November 24, 2022

Small Business Advice

Terminating an Employee with Integrity

Jerry Osteryoung | 6/11/2007

Terminating an Employee with Integrity Following the Golden Rule in such situations makes sense. If you have to terminate an employee, do it as humanely as possible.
—Gerry Goldsholle, attorney and founder and chief executive of in Sausalito, CA


There is no question that firing an employee, with all the emotions it brings up, is a very difficult task. No one ever likes to inflict that pain on an employee. However, every business owner and manager will have to do this many times during their career. While it is hard, it normally works out best for both the employee and the business in the long run.

When you know you have to let someone go, make sure you have done your homework so that it does not backfire on you. Determine if the employee has violated the rules in the employee handbook or failed to live up to the job description, both common reasons for termination. However, you are perfectly within your rights to let an employee go if, for example, you just cannot afford them anymore.

Contrary to this belief, however, I have seen many entrepreneurs who are nice and generous, but are also tough negotiators. I do not think that these two attributes are mutually exclusive. You can be nice and still be firm on important positions.

Take extreme caution in making sure that your firing is not perceived as any type of discrimination such as age, gender, religion, national origin, disability or race. Defending a case of discrimination can cost tens, and sometimes even hundreds, of thousands of dollars.

Because of this potential for litigation, it is highly advisable that you conduct your terminations under the expertise of a seasoned employment lawyer. These individuals direct such terminations daily and can help to protect you.

During the actual termination interview, it is so important to have two people in the room to observe the behavior and just make sure things run smoothly. Firstly, thank the employee for their contribution to your company. Then, without blame or apology, simply tell them that the needs of the company and those of the employee no long match. You really must tell them very clearly that, after today, they will no longer be employed.

Frequently it is useful to give an employee a choice between resigning and being fired. Many prefer to resign as it allows them to avoid the stigma of having been fired. Additionally, if an employee resigns they will not receive unemployment compensation, which will help the rates you will have to pay for this insurance.

The next stage is to let the employee vent. However, you should not, and I repeat, should not argue with the employee, even if they are blaming the company or you. This serves no useful purpose.

Tell the employee what, if anything, you are going to give them (severance pay, for example). Let them know when they have to leave the premises and what property they need to return. It is also useful for your records to have them sign a statement that they have had this termination meeting. Finally, make sure that you keep the information about the termination private so as to protect the employee’s privacy.

It is often advisable to turn off the employee’s computer passwords during their termination interview so that they cannot damage your computer system.

When the employee is leaving, I think it is wise to shake their hand and thank them again for their service to the company.

Letting an employee go is very difficult, but it is best to take a straightforward approach. The sooner you do it, the better for both the firm and the employee.

You can do this!

Jerry Osteryoung is the Jim Moran Professor of Entrepreneurship in the College of Business at Florida State University. He is also the Director of the Entrepreneurship Program at FSU and Executive Director of the Jim Moran Institute of Global Entrepreneurship. He can be reached by e-mail at or by phone at 850-644-3372.

Tags: Florida Small Business

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