither of them ill will. The most difficult cases are when workers don't misbehave but aren't particularly efficient or don't do outstanding work. I've noticed over the years that there is wide variation in what you might call handiness. Some people just have better hands than others. They can make machines work, perform difficult operations, build hard projects, and just plain get stuff done at high quality and at high speed. Others can't. Nothing is more heartbreaking than realizing that a worker who is trying his hardest can't cut it. And then there's another group that lies somewhere in the middle. These workers have pretty good skills and a pretty good work ethic. In the years before 2008, when we were desperate to hire almost any warm body, I ended up with a number of these workers. Unfortunately, we were unable to put together effective training or management to maximize their effectiveness. I take full blame for this. But in my defense, training workers is extremely expensive for a small shop like mine. I would have had to assign one of my better guys to the task full time for there to be any hope of success, and I simply could not afford to do that. We told the veterans to help the new people whenever they could, but none of the old heads really wanted to be bothered, particularly given that we keep track of everyone's output and any time spent teaching new people would reduce the build total of the teacher. Also, in those days, we had no regular meetings, so there was no effective mechanism to spread knowledge throughout the shop. In the end, adding people was not a solution for more output; it probably had a net negative effect. And this was a big contributor to our wipe out. The day came, in the fall of 2008, when the problem solved itself. We were out of money. It became clear that many people would have to go. This kind of firing was easier, mostly because there was no other choice and the people had done nothing wrong. But it did give me the opportunity to get rid of all my untrained, middle-of-the-pack workers. Since the economy was crashing down all around us, I was able to shift the blame to the outside world. In the years since, I have been able to surpass our previous output peaks with a lot fewer people. The day that I did those layoffs, there was an oddly cheerful atmosphere in the shop. Everyone had known for months that we were having difficulties, and I think it was a relief to get everything out in the open. I gathered everyone, laid out the financial condition of the company, and read the list of people who would go. It went a lot better than I thought it would. Some of the people I laid off came to my office on their way out to thank me for their employment and to tell me that I had been a good person to work for. That made me feel a little better, but I felt then, and still do now, that I had made some gigantic mistakes and that things probably could have turned out better. Not hunky-dory, but better. I've been fortunate with my employees. The vast majority have been decent, hardworking people who tried their best to make the company successful. I enjoy working with people like that, and I look forward to going into the shop every day. Now and then things go badly and unpleasant tasks have to be performed. It's an inevitable part of being the boss. My experience may be unusual, though. Have you had to fire anyone? How did it go? Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside of Philadelphia.