Hiring, Firing and Everything in Between

Why do you fire employees? If you have been in the equipment rental business for any length of time, you likely have already come across many reasons to fire an employee. Generally, the reasons to fire an employee fall into one of five categories:

• Elimination of the position
• Unsatisfactory job performance
• Habitual tardiness or absenteeism
• Complaints from customers and/or other employees
• Evidence of impropriety (i.e. embezzlement)

Of course, layoff situations sometimes can't be avoided if you lose a big account or are forced to scale back for other reasons. But in those cases in which the firing is due to the employee's poor performance, there are several other key components of a firing.

When should you fire an employee? Many small business owners wait until a Friday afternoon to carry out a firing, but that is the absolute worst time to do it. It is best to meet with an employee to fire him in the morning on any day but Friday. Sending him home for the weekend without a job will only add to his anxiety over becoming unemployed.

Where should you fire an employee? The best place to meet with an employee to fire him is in your office. Depending on the circumstances, you might also want to have someone else sit in on the meeting to verify the conversation. If you anticipate possible negative backlash or, worse, legal action from the fired employee, you should have someone else sit in on the meeting.

How should you fire an employee? Keep the meeting as brief as possible and let the employee know that the termination action is irrevocable. Once you have decided to fire someone, you need to carry your decision out. The employee may try and talk you out of it, but if you have determined that they are incapable of bringing their job performance up to standards, you won't be doing him or yourself any favors by agreeing to give him "one more chance."

Additionally, you will need to decide before the meeting how much you will pay the employee in remaining vacation time, severance, etc. If the firing occurs under adversarial circumstances (blatant misconduct on the job, embezzlement, etc.), then you might not offer any severance. But if you are eliminating a position, or you feel some obligation to "soften the blow" of unemployment, then some severance may be warranted.

Along the same lines, you might want to offer the employee the option of resigning.

He may prefer to resign to save face; however, he should know that a resignation will impair his ability to collect unemployment if that becomes necessary.

What should you say when you fire an employee? First, you should focus on performance, not personality when you explain the reason to the employee for his termination (see sidebar on page 94). If you have done a good job in setting goals and objectives as specified above, you should be able to sight specific performance issues as the reason for the firing. Second, the firing of an employee should never be a surprise to him. You should have already addressed (more than once) the performance problems in the past, both informally and formally. These problems should be well documented in his personnel file.

Third, you should treat the employee with dignity. Losing a job is a difficult time for anybody, and the termination meeting is not a time for arguments or personal attacks. Even if the employee becomes belligerent, keep your cool and focus the discussion on performance.

If you are firing the employee due to an elimination of the position, you might want to offer to help him find another job. And regardless of the reason for the termination, you will probably receive job reference inquiries once he starts seeking other employment. You need to be careful in giving references. It is best to provide factual information only, particularly if the firing occurred due to performance issues.

Finding good employees for your equipment rental business will continue to be a big challenge. Having a personnel plan in place to assist you in the human resources process will help you meet this challenge.

J. Tol Broome, Jr. is a freelance business writer from Greensboro, NC with credits in Nations Business, Entrepreneur and Journal of Commercial Lending. He also is a banker with over 21 years of lending experience.