Startup Recruiting — Why you have to Fire Fast

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“Whenever there is any doubt, there is no doubt”
- Sam, Ronin, 1998

It’s hard to fire an employee at your startup. The long hours, stress and shared victories create close relationships among team members. However, you can’t let your judgment be clouded if a team member isn’t performing. Here’s how and why you terminate bad hires fast.

Work Quality

Why Terminate
If the work an employee produces is consistently below your company’s standard, or misses reasonable deadlines; you should expect your customer’s experience to suffer. You need people who take a great deal of pride in their final output. If a team member does not execute, it’s best to let them go quickly, so you can both move on to a better fit.

How to Terminate
If the employee doesn’t respond to informal feedback, put them on a probation period of ~2 weeks. During this time they will be paired with someone excellent for real-time help, their manager significantly increases check-in frequency and depth, and it’s made clear in writing that they need to hit the probation goals, on time, to keep their job. Once the probation process starts, it usually ends with a departure, so talk to your lawyer in advance to get the right documents and process (e.g. severance pay is often tied to the signing of a non-disparagement agreement).

Team Disruption

Why Terminate
Startups need passionate people to be successful but conversations between team members should always be respectful and professional. If someone regularly steps outside of these rules, it can create unnecessary friction between team members and lower morale overall. Even if an employee has a unique skill-set, they’re unlikely to be more productive than a good team collaborating.

How to Terminate
Feedback right after incidents can be very effective in changing bad behavior and should be reinforced often through weekly manager 1on1s. If the employee is still causing issues, you can try to remove them from confrontational situations, but you may have to revert to a probation process. However, if a team member’s conversations have crossed into the realm of harassment, sexism, racism, etc., that is illegal and you must take quick action by involving your company lawyer (see “Ethical Issues” below).

Ethical Issues

Why Terminate
Trust is imperative for collaboration. If someone is dishonest or acting inappropriately, other team members will start to avoid them, hindering company progress. If an employee does something more serious and exposes the company to significant risk, then you have to respond immediately. If you don’t take swift and decisive action against the employee, you can kill your company.

How to Terminate
Even small slips, such as over-promising to close a sale, should be addressed through warnings and the probation process — so as to discourage worse behavior. If the issue relates to theft, violence, sexual harassment, racism etc: you must call your company lawyer, and put the employee on leave, immediately, pending investigation with no system access. While you may feel sympathy for the employee, your obligation is to the company and your remaining employees, so be prepared to take aggressive action to protect your team and business.

Terminating employees is one of toughest aspects of scaling your startup, but the longer you wait on the inevitable, the worse the outcome. Stick to a clear process and you’ll be doing the best for all involved.

This article is part of a series on Startup Hiring & HR.

Where to Find the Best People
How to Hire Great People
How Interview Projects Stop Bad Hires
How Startups Make Offers People Sign
7 Reasons to Give Employees More Equity
Why You Have to Fire Fast
How to Cut Your Startup’s Costs Without Layoffs
Doing Layoffs the Right Way

Sterling Road invests in pre-seed B2B startups based in North America. Full process here: sterlingroad.com/process.

You can reach me here: ash@sterlingroad.com

Thanks to Kaego Rust and David Smooke for their help on this article.
Photo by
Igor Ovsyannykov

Pre-seed Investor. Email: ash@sterlingroad.com. B2B, US only. I work with founders for 3 months before investing. More info: http://SterlingRoad.com/process

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