Pod Insights The $100 MBA Show The Right Way To Fire Good People Who Are Bad Employees About this episode Letting someone go when they are a genuinely good person can mess with you more than you expect. They show up with a great attitude, the team likes them, and you want so badly for it to work out. But when their performance keeps falling short, you’re left carrying the weight of a decision that feels personal, painful, and impossible to get right.
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0:27 Speaker 01 Today's episode is supported by Cash App. When it comes to Bitcoin, you may be surprised to learn that it was invented way back in 2008. But if you still haven't made the jump to Bitcoin yet, Cash App makes it easy. When you buy Bitcoin on Cash App, they hold real Bitcoin for you, one to one, and you can withdraw it anytime. It works more like real money and less like something locked in an account. No extra steps, no restrictions, just access and control when you need it. With Cash App, you can actually do that. For a limited time, new customers can get $10 added to their balance. Just use code BITCOIN10 when you sign up. And, don't forget this part, send at least $5 to a friend in the first two weeks. Terms apply.
1:10 Speaker 01 Cash App is a financial services platform, not a bank. Banking services provided by Cash App's bank partners. Bitcoin services provided by Block Incorporated brand. For additional information, see the Bitcoin disclosures at cash.app/legal/podcast. How do you fire somebody you genuinely like? Someone the whole team likes? Someone who shows up every day with a good attitude, that genuinely wants to contribute, but they simply can't do the job good enough? That is not a rare situation. It happens in almost every business that grows. Most business owners handle firing somebody pretty badly, especially people they like. Not because they're bad leaders, but because nobody ever taught them how to do it right.
1:53 Speaker 01 Today, I'm going to give you an exact process to follow, step by step. From the moment you realize something's wrong, to the moment you say goodbye. Let's get into it.
2:07 Speaker 01 Welcome back to the $100 MBA Show. I'm your host, Omar Zenhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday, to help you start, grow, and scale your business.
2:20 Speaker 01 I got a quick favorite ask. If this show has helped you in any way, leave me a quick review. You could do so wherever you listen to podcasts. This helps me and my team reach even more people who need the same no-fluff, practical business advice that you're getting from the show. It only takes a few seconds, but it makes a huge difference. Thanks for being a part of our journey to help others on their journey. I want to start by acknowledging a fact, a fact that we all have to admit if we're in this situation. It's your fault. You have to take ownership that you hired this person in the first place. Okay, who else's fault is it? It's yours. You're the person that hired them. I'm not saying this to be harsh or even to be funny.
3:01 Speaker 01 I'm saying this so that you can understand how serious hiring someone on your team is. You don't want to put yourself in this situation again. So you want to learn from this lesson and the situation you're in right now. When I was building my software company, Webinar Ninja, we hired a very expensive software engineer. Smart guy, great energy, family man, always the first to put their hand up, right? When we needed to get something done. Everyone on the team liked him. I liked him. And for a while, everybody was like, hey, this guy's cool. But about a year in, I started to notice things. I noticed that deadlines were starting to be missed. And then I found out something even worse. I found out that somebody else, another engineer on the team, was quietly doing their work for him, not just helping, doing it.
3:44 Speaker 01 And sometimes having to redo his work because his quality was just not there. We were paying two engineers to do one engineer's job, and I felt like an absolute loser in that moment, that I just made a mistake. And to be honest with you, I kind of felt like there was something wrong. I kind of let it go for too long because he was a good person. And confronting him would feel unkind. But here's what I know that I did not know then, okay? Keeping someone in a role they cannot perform in is not kind. It's actually the Opposite of kind. It costs the business, it costs your customers, but it's also not good for them. They don't like feeling behind. They don't like feeling like this is a bad fit. It also costs the team who has to compensate the gap that this person's costing.
4:29 Speaker 01 And the honest truth is, is that the person themselves, a person that's just not making it, the person that's underperforming, they deserve to be somewhere where they can actually thrive, where their skillset match the job they're in. Keeping him for as long as I did, costs us more than I wish to admit. And, you know, we all have mistakes. That's one of my many mistakes. The lesson here is liking someone is not a performance review, right? It's not a KPI to be liked. Of course, you want somebody that's friendly, somebody that gets along with the team, that's respectful, but being an enjoyable person to be around, that's just a bonus. It's not a requirement. So, step one, what do you do when you notice things are slipping? When you notice something's off, that maybe this is not the right fit?
5:13 Speaker 01 You have to have an honest conversation. Before you fire anyone, you need to be honest with them. You gotta give them a chance to recognize the problem and try to fix it. Be direct, be clear, be kind. Don't try to talk in code or in hints. Don't be vague. This is not the time to be vague. You want to give clear feedback, a real conversation, something that sounds like this. "Hey, Justin, I need to talk to you about your performance. You are not hitting the standard we need. And I want to be honest with you, and I want to make sure that this is super clear, because I think you deserve to know where things are right now, where they stand." Then you agree on a plan. The specific improvements you're looking for, a reasonable timeline for them to hit those milestones or those goals,
5:57 Speaker 01 and clear measurable expectations, something that they have control over. You want them to understand what success looks like in 30 days, in 60 days, in 90 days. Write it down, document it, and make sure you both agree to it. This conversation will do two things for you. It gives a person a genuine opportunity to turn things around. It ensures that if they don't turn things around, that they eventually understand they will be fired. They understand that is coming. It's not a surprise to them. No one ever is blindsided by losing their job when you go through this process. Anytime I went through this process and I had that conversation that eventually led to them being fired, they were relieved. They understood that this is coming.
6:41 Speaker 01 By having this agreement, by having this document, you put the ball in their court. They understand if they fail at what they agreed upon, then they will be fired. They understand that it's up to them whether they say or not. Step two, you want to follow through. And here's where a lot of people fail, okay? You have to have that honest conversation and then you need to set that improvement plan and then you have to follow through. A lot of people don't do this. Time passes, the performance does not improve, they don't check in in the 30 days or the 60 days like you agreed on, the manager finds reasons to delay, they get busy and nothing gets done. The problem does not get solved in your business. You might tell yourself, hey, they're going to something personal, I want to be sensitive to that, oh, things kind of improved last week but not this week.
7:25 Speaker 01 You kind of push the deadline, you don't stick to what you agreed to. This is a problem. This is a slow bleed that costs your business enormous amounts of time and money and it costs the morale of your team, which is very expensive. If you set a plan and a timeline, you must honor it. That's your job as the manager, as the business owner. The standard is not met by the agreed time, the agreed date, you must act. Not because you're heartless, but because that's what an efficient business looks like. You have a duty, you have a responsibility to your customers, to your teammates, to the business you built, honoring the thing you built. You can't just let this go.
8:08 Speaker 01 If this episode is giving you a framework that you've been missing, that you've been looking for, great. That's why I created today's episode. I want you to subscribe to the show because we have an upcoming episode I don't want you to miss. I go really deep on how Netflix grew to a $366 billion empire. I'm going to share their secrets and spoiler alert, has a lot to do how they grew their team. Subscribe so you don't miss it. Step three, the conversation itself, when you actually have to fire them. And here's exactly what the firing conversation will look like. You want to be short, you want to be honest, but you want to be humane. Something like this, "Hey, Justin, we're not a good fit for each other. We need to part ways. We had a few conversations about this already in the last few months. We agreed on a plan.
8:52 Speaker 01 We gave it a real amount of time and effort, but it's not working. And it's not working for either of us. We need a specific thing from you. We have not been able to get that specific outcome in the time we need it from you. I wish you well in your career. Your last day is today. HR is going to walk you through the next steps." And that's it. No long explanation, no over apologizing. You've already did all the work with the plan. They didn't execute the plan. They didn't hit their milestones. So they know this is coming and you've done all you could do. You're basically relaying a decision that's made. That's it. The conversation is there to communicate clearly and humanely that this relationship's over. Make it clear to them. Don't beat around the bush.
9:35 Speaker 01 Let them know today is their last day or whatever their last day is. Make sure it's not vague if they have a job or not. A lot of people are not clear. They're not concise when they're in this conversation. They talk too much. They soften the blow with a lot of filler and it becomes confusing for people. They apologize. They say, "Sorry." They say, "You know, I don't want to do this," and all kinds of stuff. It's very mixed messages when you do that. You want to make sure you're clear and you're precise. And that's what they deserve. They deserve to understand what's happening with no ambiguity. Don't leave the door in a way that gives false hope. Be clear, be kind. And the best way to do this is to force yourself to be brief. Today's episode is supported by Rosetta Stone.
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11:01 Speaker 01 It's a supportive way to build confidence before putting your language skills to use in real life. I've been using Rosetta Stone for over two years, and I actually can have some small Italian conversations with Nicole's mom now. Just the other day, she asked me, "When are you traveling?" And I said, "Dopo domani mattina," which means "after tomorrow morning." She was incredibly impressed I was able to answer in Italian. How could you put a price tag on a happy mother-in-law? If you want to take your language skills to the next level, don't wait to try Rosetta Stone Sapphire. The $100 BGA listeners can get 20% off the Rosetta Stone Sapphire subscription when they sign up today. This gets you access to Rosetta Stone Sapphire in 25 languages. Support for today's episode comes from Square. You probably know Square is the thing you tap your card on at your favorite coffee shop,
11:44 Speaker 01 restaurant, salon, or local store. But for the person running that business, Square is a whole lot more than a way to get paid. Square brings the tools you need to run and grow your business together in one system. From payments on appointments, to staff, inventory, sales, and customer relationships. Whether you're selling lattes, cutting hair, detailing cars, running a restaurant, or starting something new, Square keeps your business tools working together so you can focus less on managing the moving parts and more on what's next. And right now, listeners can get up to $200 off Square hardware when you sign up at square.com/go/mba. That's S-Q-U-A-R-E.com/go/mba. Visit Square to get started, because running a business is complicated enough. Your tools don't have to be.
12:31 Speaker 01 Step four: Handling the team. After the person has left, you need to talk to your team. Not before, but after, out of respect. And I like to be fully transparent in these matters. And here's why you have to be transparent. If someone resigns, the team should know that they didn't get fired, right? That they resigned. But on the flip side, the opposite is true. If some- Someone is fired, the team should know they did not resign. Because it's only fair for the people who remain on your team to understand what the standards are. This makes them feel proud to work with you, that you don't just keep anybody. This gets people going. It gets people understanding, hey, I'm here because I meet the standard. They also need to understand what gets somebody fired and what doesn't.
13:15 Speaker 01 You know, sometimes I had to fire people, not because of their performance, but because of their attitude, because they were a jerk. And that is not allowed. And they need to understand, you get fired when you're a jerk. And I don't want the team to be left with uncertainty and rumor. That is not good for morale. A team needs to understand the standard. They need to have clarity. You don't have to badmouth the person, but you need to make it clear why they got fired, right? Because of performance, because of attitude, because of maybe a breach of policy, whatever it might be. And here's something I learned about running high performing teams. A players wanna work with other A players. When you remove someone who's not performing, who's not an A player, the team does not grieve. They're like, I respect that. Thank you.
13:57 Speaker 01 Yeah, they might feel a little bit upset because the person was likable and nice. But underneath all that, they know that this person was not at their standard, was not at the standard of the team, and was holding them back. And they are working harder because of that, okay? Your job as a leader is to maintain the standard. That's your job. And they're expecting you to do your job. And when you do it, they respect you even more. Not only for the bottom line of the business, but for the people who are performing at the level you need them to perform. If you want people to improve, you want people to be motivated, be happy to go to work every day, you need to make sure they're surrounded with other people doing great things. And when people are not doing great things, when they're doing mediocre or below standard things, it drags the whole team down.
14:40 Speaker 01 I always like to thank the person publicly for their contributions to the team. I wish them genuinely well, and I make it clear to you that they're probably good for another team, but not our team. They don't meet the standard. That's not cruelty. That's honesty, and that's leadership. And that's you just putting the cards on the table so everybody understands how to win. Before I wrap up, I want to leave you with two things. I'm gonna tie it up in a bow, but before that, I need to be honest with you. Nine times out of 10, the person never improves. Anytime I feel in my gut, I have some doubt, there's something wrong here. This person's not what I thought they were. And I made a hiring mistake? Nine times out of 10, that gut feeling is right. And they don't improve. And they can't turn it around.
15:22 Speaker 01 Not because they don't want to, it's just that they don't have the skillset, they don't have the tools. But 10% of the time, they do. And they actually have a wake-up call and they surprise you. So this is why you go through the full process is because you want to make sure you try everything before you fire them and try to salvage the mistake you made by hiring them in the first place. So maybe you're able to turn them around, but in my experience, just so you know the statistics in my own experience, 90% of the time, nothing changes. So what's the plan? The moment their performance falls short and it's not to the standard, you have to have a conversation, you have to communicate this clearly and directly as soon as possible.
16:02 Speaker 01 You have to agree on an improvement plan with specific outcomes by specific times, deadlines. You need to follow through on those deadlines, check up, see how they're doing, see if they are indeed improving, if not you, their manager or whoever it might be, but you have to follow through on the plan. If they don't follow through, if they don't improve, you need to have a short conversation to let them go, to fire them. You have to be honest, you have to be humane, but you have to make it clear that a decision's made and you need to communicate it clearly. Do not make this a negotiation. It's not a negotiation, you know what you gotta do. And then finally be transparent with your team after the fact. You don't have to like dig up all the details and be nasty about it, but you do have to outline why they were fired.
16:45 Speaker 01 What is the thing that makes them not good enough to be on the team? And I like to even highlight the fact that this person was a good hang, a good person, it was fun to be around them and I enjoy the memories, but we need them to do XYZ and they're not doing it. Or in this case, they haven't done it and that's why they're no longer with the team. Don't avoid this. This is not only good for business, this is good for your leadership and your reputation with your team. Because something I learned the hard way in my years of management and leadership is that your team not only sees what you do, they see what you don't do. And that becomes the standard for the company. By the way, today's episode's topic comes from a question from a listener, Sharon.
17:26 Speaker 01 If you want to ask a question just like Sharon, you could submit it over at 100mba.net/queue and we might pick it up for an episode topic. Before I go, I just want to let you know that it took me years to figure out this framework, and I want to gift it to you because I don't want you to go through the heartache I went through and all the pain and anguish because one of the hardest things in business is dealing with other people because there's feelings involved. And you want to make sure you do what's right, but you have a responsibility towards your customers, your business, your teammates, everybody. And that's the burden that you have as the owner of the business. That's the responsibility. And that's why you get to have all the benefits of ownership and revenue and all that kind of stuff, but it's not for free. You're going to have to do the hard stuff as well. If you found today's episode helpful, awesome.
18:11 Speaker 01 I want you to subscribe to the show and I want to make sure that you check out a recent episode that we recently published called "How I Hire the Best People." Just go back in the feed, go back on whatever app you're looking at right now or using because firing can actually be avoided if you hire the right people. I outline my whole process in that episode. Go check it out. Thanks so much for making it to the end of the episode and being a part of our community here on the 100 MBA Show. I'm cheering you on from afar. Don't forget, you can reach out with a question over at 100mba.net/queue and we'll take care of you. If you found today's episode helpful and you want more practical business lessons to help you start, grow, and scale your business, the best thing you could do is subscribe to this podcast.
18:55 Speaker 01 Hit subscribe or follow on your favorite podcast app, the one that you're using right now, whether it's Apple or Spotify or wherever you listen to podcasts. By hitting subscribe, you get our next episode automatically and it's the best way to support the show. It's absolutely free and it's a way for you to commit to growing your business. And now that you've subscribed, I'll check you in the next episode.
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