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When To Fire An Employee (or a Vendor)

Employees are the backbone of your business — but if you’re not careful, one wrong person can infect your entire infrastructure. In today’s episode, Chris equips you with strategies you need to know when it’s time to fire an employee. You’ll hear the system he uses in all of his businesses, the one thing you need to look out for in your relationships with employees, and why you can’t be afraid to lose a top-performer if their attitude is toxic. Letting go of a problematic employee is one of the best ways you can support your team, so dig into these tips before you let a bad apple spoil the bunch.

Knowing when to fire somebody is vital to keeping your team strong.

In this Episode:

  • Why you have to have a checklist for leaders on your team to keep track of employee issues and cover yourself legally
  • How Chris and his team use their checklist before terminating an employee
  • The one unwritten rule that Chris lives by and how it tells him when it’s time to let someone go
  • What happened to Chris’s business when he fired his top closer
  • Have a virus in your company? Here’s why your team needs you to take action

Enjoy the show? Check out the most popular episodes of Built to Grow!

Transcript:

One of the most important assets in any growing company are their employees but one of the biggest roadblocks to growing a company is an employee who doesn’t fit.

The sad part is that most employers wait way too long to fire an employee who’s not performing, and that ends up costing the company far more money, and those bad employees are like a virus that infects even the best team members.

How to Know When an Employee Is No Longer a Good Fit for Your Company

Not long ago I shot a video that showed how to avoid culture killers and in it, one of the things I spoke about was how to know when an employee or team member is no longer a good fit for your company.

And more importantly, I laid out a game plan for how to politely terminate your relationship with them before they infect the rest of your team.

Anyway, since then we’ve had a lot of questions about how to know when it’s time to cut someone loose. And I just saw another question like that come up today, so I wanted to spend just a moment and speak about this.

Company Checklist: Reasons Why Someone Is No Longer a Good Fit for Your Company

In my companies we have a checklist (and it’s important that you have a checklist too because this should be a policy that every leader on your team follows and they should follow it perfectly to help you avoid legal issues and the best way to do that is to have a formal checklist).

Anyway, we have a checklist that lists the reasons why someone is no longer a good fit for our company so much so that they need to be let go.

And there’s a lot of basic things on that list like dishonesty, fraud, slander, theft, continuous communication issues, poor performance, bad culture fit, violating company policy, persistent negativity.

And there’s more, but as soon as one of those checkboxes gets ticked off, we have a meeting with that employee and clearly discuss and document the issue.

And if they don’t improve after that meeting, they know they’re going to be let go.

The Unwritten Rule

But there’s one unwritten rule that I live by also, and although it’s not formerly on that list, it’s one of the most important by far.

It’s when you (as the owner, or CEO, or manager) of a company when you find yourself having arguments in your head with one of your employees.

And let me be clear here, I’m not talking about you having a personal issue with anyone. I’m referring to an employee who’s not meeting their targets or they’re constantly disruptive but maybe you’re afraid to fire them because you don’t have anyone else for that position yet.

Knowing When to Fire an Employee

Here’s an example, when I was in the health club industry had a 45 minute drive to the office every day, and on most days that was great, because I had meetings on the phone while I was driving, and when I had some quiet time during the drive I’d process a lot of stuff in my head and plan things out for the day.

It was great!

But there was one time that I had a person working for me who was probably the most arrogant team member I’ve ever met the kind of employee who swore that the reason the company was doing well was because of them and that if they left the company would crumble and if you’ve been an employer for any length of time, you know that kind of person is a virus.

But I was young, and I didn’t want to fire them because they were a great salesperson. That one person easily closed more sales then anybody else on our team at the time but after a while every day I’d drive 45 minutes to my office, and I’d have a 45-minute argument with that person in my head.

Or I’d keep revisiting a conversation we had the previous day and get madder and madder.

The end result was that that employee was a distraction to my team because they spoke down to everyone else and I was less productive because I couldn’t stop thinking about them in a bad way.

Within a week, that employee was fired, and our company grew more that quarter than anyone expected because we were a team again. And everyone on the team was motivated to grow.

“Knowing when to fire someone is vital to keeping your team strong.”

Meet Chris Guerriero

MEET CHRIS GUERRIERO

Chris is an entrepreneur, investor, bestselling author, and advisor to a handful of high growth companies.

He has built four 8-figure companies, developed winning leadership teams in six industries, and designed business systems that predictably grow multi-million dollar brands.

He’s been featured in financial periodicals such as: Success, Inc, Bloomberg TV, and in Entrepreneur as a top entrepreneurs of the time.

In addition to his own companies, Chris is also an advisor, investor and equity holder in companies across a variety of industries, including health, medical, digital advertising, legal and real estate.

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