How to Know When to Fire an Employee

Yes, there are bad hires: those times when someone who seemed so perfect during the interview process turns out to be a poor culture fit, have the wrong set of skills, or be under-qualified/overqualified for the job.

But is firing really the best solution?

If you’re having problems with a single employee, it may be time to let him/her go. But if multiple team members are performing poorly, or if you can’t quite figure out why things are going wrong, it’s probably time to take a step back. Often, what appears to be a hiring problem is actually the result of a much bigger issue of disengagement.

Before you let top talent go, use the following approach to get to the root of potential problems before they lead to even bigger retention and turnover issues.

Step 1: Is the Employee Simply Disengaged?

Sometimes, what appears to be poor performance is in fact the result of cynicism, burnout, and disengagement. A whopping 70% of Americans say they are not engaged at work, and this epidemic is affecting millions of people with the potential to be successful at their jobs if only the proper motivations are in place.

The costs associated with productivity and profits lost to disengagement—not to mention recruiting and training replacements—is astounding. For example, companies with low engagement levels report 2.5x less revenue than competitors with high levels of engagement. And when HR goes to replace the employee you’re about to fire, it will cost six to nine months’ worth of salary to do so, according to a study from the Society for Human Resources Management.

Step 2: Dig Deeper with Surveys

To truly understand the state of your workforce, you’ll need objective data that enables you to take appropriate action—whether that means letting a team member go or launching a re-engagement initiative.

The best way to gather meaningful insights you can actually use? Conduct an employee engagement survey. Survey data can help bring clarity to who should be fired and who’s simply disengaged or in need of better support from leadership.

But here’s the catch: Many of the survey methods and templates out there will leave you with vanity metrics that do nothing for your engagement, versus valid data that will help you make a change. Be sure to base your survey questions on psychological conditions of engagement so you can uncover where real pain is being felt.

The best, most thorough survey and results will even help you pin problems to specific departments, teams, or roles. We’ve seen instances where a disengaged employee—the very one HR initially thought it might be time to fire—was simply struggling to remain motivated in the midst of poor management. This kind of clarity could save you from firing an otherwise superstar employee while unknowingly holding on to the lackluster supervisor or misinformed policies that were to blame for poor performance.

Step 3: Use Your Data to Guide the Final Decision

At this stage, you’ve assessed the symptoms of disengagement and backed up your conjectures with reliable data. Now, it’s time to take action.

If you’ve identified some bigger root issues, it’s time to make a change within your organization. This can be a daunting process, and it helps to have guidance from employee engagement specialists who can tell you exactly how to act on your data in ways that will have long-term, lasting benefits—the kind that can make firing fears a problem of the past.

Still Need to Fire?

If you’ve exhausted your options—surveying, opening the lines of communication, gathering feedback, and offering performance perks—and an employee is still disengaged, it may be time to fire. In some cases, removing the un-engageable employee can do as much good for your culture as nurturing the engaged ones. If this is the stage you’ve reached, I highly recommend Harvard Business Review’s excellent article on the right way to fire someone.