Growing Pains: A Process for Cutting Ties with Long-Time Employees

As small business owners, we are constantly juggling issues: operations, sales, finance, human resources and more. It can be overwhelming, but we push on because entrepreneurship is in our blood. We get "high" from the rush of making decisions and being under pressure.

However, not all those daily tasks are things we like to do. HR is not something I enjoy. It has never been, but it is a mandatory part of being an owner-operator of a small business. Until the company is large enough to have a full-time human resources manager on staff, it is my responsibility to manage.

So, what do you do when the third generation enters the family business, you hire a full-time salesperson, start crafting a road map for growth, invest millions of dollars in a new building, technology, capital equipment and infrastructure, and have a 21-year veteran employee that is losing money for the business? You start talking.

We practice G-W-C. This is an employee rating tool developed by Gino Wickman, author of "Traction: Get a Grip on Your Business." This tool identifies if an employee "gets it," "wants it," and "has the capacity" to do their job. You rate the employee with a + or -. According to the book, if an employee gets just one -, you should terminate him/her. After your leadership team ranks the employee, you will get the needed answer.

Communication with the low-ranked employee is next. It is essential to meet with them and discuss the issues at stake. It is important to formally document these conversations, otherwise known as written warnings. This documentation is one thing I never learned growing up in the family business, but it is crucial if you want to grow and mature your business. Explain to the employee that these things must be corrected in X amount of time. If they do not fulfill the request, there will be a second written warning, which must be rectified in X amount of time.

This employee was failing. His jobs were not profitable, and he had difficulty adopting new technology. He was becoming complacent and did not seem to care. The new hires were watching and observing him, and he was setting a precedent for poor behavior.

The warnings were written; 1 and 2 with little to no

“Explain to the employee that these things must be corrected in X amount of time. If they do not fulfill the request, there will be a second written warning, which must be rectified in X amount of time.”

no improvement. We realized that turning him around would be nearly impossible. Therefore, the hard decision was made that we would part ways. It was not easy. The choice to terminate ranked as one of the top three hardest things I have had to do in my 40+ years in business.

The day and time were set. We planned on waiting until the end of the day, about 10 minutes before closing time to call him into the office. We contacted our outsourced HR company to ensure we had all our ducks in a row, as we needed everything legal in place: COBRA offer, unemployment, and so on. My anxiety level was super high.

The time came. I called him into the office with my operations manager explaining that we have been trying to correct written warnings over the past few months and unfortunately had not seen improvement. And, because of that, we felt that in the company's best interest, we should part ways.

At that moment, a 55-pound weight had been lifted off my shoulders. We got a little pushback but reiterated that there would be no negotiations and the decision is final. We had him sign the exit papers and explained his rights. He packed up his things and left.

Although agonizing, I knew it was the best decision for the company and him. I learned that I am investing my time, energy, resources and money to grow and operate a profitable company. If you have employees holding you back, you must decide that you cannot continue to employ someone who is not willing to grow with the company.