How to Fire an Employee Gracefully: A Quick Guide

“You are the weakest link — goodbye” isn’t the way to go.

Joanna Zambas
Joanna Zambas

Content Manager and Career Expert

Reviewed by Chris Leitch

A manager gracefully firing an employee and ripping their employment contract

Whether an employee is underperforming, behaving disruptively or simply a bad cultural fit, it’s still a difficult task to terminate their employment. You will be drastically changing their lives and undoubtedly causing them some stress — yet it’s a necessary part of the business if you want to build and maintain a great, engaged team.

No matter how you look at it, firing an employee will be awkward and uncomfortable, but there are a few steps you can take to make it a little less painful for everyone involved. You will also want to protect your legal and financial interests during this process.

Our step-by-step guide will tell you how!

Common reasons to fire an employee

There are many reasons you might decide to terminate a worker’s employment, which include (but are not limited to):

  • Poor work performance
  • Poor attendance
  • Substance use on the job
  • Company property damage or theft
  • Insubordination
  • Bad or abusive behavior

In many cases, it is valid (and legal) to let go of an employee for violating company policy and/or the terms of their employment contract without warning them first. Since employment in most US states is at-will, either party can terminate the agreement without notice.

Having said that, you can also legally fire employees without cause. You could, for example, not consider them a great fit for the role or company culture despite their complying with policies and putting in the effort.

Typically, though (and especially when the committed offense is not severe), it’s a good idea to give team members a verbal warning first, followed by a second one in writing, so they have the chance to reflect on their conduct and make improvements.

How to fire an employee

Even with a valid reason, terminating someone’s employment can be difficult. To help you prepare, we have outlined some steps you’ll want to take before, during and after your meeting with your (about-to-be former) employee.

1. Create a performance improvement plan

PIPs are usually set in place when an employee is not meeting their job requirements. Should you wish to give your employee a final chance before dismissing them, now is the time to set clear objectives to address their poor performance and provide the adequate training that’s needed to improve.

Dan Peyton, employment law partner at legal firm, McGuireWoods says: “The key is that everything has to be investigated and the employee has to have a fair chance to explain themselves and improve.”

This gives the employee a fair opportunity to prove their skills and to personally assess if they’re suited for the role and company. If not, it gives them the chance to resign and leave the company gracefully.

2. Decide on a timeframe and monitor progress

If you are proceeding with a PIP or a written warning, you must decide how long you’re willing to wait before you see the results you require, as well as what methods you’ll be using to measure your employee’s progress.

Simultaneously, you’ll also need to communicate your expectations — and the consequences of failing to meet them — as clearly as possible.

According to legal writer Christine Organ, there are many ways your company can benefit from investing in PIPs: it makes employees feel cared for, saves you time and resources (hiring is very expensive!) and, as a result, it promotes a positive company culture.

3. Prepare to have the conversation

If verbal and written warnings and PIPs have not yielded the results you have hoped for, you will need to start preparing for the final conversation you’re going to have with your employee.

Once you have established that you need to dismiss someone on your team, you must first review the employee handbook and consult with your legal and HR department about how to fire an employee. If they are within their probation period, the termination of employment should be quite straightforward, as employee benefits such as a 401k plan and health insurance will not have been activated.

4. Make HR your ally

Unless you work in human resources yourself, you must consult with your HR department every step of the way. They’ll inform you on applicable employee laws and advise on what to say during the meeting.

You’ll also need a witness (typically someone from your HR department) while you’re delivering the news to protect yourself from a potential employment termination case.

“In this litigious society, HR is your ally in filling in any blanks,” according to HBR. Although it’s your responsibility to fire the employee, HR is your safety net to answer questions that you might not have the answer to.

5. Compile evidence

If you suspect that an employee has committed gross misconduct, you must begin by looking at your company’s employee handbook and the worker’s employment contract to determine if their behavior fits the criteria.

If it does, you’ll then need to launch an investigation, speaking with other witnesses and gathering any evidence that supports your case. Finally, you’ll want to hold a disciplinary hearing to give your employee a chance to explain themselves.

6. Write a termination letter

Whether you’re firing your employee for misconduct (such as repeated tardiness) or gross misconduct (such as harassment), you’ll need to write a termination letter. Not all states legally require you to do this, but providing a termination letter is generally a good idea as it:

  • Provides proof of unemployment to unemployment agencies and social service providers
  • Provides information on any benefit continuance, such as health insurance
  • Outlines the offboarding process, detailing next steps such as returning company-owned phones, laptops and key cards

Should a legal dispute arise as a result of the firing of an employee, your termination letter can be used as evidence that you have met your obligations.

7. Set a meeting

Once you have been through the above procedure, you must set a meeting with the employee that you are dismissing. Make sure this is done face to face in a private setting where you can’t be heard.

After all, it would be distressing for them if other employees could hear the private discussion. (The only exception here is the witness we mentioned earlier!)

8. Prepare for all possible reactions

Sometimes it’s impossible to accurately anticipate how an employee might react when they receive the news that they have been fired. This is especially true if you’re terminating them without prior warning and it catches them completely off-guard.

Leading with empathy can typically diffuse some of the tension; so can paying extra attention to regulating your own emotions, which can be tricky if the other person starts to shout or make threats.

You will also want to prepare answers for questions you might receive, such as “When will I receive my last payment?” and “Can I get paid for unused vacation time?”

9. Keep it short

The words you use to terminate an employee should be simple and to the point. In these awkward situations, we tend to waffle, sugarcoat and build up to the bad news. But this is not fair on the employee; once they walk into the room, they need to be informed of the decision quickly.

You’ll want to state your reasons and use the evidence that has been collected and shown to the employee over their reviews in the past months. If you have been following the correct procedures, it shouldn’t come as a surprise to the employee, as they’ll be aware that they’re lacking the skills or traits that the company requires.

10. Show compassion

Firing can be a difficult chore for you as the manager, but it’s even more traumatizing for the employee. Be empathetic towards them; allow them to share how they feel, and try to listen patiently and actively.

Plus, if you’re happy to provide them with a reference letter, let them know. It’s a good opportunity to highlight their talents and advise on roles that you think they will succeed in.

11. Consider offering severance pay

Although in most scenarios you’re not legally required to provide severance pay when an employee’s contract is terminated, it’s fairly common practice. Being fired is a difficult time in a person’s life, and having a severance pay to rely on while looking for other employment opportunities can take a huge weight off the employee’s shoulders.

12. Begin the offboarding process

A smooth offboarding process can be just as beneficial for your company as it can be for your employees. Some common steps to be taken during offboarding include having the employee return company-owner equipment, hand over job responsibilities, and attend an exit interview.

The more you invest in your offboarding process, the less likely you will be to burn bridges and leave a negative impression on both departing employees and any current ones witnessing the way you handle dismissing their peers.

13. Limit their access to your system

Once you have given the employee their notice, you must consider their access to your systems. Limit their access to any information that’s not relevant to them, such as details on upcoming projects they will not be part of.

Of course, if they’re not departing right away, they’ll still need access to certain files to complete pending tasks or successfully hand over their work to a colleague.

14. Do it ASAP

There are many theories on when is the best time to dismiss an employee, but is there ever a good time to be the bearer of bad news? Some think it is best to do it as soon as you have made the decision, so it’s not lingering above your head.

Many believe that terminating someone’s employment on a Monday morning will be more effective, as they will have a full week to look for other opportunities and won’t feel like they put in hours for no reason. Others believe that Friday afternoon is best when people are leaving for the weekend, as they will have a few days to cool down and accept the news.

15. Carry any valuable lessons forward

Even though it’s unpleasant, there are things you can learn every time you let go of someone on your team.

Reflect on their time at the company: Were there signs early on that you ignored, telling you that they wouldn’t make a good fit for the role or team? Did you provide enough training during the onboarding process? Did you delay firing them even when you knew it was time to do so?

Thinking about all these things can help ensure that similar situations are avoided in the future.

What to do after the termination

Firing someone gracefully doesn’t stop the moment you share the news with them; it carries on to the actions you take afterwards, too. Let’s look at three things you can do when all is said and done:

1. Let your (former) employee know they can contact you

Saying something like “If there is any way I can help, let me know” will possibly not be helpful when firing someone. After all, you’re not going to give them an impressive letter of recommendation or put in a good word for them if you’ve just fired them for poor performance or repeated (or severe) misconduct.

However, you can remind them that they can reach out if they have questions, regarding their final paychecks or health benefits, for example.

2. Inform your team

Once you have let the employee know that you won’t be continuing your collaboration, it’s important to notify other members of staff. You can arrange a quick huddle with the employee’s team or department to let them know, giving everyone a chance to say their goodbyes.

You may also want to give the team a brief explanation so they’re not worrying that they will be next on the chopping block.

3. Give your departing employee some time

Unless someone is behaving violently, there is no need to escort them from the premises. Doing so will only cause them to feel upset and ashamed. Instead, give them a chance to cool down, collect their thoughts, and gather their things.

Letting them know they have 20 minutes to pack away their personal belongings and meet you at the entrance to the office will be appreciated.

Final thoughts

As a leader, there is sadly no way around firing employees, and you will probably never get used to the unpleasant feeling of letting someone go — even if you know that it’s the right thing. However, it doesn’t need to be an unkind situation, and there are ways to ensure that the news is delivered with dignity and respect.

Have you ever had to fire someone? What was it like? Share your experiences with us —and any other tips or advice you may have — in the comments section below!

This article is a partial update of an earlier version originally published on October 17, 2017, and contains contributions by Electra Michaelidou.