Entrepreneurship Exam > Entrepreneurship Videos > How to Start-Up your own Company (Video Course) > How to fire someone
How to fire someone Video Lecture | How to Start-Up your own Company (Video Course) - Entrepreneurship
FAQs on How to fire someone Video Lecture - How to Start-Up your own Company (Video Course) - Entrepreneurship
| 1. How can I approach firing someone as an entrepreneur? |  |
As an entrepreneur, firing someone is never an easy task but sometimes it becomes necessary for the betterment of the organization. Here are some steps to approach firing someone:
1. Evaluate the situation: First, assess the reasons why you need to let someone go. Ensure that you have valid reasons and consider any alternatives or corrective actions that can be taken before making a final decision.
2. Prepare for the conversation: Plan what you want to say and anticipate how the employee might react. Be clear, concise, and empathetic while delivering the news. It is important to treat the person with respect and dignity throughout the process.
3. Choose an appropriate location: Find a private and neutral space to have the conversation. This will help maintain confidentiality and reduce distractions or interruptions.
4. Communicate the decision: Clearly explain the reasons for the termination in a compassionate manner. Provide specific examples of performance issues or any other factors that led to the decision. Listen to the employee's perspective but remain firm in your decision.
5. Offer support and assistance: Show empathy and offer assistance to help the employee transition through this difficult period. Provide information about severance packages, outplacement services, or any other resources that may be available to them.
Remember, firing someone is a serious matter, and it's important to handle it professionally and with empathy.
| 2. What legal considerations should I keep in mind while firing someone? | |
When firing someone as an entrepreneur, you need to consider certain legal aspects to ensure you are acting within the law. Here are some key points to keep in mind:
1. Employment contracts: Review the terms of the employee's contract to understand any specific provisions related to termination, notice periods, or severance pay. Adhere to the terms mentioned in the contract while terminating the employee.
2. Employment laws: Familiarize yourself with the labor laws and regulations in your jurisdiction. Understand the rights of employees, their entitlements, and any legal obligations you have as an employer during the termination process.
3. Discrimination and wrongful termination: Ensure that your decision to fire someone is not based on discriminatory factors such as race, gender, religion, or disability. Also, avoid terminating someone for illegal reasons, such as retaliation or whistleblowing. Violating anti-discrimination laws or wrongfully terminating an employee can lead to legal consequences.
4. Documentation: Maintain proper documentation of performance issues, warnings, or any other relevant evidence that supports your decision to terminate an employee. This documentation can be crucial in case of legal disputes or claims.
5. Consultation with legal counsel: If you are uncertain about the legal aspects of terminating an employee, it is advisable to seek guidance from an employment lawyer who can provide you with the necessary advice based on your specific situation.
Remember, labor laws can vary, so it is essential to consult with legal professionals familiar with the laws in your jurisdiction.
| 3. How should I handle the emotional impact of firing someone? | |
Firing someone can have a significant emotional impact on both the employee being terminated and the entrepreneur. Here are some tips to handle the emotional aspect of firing:
1. Be empathetic: Understand that termination is a difficult experience for the employee. Approach the conversation with empathy, showing respect and understanding for their emotions. Be prepared for a range of reactions, including anger, sadness, or shock.
2. Active listening: Allow the employee to express their thoughts, feelings, and concerns during the conversation. Practice active listening by acknowledging their emotions and providing reassurance where possible. Avoid becoming defensive or argumentative.
3. Maintain professionalism: While it is essential to show empathy, maintain a professional demeanor throughout the process. Stick to the facts and reasons for the termination, avoiding personal attacks or unnecessary criticism. Keep the conversation focused on the employee's performance and behavior.
4. Offer support: Provide information about available resources to help the employee navigate the transition, such as outplacement services, career counseling, or job search assistance. Let them know that you are willing to provide references or assist in their job search if appropriate.
5. Seek support for yourself: Firing someone can also be emotionally challenging for the entrepreneur. It is important to have a support system in place to discuss your feelings, concerns, and any difficulties you may encounter during the process. This could include mentors, peers, or professional support networks.
Remember that handling the emotional impact of firing someone with empathy and professionalism can help ease the process for both parties involved.
| 4. What steps can I take to minimize the risk of legal disputes after firing someone? | |
After firing someone, it is crucial to take steps to minimize the risk of legal disputes. Here are some measures you can take:
1. Consistency and fairness: Ensure that your decision to terminate an employee is based on consistent and fair criteria. Treat all employees equally and avoid any perception of favoritism or discrimination. This can help demonstrate that the termination was not arbitrary or unfair.
2. Follow established procedures: If your organization has established protocols for disciplinary actions or termination, make sure to follow them consistently. Deviating from these procedures without valid reasons can raise legal concerns.
3. Document performance issues: Maintain thorough and accurate documentation of any performance issues, disciplinary actions, or warnings given to the employee. This documentation can serve as evidence if any legal disputes arise.
4. Offer severance agreements: Consider offering a severance package or settlement agreement to the terminated employee. This can provide them with financial support and, in return, may reduce the likelihood of legal action against your company.
5. Consult legal counsel: If you have concerns about the termination or potential legal risks, it is advisable to seek guidance from an employment lawyer. They can review your situation, provide advice, and help you navigate any legal complexities.
Remember, taking proactive measures to minimize legal risks after firing someone can help protect your business from potential disputes and legal consequences.
| 5. How can I ensure a smooth transition for the team after firing someone? | |
Firing someone can impact the dynamics of a team. Here are some steps to ensure a smooth transition for the team:
1. Communicate transparently: Inform the team about the termination, ensuring transparency while respecting the privacy of the individual involved. Communicate the reasons for the termination, emphasizing that it was a decision made in the best interest of the organization.
2. Provide reassurance: Address any concerns or questions the team may have about the impact of the termination. Reassure them that their jobs are secure and that the termination was an isolated incident, not reflective of their own performance.
3. Clarify roles and responsibilities: Clearly define any changes in roles or responsibilities resulting from the termination. Ensure that the team understands how the workload will be redistributed and provide any necessary training or support to help them adapt.
4. Encourage open communication: Create an environment where team members feel comfortable expressing their concerns, thoughts, or emotions about the termination. Encourage open dialogue and provide opportunities for team members to share their perspectives.
5. Foster team cohesion: Organize team-building activities or initiatives to foster cohesion and morale within the team. This can help alleviate any tension or uncertainty resulting from the termination and maintain a positive work environment.
Remember, addressing the impact of a termination on the team proactively and transparently can help maintain productivity and morale during the transition period.
Text Transcript from Video
hey everybody its Jason Calacanis and
this is startup basics a new series
presented by our friends at WS gr yes
that's the amazing law firm Wilson
Sonsini that is in Silicon Valley and
many other cities they do a wonderful
job and we were talking we're having
lunch and we were recapping all the
success we've had over the years with
doing the launch festival and this week
in startups and we thought to ourselves
how could we really really really help
startups and entrepreneurs in 2014 and
the best answer we could come to was
answering their very basic questions
because my friends over there Todd and
other attorneys over there we answer the
same questions over and over again so we
thought wouldn't it be great if these
were just in a video where you could
pull them up anytime on your phone when
you're on the bus wherever and just hear
some frank advice now this is a
difficult one to do in a way because
it's about a negative time a negative
event in most people's estimation the
time when you have to fire somebody
it is incredibly challenging as an
entrepreneur to deal with this issue
especially when you're young and you
haven't done it before many people will
have a panic attack won't be able to
sleep will run to the bathroom and puke
will have their knee bouncing up and
down under the table when they have to
do this and you don't have to feel that
way
firing somebody is typically a great
relief for the person you're firing let
me say that one more time most of the
time when you fire somebody it's a
relief to them and in truth if you're
doing it for good reasons it is a great
learning opportunity for them and for
you because anytime you are firing
somebody two things have occurred that
person has not met your expectations and
you did not meet up you did not hire a
person who could meet your expectations
or some combination of that you did a
bad job hiring and or they did a bad job
at they did a bad job at their job now
when it gets to a senior executive then
it's even more pronounced because you
have no excuse if you're hiring somebody
who's worked for 10 20 30 years at
another company and they've done a great
job at those other companies and their
references checked out well then what
happened here we're all fallible
everybody makes mistakes you might not
have managed the person perfectly you
may not have given them instructions on
how to do their job properly you may
have hired the wrong person or you may
have thought you needed a skill set that
you don't so the first thing to do when
you're gonna fire somebody is to just
stop for a second and do some analysis
privately of did we hire the right
person to begin with and why did how did
we get here sir number one you should go
back and talk to the people who
interviewed that person and say and this
is before firing or after but I would
say generally before when we interviewed
Jason for the job as host of this week
in startups did it ever come up that he
doesn't really like to listen to other
people's input did it come up that he
has a temper did it come up that he
shows up to work late and did it come up
that he can be abrasive at times with
his feedback to people and roll his eyes
did all those things come up I'm just
making these things up okay these are
not real cases I'm just hypothetical
questions especially and if they did
come up in the references well then gosh
you guys as a team have something to
learn listen to the references and I
force in my companies there to be three
references and I force those references
to be checked in full before we ever
make an offer and I pre check what the
salary expectations are so we do not get
into the trap that I see so many people
get into which is they fall in love with
a candidate so much they're so sold on
them that they don't believe the
references or even worse they don't do
the references or they do some of the
references because they really want to
get an S in that seed to get the job
done that's the mistake typically so
when you're firing somebody you got to
do a bunch of introspection and say what
happened here now you should talk to
your HR department about all the legal
issues around firing somebody I'm just
talking in generalities about my
experience your experience may be
different so there's a huge legal
disclaimer here around all the stuff
but there is no disclaimer around having
done your proper research when hiring
somebody
I always insist that that person do the
same before you take my investment
dollars as an angel investor I ask
people do you want to speak to a couple
of the companies I've invested in
including some of the companies that
have failed and when I interact with
those company because I work for them in
a way in a very literal way I always
think God in my worst day as an angel
investor what did I do and how will that
how would that come across in a
reference and when situations go bad how
does that come across right so always
there should be a double reference check
going on and that an easy reference
check is here are three or four people
in our company go meet with them one on
one and have a discussion that's the
kind of stuff that will avoid people
having to be fired now
there are many reasons why people get
fired if we're talking about fraud or
stealing or sexual harassment or any
kind of malfeasance or misbehavior I am
A one strike you're out boss you are not
there to try to change people unless of
course you're their therapist you happen
to have hired them for your startup and
you happen to also be on the side their
personal therapist or career coach it is
not your job to try and fix people I
tell you this in such an emphatic way
because I tried to do this in my 20s I
thought I'm a psychology major I could
read people I have high emotional
intelligence I'm smart if somebody's not
getting the job done I could get inside
their head I can be their coach I can be
Pat Riley or or Phil Jackson and I can
motivate them uh-uh not gonna work
somebody grows up for 20 years in a
certain household with certain parents
or certain little idiosyncratic
behaviors and you think in your spare
time as the founder of your company that
you're gonna be able to change them it's
not going to happen and if it does it's
going to be a bizarre relationship where
you're trying to get inside people's
head and make them into something
they're not hire great people check
their references and if they do
something that is on you know this side
of ethics they have to go immediately
and it's a very quick conversation Jason
we are in this room to inform you that
we're letting you go
that's it you don't have to give a
reason you don't even have a give a
reason they could ask a thousand
questions in all likelihood you live in
a state and a country that has at will
work so a person can leave the company
at any time and you can have somebody
leave and you can just say it's not a
fit it's not a culture fit you don't
have to get into all the details and
when you get into all the details I
think that's when people things get very
emotional it gets kind of messy and so I
had a situation I'm going to tell you
about a situation I'm gonna change a
bunch of the facts around so that it's
you wouldn't know what company was or
any of that stuff but this is a kind of
a situation
somebody harasses somebody at work and I
called my HR friend a recruiter and I
said hey how do I deal with this because
I was a young person and she said here's
what you do you go into the room with
another person with HR or another senior
executive and you tell the person that
it's not working out that you heard
about this situation and it's not
acceptable and that you think there's a
better opportunity for this person
somewhere else but we no longer are
going to have a position for them here
at this company and they have two
choices here in this envelope are two
weeks of severance if you would like to
resign right now and move on to your
next adventure we can give you these two
weeks severance and it can be your
decision if not we're gonna fire you
right now with no severance and Joe is
gonna walk you to your desk to collect
your belongings and we wish you all the
luck in the world
that's it and boy if you do that no
person wants to be fired and everybody
would love to weeks of severance so go
ahead give them the severance they feel
good about it you can even have them
sign some forms on the way out talk to
your HR and legal people about that
sometimes people want to do
non-disclosures on the way out
you should have that on the way in
anyway and some people like to do exit
interviews I'm not a huge fan of those
because I think the exit interviews are
typically like especially when somebody
being fired they're so biased it doesn't
really matter the more important thing
to do is to examine why you hire them
shoot how do you tell the other
employees this is critical
and this is where management needs to
act to fight you have to act in a very
deliberate fashion in an honest way
without getting into detail which is
hard isn't it so hey everybody
Susan is no longer with the company this
was not her decision it was our decision
we felt there were things about her
performance here that weren't up to our
standards
we wish her all the best luck in the
world and if anybody has any questions
about it because we know Susan was
popular that's something we're willing
to discuss offline and you can email HR
or myself to discuss it later and then
that's it now if there's a teaching
opportunity where like the person's
stole or they got drunk at a party and
we're inappropriate you can add that man
you have to think about that but it was
something everybody knew anyway I don't
think it's that big of a deal again
always consult your attorneys and your
HR people but hey I know this is very
hard for people and people have heard
that Jason got really drunk at the
Christmas party and he said a bunch of
inappropriate things we really can't
tolerate that kind of behavior and it
doesn't represent the company so we let
him go this was very hard for us to do
we never liked to fire anybody and
certainly we're all embarrassed about
what happened but we feel pretty good
that this is the right thing to do and
usually again the person who's being
fired is sometimes delighted or relieved
and sometimes it takes a couple days
after the shock for that to happen and
then other times I've had teams come to
me and say why did it take you so long
everybody knows who the a-hole and the
company is everybody know who's who the
slacker and the company is it's so
apparent to the people in your company
who's not pulling their weight or who's
not appropriate for the culture that
when you do let them go it's like a sigh
of relief for anybody and everybody and
so be clear about it do you have to
offer a severance package no I don't
think so but I will say this you do have
to think about your own issues when it
comes to firing people and you don't
want to bring your own baggage to it so
what I've seen in a lot of cases is they
hire somebody they don't do a good job
for six weeks
and the person who paid them for those
six weeks the owner of the business the
CFO their direct manager whoever it is
feels like we got screwed oh my god they
work for us for six weeks we got screwed
and we wasted all that money and you
somehow want to get that back right
don't sweat it
don't sweat the small stuff if the
person didn't do a great job if they
tricked you if they lied if they were a
remote worker working on another project
when they were supposed to be working
for you you don't need to get your pound
of flesh from them you don't need to get
in a huge fight with them it's wasted
energy the fact that you got them out of
your company
is a huge reward for you and you can't
put a price on that it's like a great
scene in Mean Streets where it's a great
super sassy film where somebody loans
money to a guy and the guy doesn't pay
him back and he's all upset and the
other guy says you know what that guy's
been dodging you you hate that guy you
paid 20 but you lent them 200 bucks and
now you never have to see him again you
got a good deal I don't know the exact
wording you can look it up on Main
streets great film let's talk about
references this is where it gets sticky
I'll tell you what I do I don't ever
want to say anything bad about anybody I
don't ever want to limit somebody's
future options but it does get
complicated if your friend a very good
friend says to you I want to hire this
person they worked for you and let me
tell you this happens to me because I'm
a little bit high-profile that didn't
happen in the first 10 years of my
career but I can tell you it happens in
the last 10 years if you worked at one
of my companies people tend to know that
I'm the CEO of it and I have a pretty
easy email address to guess so my
friends say this person worked for you
they applied for this position should I
hire them if it's a great person I will
go to the end of the earth to get them a
job in fact I thought people leave my
company they give enough notice and you
know it's a nice break up you know if
it's not a nice break up that's a
different story
but if they give enough notice I will
actually tell them thank you for your
service
give me five companies you want to work
at and why and I will personally reach
out to the CEOs so I sort of take
references to another level which is if
you dedicated a year or two or three or
whatever it is to my startup I'm gonna
go to bat for you I want to see you
succeed because
is a small world and if you go to bat
for the people who work for you they're
gonna come back to work for you and I've
had people do second and third tours
with me and do some great work and so
you wanna really be a champion of your
future of your past employees because
they could be your future employees just
treat everybody well now what about if
the person had done something illegal in
your company or they really sucked and
you think they're gonna damage your
friends company oh boy you most
companies feel like you do not want to
give a bad reference because you might
be liable I don't know the legal issues
around that I've never heard it come to
pass what I do is something very simple
either I give a tremendous reference or
I'm not available to give a reference
it's a very mild way of saying I'm not
comfortable giving a reference but I
don't say that because that could
scratch out the other person I'm just
not available to give a reference at
this time the other person can read into
it what they will but I am NOT available
to give a reference and that means I
don't reply to the email or I don't
reply to the call I just deleted you
don't have obligations to reply and to
give a reference and the other person if
they are a friend of yours and you don't
give a reference well that should speak
volumes as well right and so I think
that's a delicate way to handle it
now what are the best practices if
you're the one getting fired okay number
one it's a learning experience you will
get fired at some point your career it's
inevitable it happens to everybody if
you get fired don't I know this is hard
to say but take a deep breath and don't
take it super personal you're gonna have
to think about what were the
circumstances under which you took the
job and how did you disappoint the boss
or any of the team or how was it not a
culture fit and what can you learn from
it what can you take away from it that's
basically what firing is firing is the
world telling you either you suck or you
didn't do your best work or you're not a
culture fit one of these things so
really do some introspection as to why
that happened now suing trying to keep
your job these are generally a waste of
time because if
you are trying to keep your job and they
want to fire you that's like somebody
breaking up with you and then dating
another person and then you go to them
like I know you left me for that person
but come back to me it's like so
desperate and unnecessary like the
person made a choice to not be with you
they don't love you they love this
person it's pathetic for you to try to
keep that relationship going and it's
also kind of weird and dysfunctional if
somebody doesn't want you go find
somebody who wants you now there are
exceptions here if you feel you were
discriminated against if you feel you
didn't get a fair shake or they could
have done a better job you know there's
a range of unfair firings and if it's an
unfair firing there is proper legal
recourse and you should pursue it and in
nine times out of ten it results in a
settlement I've seen it many times
somebody feels they were inappropriately
fired they get an attorney and the cost
of working that all out is ten twenty
thirty thousand dollars in legal bills
and every company has insurance for this
and then somebody gets written a check
that's worth 10 20 30 40 $50,000 some
percentage of a year of their salary
typically and the insurance company pays
for it the company doesn't pay for it so
if that does happen to your company and
it's unfair you didn't discriminate you
didn't harass the person it wasn't an
unfair firing just pay the five thousand
dollar deductible for your insurance and
learn from it and move on if it was your
fault hey that's a whole different story
then you need to really get help and
figure out why your dysfunctional
organization did something that resulted
in you being sued successfully but
generally in life and what makes the
United States such a great country is
that we have a fluidity in employment in
other countries France Scandinavian
countries you have to create a case go
to a court and basically fight for
sometimes years to fire somebody from
your own company
that's why France doesn't make great
companies because they don't have a
fluidity of talent that's why it's a lot
of these countries in Europe and other
countries have protected the worker so
much that they've created a
dysfunctional state
better if everybody can choose where
they work and an employer can choose who
gets to work for them
it does have some times unfair firings
but what it leads to is a fluidity of
startups where somebody can start a
company fail everybody gets fired and
they start again in other countries it's
very hard and you try one business model
you hire ten people who are designers
because you have a design based model
then your eyes oh we have to go to an
enterprise model we don't need the
designers anymore we need just one you
can't fire the nine designers so you
can't pivot the business model because
pivoting the business model requires
recalibrating the staff that's why it
doesn't work in other countries that's
why we're the greatest country in the
world when it comes to this stuff
there are times when it fails I cannot
lie that does happen but the legal
system here works pretty well in fact
most people would argue that the legal
system works too often and that people
unfairly abuse it so that's a lot of
information for you if there's any doubt
about a person in your company there's
generally no doubt you should fire them
that's just a general rubric if people
are like mmm this person really doesn't
fit and you get two or three people
saying that they don't fit get rid of
them I mean obviously do your diligence
and be considered about it but your gut
is generally right you've got to learn
from these mistakes and you got to be
better at hiring we take a long time
when we hire people at my companies and
if we have to fire somebody we look very
deeply in the mirror and say why did
this not work out and how do we the
employer learn from it be blunt to be
frank but you don't need to be meaning
you don't mean to be personal that's
again a rookie mistake if you're young
and you're firing somebody just say it's
not a fit or I think there's a better
place for you and they say oh please
tell me why you know why don't you say
the other side you don't think it's a
fit that give your skill and how we work
it's just a different kind of thing and
you're gonna be happy or somewhere else
you don't need to lay into the person
and say you're a passive aggressive
you're this thing you're that thing
because you know what most of the time
you're gonna be projecting anyway or
you're wasting time get back to work
let that person move on to their next
adventure take the emotion out of it and
if you're not able to handle these
things you need to build a proper
department and a proper process for
doing so have
great CEO oh we're a VP of Operations a
great HR company and outsource HR
company make sure you do things in a
button-up and fair fashion and learn
from your mistakes and really when you
have to fire somebody it's probably
because you made a mistake in hiring and
it's on you that's the one that's the
one thing I want you to get from this
that firing people is almost universally
a failure of management to hire the
right person and do their diligence
through references this has been I think
really great for me this series because
it's really helped me get clarity of
thought on a lot of these issues
thanks so much to my friends at Wilson
Sonsini for supporting this and frankly
Wilson Cecina has supported so many
great things for entrepreneurs from the
launch festival to other people's
conferences to other people's podcasts
so they're just a great group if you're
a start-up a hundred percent recommend
you use Wilson Sonsini as your attorneys
I send them literally dozens of
companies a year and I've never heard
anything but amazing feedback on the
team at Wilson Sonsini so thank you to
them and tune in again to some of the
other things we're gonna talk about like
raising money or picking a name for your
company we've got a lot of topics to
discuss on start-up basics and this is
but one see you next time
this is startup basics a new series
presented by our friends at WS gr yes
that's the amazing law firm Wilson
Sonsini that is in Silicon Valley and
many other cities they do a wonderful
job and we were talking we're having
lunch and we were recapping all the
success we've had over the years with
doing the launch festival and this week
in startups and we thought to ourselves
how could we really really really help
startups and entrepreneurs in 2014 and
the best answer we could come to was
answering their very basic questions
because my friends over there Todd and
other attorneys over there we answer the
same questions over and over again so we
thought wouldn't it be great if these
were just in a video where you could
pull them up anytime on your phone when
you're on the bus wherever and just hear
some frank advice now this is a
difficult one to do in a way because
it's about a negative time a negative
event in most people's estimation the
time when you have to fire somebody
it is incredibly challenging as an
entrepreneur to deal with this issue
especially when you're young and you
haven't done it before many people will
have a panic attack won't be able to
sleep will run to the bathroom and puke
will have their knee bouncing up and
down under the table when they have to
do this and you don't have to feel that
way
firing somebody is typically a great
relief for the person you're firing let
me say that one more time most of the
time when you fire somebody it's a
relief to them and in truth if you're
doing it for good reasons it is a great
learning opportunity for them and for
you because anytime you are firing
somebody two things have occurred that
person has not met your expectations and
you did not meet up you did not hire a
person who could meet your expectations
or some combination of that you did a
bad job hiring and or they did a bad job
at they did a bad job at their job now
when it gets to a senior executive then
it's even more pronounced because you
have no excuse if you're hiring somebody
who's worked for 10 20 30 years at
another company and they've done a great
job at those other companies and their
references checked out well then what
happened here we're all fallible
everybody makes mistakes you might not
have managed the person perfectly you
may not have given them instructions on
how to do their job properly you may
have hired the wrong person or you may
have thought you needed a skill set that
you don't so the first thing to do when
you're gonna fire somebody is to just
stop for a second and do some analysis
privately of did we hire the right
person to begin with and why did how did
we get here sir number one you should go
back and talk to the people who
interviewed that person and say and this
is before firing or after but I would
say generally before when we interviewed
Jason for the job as host of this week
in startups did it ever come up that he
doesn't really like to listen to other
people's input did it come up that he
has a temper did it come up that he
shows up to work late and did it come up
that he can be abrasive at times with
his feedback to people and roll his eyes
did all those things come up I'm just
making these things up okay these are
not real cases I'm just hypothetical
questions especially and if they did
come up in the references well then gosh
you guys as a team have something to
learn listen to the references and I
force in my companies there to be three
references and I force those references
to be checked in full before we ever
make an offer and I pre check what the
salary expectations are so we do not get
into the trap that I see so many people
get into which is they fall in love with
a candidate so much they're so sold on
them that they don't believe the
references or even worse they don't do
the references or they do some of the
references because they really want to
get an S in that seed to get the job
done that's the mistake typically so
when you're firing somebody you got to
do a bunch of introspection and say what
happened here now you should talk to
your HR department about all the legal
issues around firing somebody I'm just
talking in generalities about my
experience your experience may be
different so there's a huge legal
disclaimer here around all the stuff
but there is no disclaimer around having
done your proper research when hiring
somebody
I always insist that that person do the
same before you take my investment
dollars as an angel investor I ask
people do you want to speak to a couple
of the companies I've invested in
including some of the companies that
have failed and when I interact with
those company because I work for them in
a way in a very literal way I always
think God in my worst day as an angel
investor what did I do and how will that
how would that come across in a
reference and when situations go bad how
does that come across right so always
there should be a double reference check
going on and that an easy reference
check is here are three or four people
in our company go meet with them one on
one and have a discussion that's the
kind of stuff that will avoid people
having to be fired now
there are many reasons why people get
fired if we're talking about fraud or
stealing or sexual harassment or any
kind of malfeasance or misbehavior I am
A one strike you're out boss you are not
there to try to change people unless of
course you're their therapist you happen
to have hired them for your startup and
you happen to also be on the side their
personal therapist or career coach it is
not your job to try and fix people I
tell you this in such an emphatic way
because I tried to do this in my 20s I
thought I'm a psychology major I could
read people I have high emotional
intelligence I'm smart if somebody's not
getting the job done I could get inside
their head I can be their coach I can be
Pat Riley or or Phil Jackson and I can
motivate them uh-uh not gonna work
somebody grows up for 20 years in a
certain household with certain parents
or certain little idiosyncratic
behaviors and you think in your spare
time as the founder of your company that
you're gonna be able to change them it's
not going to happen and if it does it's
going to be a bizarre relationship where
you're trying to get inside people's
head and make them into something
they're not hire great people check
their references and if they do
something that is on you know this side
of ethics they have to go immediately
and it's a very quick conversation Jason
we are in this room to inform you that
we're letting you go
that's it you don't have to give a
reason you don't even have a give a
reason they could ask a thousand
questions in all likelihood you live in
a state and a country that has at will
work so a person can leave the company
at any time and you can have somebody
leave and you can just say it's not a
fit it's not a culture fit you don't
have to get into all the details and
when you get into all the details I
think that's when people things get very
emotional it gets kind of messy and so I
had a situation I'm going to tell you
about a situation I'm gonna change a
bunch of the facts around so that it's
you wouldn't know what company was or
any of that stuff but this is a kind of
a situation
somebody harasses somebody at work and I
called my HR friend a recruiter and I
said hey how do I deal with this because
I was a young person and she said here's
what you do you go into the room with
another person with HR or another senior
executive and you tell the person that
it's not working out that you heard
about this situation and it's not
acceptable and that you think there's a
better opportunity for this person
somewhere else but we no longer are
going to have a position for them here
at this company and they have two
choices here in this envelope are two
weeks of severance if you would like to
resign right now and move on to your
next adventure we can give you these two
weeks severance and it can be your
decision if not we're gonna fire you
right now with no severance and Joe is
gonna walk you to your desk to collect
your belongings and we wish you all the
luck in the world
that's it and boy if you do that no
person wants to be fired and everybody
would love to weeks of severance so go
ahead give them the severance they feel
good about it you can even have them
sign some forms on the way out talk to
your HR and legal people about that
sometimes people want to do
non-disclosures on the way out
you should have that on the way in
anyway and some people like to do exit
interviews I'm not a huge fan of those
because I think the exit interviews are
typically like especially when somebody
being fired they're so biased it doesn't
really matter the more important thing
to do is to examine why you hire them
shoot how do you tell the other
employees this is critical
and this is where management needs to
act to fight you have to act in a very
deliberate fashion in an honest way
without getting into detail which is
hard isn't it so hey everybody
Susan is no longer with the company this
was not her decision it was our decision
we felt there were things about her
performance here that weren't up to our
standards
we wish her all the best luck in the
world and if anybody has any questions
about it because we know Susan was
popular that's something we're willing
to discuss offline and you can email HR
or myself to discuss it later and then
that's it now if there's a teaching
opportunity where like the person's
stole or they got drunk at a party and
we're inappropriate you can add that man
you have to think about that but it was
something everybody knew anyway I don't
think it's that big of a deal again
always consult your attorneys and your
HR people but hey I know this is very
hard for people and people have heard
that Jason got really drunk at the
Christmas party and he said a bunch of
inappropriate things we really can't
tolerate that kind of behavior and it
doesn't represent the company so we let
him go this was very hard for us to do
we never liked to fire anybody and
certainly we're all embarrassed about
what happened but we feel pretty good
that this is the right thing to do and
usually again the person who's being
fired is sometimes delighted or relieved
and sometimes it takes a couple days
after the shock for that to happen and
then other times I've had teams come to
me and say why did it take you so long
everybody knows who the a-hole and the
company is everybody know who's who the
slacker and the company is it's so
apparent to the people in your company
who's not pulling their weight or who's
not appropriate for the culture that
when you do let them go it's like a sigh
of relief for anybody and everybody and
so be clear about it do you have to
offer a severance package no I don't
think so but I will say this you do have
to think about your own issues when it
comes to firing people and you don't
want to bring your own baggage to it so
what I've seen in a lot of cases is they
hire somebody they don't do a good job
for six weeks
and the person who paid them for those
six weeks the owner of the business the
CFO their direct manager whoever it is
feels like we got screwed oh my god they
work for us for six weeks we got screwed
and we wasted all that money and you
somehow want to get that back right
don't sweat it
don't sweat the small stuff if the
person didn't do a great job if they
tricked you if they lied if they were a
remote worker working on another project
when they were supposed to be working
for you you don't need to get your pound
of flesh from them you don't need to get
in a huge fight with them it's wasted
energy the fact that you got them out of
your company
is a huge reward for you and you can't
put a price on that it's like a great
scene in Mean Streets where it's a great
super sassy film where somebody loans
money to a guy and the guy doesn't pay
him back and he's all upset and the
other guy says you know what that guy's
been dodging you you hate that guy you
paid 20 but you lent them 200 bucks and
now you never have to see him again you
got a good deal I don't know the exact
wording you can look it up on Main
streets great film let's talk about
references this is where it gets sticky
I'll tell you what I do I don't ever
want to say anything bad about anybody I
don't ever want to limit somebody's
future options but it does get
complicated if your friend a very good
friend says to you I want to hire this
person they worked for you and let me
tell you this happens to me because I'm
a little bit high-profile that didn't
happen in the first 10 years of my
career but I can tell you it happens in
the last 10 years if you worked at one
of my companies people tend to know that
I'm the CEO of it and I have a pretty
easy email address to guess so my
friends say this person worked for you
they applied for this position should I
hire them if it's a great person I will
go to the end of the earth to get them a
job in fact I thought people leave my
company they give enough notice and you
know it's a nice break up you know if
it's not a nice break up that's a
different story
but if they give enough notice I will
actually tell them thank you for your
service
give me five companies you want to work
at and why and I will personally reach
out to the CEOs so I sort of take
references to another level which is if
you dedicated a year or two or three or
whatever it is to my startup I'm gonna
go to bat for you I want to see you
succeed because
is a small world and if you go to bat
for the people who work for you they're
gonna come back to work for you and I've
had people do second and third tours
with me and do some great work and so
you wanna really be a champion of your
future of your past employees because
they could be your future employees just
treat everybody well now what about if
the person had done something illegal in
your company or they really sucked and
you think they're gonna damage your
friends company oh boy you most
companies feel like you do not want to
give a bad reference because you might
be liable I don't know the legal issues
around that I've never heard it come to
pass what I do is something very simple
either I give a tremendous reference or
I'm not available to give a reference
it's a very mild way of saying I'm not
comfortable giving a reference but I
don't say that because that could
scratch out the other person I'm just
not available to give a reference at
this time the other person can read into
it what they will but I am NOT available
to give a reference and that means I
don't reply to the email or I don't
reply to the call I just deleted you
don't have obligations to reply and to
give a reference and the other person if
they are a friend of yours and you don't
give a reference well that should speak
volumes as well right and so I think
that's a delicate way to handle it
now what are the best practices if
you're the one getting fired okay number
one it's a learning experience you will
get fired at some point your career it's
inevitable it happens to everybody if
you get fired don't I know this is hard
to say but take a deep breath and don't
take it super personal you're gonna have
to think about what were the
circumstances under which you took the
job and how did you disappoint the boss
or any of the team or how was it not a
culture fit and what can you learn from
it what can you take away from it that's
basically what firing is firing is the
world telling you either you suck or you
didn't do your best work or you're not a
culture fit one of these things so
really do some introspection as to why
that happened now suing trying to keep
your job these are generally a waste of
time because if
you are trying to keep your job and they
want to fire you that's like somebody
breaking up with you and then dating
another person and then you go to them
like I know you left me for that person
but come back to me it's like so
desperate and unnecessary like the
person made a choice to not be with you
they don't love you they love this
person it's pathetic for you to try to
keep that relationship going and it's
also kind of weird and dysfunctional if
somebody doesn't want you go find
somebody who wants you now there are
exceptions here if you feel you were
discriminated against if you feel you
didn't get a fair shake or they could
have done a better job you know there's
a range of unfair firings and if it's an
unfair firing there is proper legal
recourse and you should pursue it and in
nine times out of ten it results in a
settlement I've seen it many times
somebody feels they were inappropriately
fired they get an attorney and the cost
of working that all out is ten twenty
thirty thousand dollars in legal bills
and every company has insurance for this
and then somebody gets written a check
that's worth 10 20 30 40 $50,000 some
percentage of a year of their salary
typically and the insurance company pays
for it the company doesn't pay for it so
if that does happen to your company and
it's unfair you didn't discriminate you
didn't harass the person it wasn't an
unfair firing just pay the five thousand
dollar deductible for your insurance and
learn from it and move on if it was your
fault hey that's a whole different story
then you need to really get help and
figure out why your dysfunctional
organization did something that resulted
in you being sued successfully but
generally in life and what makes the
United States such a great country is
that we have a fluidity in employment in
other countries France Scandinavian
countries you have to create a case go
to a court and basically fight for
sometimes years to fire somebody from
your own company
that's why France doesn't make great
companies because they don't have a
fluidity of talent that's why it's a lot
of these countries in Europe and other
countries have protected the worker so
much that they've created a
dysfunctional state
better if everybody can choose where
they work and an employer can choose who
gets to work for them
it does have some times unfair firings
but what it leads to is a fluidity of
startups where somebody can start a
company fail everybody gets fired and
they start again in other countries it's
very hard and you try one business model
you hire ten people who are designers
because you have a design based model
then your eyes oh we have to go to an
enterprise model we don't need the
designers anymore we need just one you
can't fire the nine designers so you
can't pivot the business model because
pivoting the business model requires
recalibrating the staff that's why it
doesn't work in other countries that's
why we're the greatest country in the
world when it comes to this stuff
there are times when it fails I cannot
lie that does happen but the legal
system here works pretty well in fact
most people would argue that the legal
system works too often and that people
unfairly abuse it so that's a lot of
information for you if there's any doubt
about a person in your company there's
generally no doubt you should fire them
that's just a general rubric if people
are like mmm this person really doesn't
fit and you get two or three people
saying that they don't fit get rid of
them I mean obviously do your diligence
and be considered about it but your gut
is generally right you've got to learn
from these mistakes and you got to be
better at hiring we take a long time
when we hire people at my companies and
if we have to fire somebody we look very
deeply in the mirror and say why did
this not work out and how do we the
employer learn from it be blunt to be
frank but you don't need to be meaning
you don't mean to be personal that's
again a rookie mistake if you're young
and you're firing somebody just say it's
not a fit or I think there's a better
place for you and they say oh please
tell me why you know why don't you say
the other side you don't think it's a
fit that give your skill and how we work
it's just a different kind of thing and
you're gonna be happy or somewhere else
you don't need to lay into the person
and say you're a passive aggressive
you're this thing you're that thing
because you know what most of the time
you're gonna be projecting anyway or
you're wasting time get back to work
let that person move on to their next
adventure take the emotion out of it and
if you're not able to handle these
things you need to build a proper
department and a proper process for
doing so have
great CEO oh we're a VP of Operations a
great HR company and outsource HR
company make sure you do things in a
button-up and fair fashion and learn
from your mistakes and really when you
have to fire somebody it's probably
because you made a mistake in hiring and
it's on you that's the one that's the
one thing I want you to get from this
that firing people is almost universally
a failure of management to hire the
right person and do their diligence
through references this has been I think
really great for me this series because
it's really helped me get clarity of
thought on a lot of these issues
thanks so much to my friends at Wilson
Sonsini for supporting this and frankly
Wilson Cecina has supported so many
great things for entrepreneurs from the
launch festival to other people's
conferences to other people's podcasts
so they're just a great group if you're
a start-up a hundred percent recommend
you use Wilson Sonsini as your attorneys
I send them literally dozens of
companies a year and I've never heard
anything but amazing feedback on the
team at Wilson Sonsini so thank you to
them and tune in again to some of the
other things we're gonna talk about like
raising money or picking a name for your
company we've got a lot of topics to
discuss on start-up basics and this is
but one see you next time
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