How to Fire Someone: A Business Owner’s Guide to Tough Conversations

Summary

Podcast Summary: Build Your Business: From Fear to Freedom
Episode: How to Fire Someone: A Business Owner’s Guide to Tough Conversations
Release Date: May 30, 2025
Hosts: Matt Reynolds and Chris Reynolds

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Introduction

In this episode of the Build Your Business Podcast, Matt and Chris Reynolds delve into one of the most challenging aspects of entrepreneurship: firing an employee. Recognizing that this is often a dreaded task for business owners and founders, the Reynolds brothers aim to provide both psychological insights and practical strategies to navigate these difficult conversations with dignity and effectiveness.

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Matt’s Early Experience with Firing

Matt opens the discussion by sharing his first experience firing an employee, expressing his discomfort and the lessons learned from that ordeal.

• Matt Reynolds (00:35): “And as promised, we're gonna dive into one of my least favorite topics, but something that's important to talk about, which is how to fire an employee, especially if it's your first time.”

He recounts the emotional turmoil and unpreparedness he felt, highlighting the importance of being ready for such conversations.

• Matt Reynolds (01:05): “I let her cry in my office for 47 minutes straight. Literally 47 minutes. And it was the most uncomfortable hour of my life.”

This experience served as a catalyst for Matt to research and refine his approach to firing employees, emphasizing the need to handle the process with respect and dignity.

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Overcoming the Fear of Firing

Chris elaborates on the emotional challenges associated with firing someone and the progression from anxiety to a more composed demeanor through experience.

• Chris Reynolds (03:23): “When you do it well, you are very calm in the process because you have come to believe some things that are different than what you think whenever you do it. Maybe the first time.”

Both hosts agree that while the act of firing is unpleasant, refining the process can lead to more controlled and less distressing outcomes.

• Matt Reynolds (04:29): “But I think at this point, when it has to happen, I still, I sleep like a baby that night, whereas on that first one, I did not sleep well for several nights afterwards because it was just like, oh, that was so gross.”

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Preparation and Documentation

A critical step in the process is thorough documentation, ensuring that the reason for termination is clear and legally sound.

• Matt Reynolds (05:32): “The first thing I do is I start documenting everything. So we go back through, we look at emails, we note... it's just the facts.”

This documentation helps protect the company from potential legal repercussions and provides a clear rationale for the termination.

• Matt Reynolds (07:09): “You have to have clear legal reasons that you're being let go. Right?”

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Conducting the Firing Meeting

The hosts outline the tactical steps involved in the actual firing meeting, emphasizing brevity and clarity.

• Matt Reynolds (13:00): "What I do, she listens to. I say we're gonna let you go. Yep, that's the first sentence."

They stress the importance of delivering the message succinctly to prevent prolonged discomfort for both parties.

• Chris Reynolds (19:05): “They may ask why, but they know why. So when time comes for this, I literally execute it like Moneyball.”

Referencing the movie Moneyball, Chris highlights the need for professionalism and decisiveness.

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Handling Employee Reactions

Fired employees may react in various emotional ways. The hosts discuss strategies to maintain composure and manage these reactions effectively.

• Matt Reynolds (26:00): “As you know, it is imperative that you stay unbelievably calm in the midst, no matter how they respond.”

Remaining calm helps in de-escalating potential confrontations and ensures the process remains respectful.

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Offboarding and Legal Considerations

Post-termination procedures are crucial to protect company assets and ensure a smooth transition.

• Matt Reynolds (28:52): “A release letter or severance package... they have to sign a document that gives legal protection to the company.”

Engaging an attorney to draft release letters ensures that the company is safeguarded against future legal issues.

• Chris Reynolds (30:22): “Like any legal stuff breaks an NDA super fast.”

They discuss the importance of Non-Disclosure Agreements (NDAs) and the legal boundaries associated with them.

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Communicating to Remaining Staff

After terminating an employee, it's essential to inform the remaining team members appropriately to maintain trust and morale.

• Matt Reynolds (38:40): “It's nobody's business. They're going to find out anyway because they've got friends.”

The communication should focus on factual information without delving into the reasons behind the termination.

• Chris Reynolds (39:37): “We will be working to fill this role in the next X, whatever that is.”

Providing clarity on how the company plans to move forward helps in mitigating uncertainty among remaining employees.

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Final Thoughts and Encouragement

The episode concludes with encouragement for business owners to develop the skill of having tough conversations, emphasizing personal and organizational growth.

• Chris Reynolds (43:57): “Do not put it off. Let the things we talked about that drive value not just for the organization, but for you, your staff, and the future human that is a superstar that needs that slot.”

• Matt Reynolds (46:19): “Every time you have to have one of those conversations, multiple people grow.”

They reinforce the idea that while firing someone is difficult, handling it correctly can lead to a healthier, more effective workplace.

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Key Takeaways

1. Preparation is Crucial: Document performance issues meticulously to provide a clear, factual basis for termination.
2. Stay Composed: Maintain calmness during the firing meeting to handle emotional reactions effectively.
3. Legal Safeguards: Use release letters and severance packages drafted by attorneys to protect the company.
4. Respect and Dignity: Treat the terminated employee with respect to preserve their dignity and minimize negative fallout.
5. Clear Communication: Inform remaining staff with factual information to maintain trust and morale.
6. Personal Growth: Developing the ability to have tough conversations contributes to personal and organizational growth.

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This episode serves as a comprehensive guide for business owners and startup founders, equipping them with the knowledge and strategies needed to handle the difficult process of firing employees with confidence and integrity.

Transcript

[Chris Reynolds]

You're listening to the Build you'd business podcast, powered by Turnkey Coach, where we help business owners find freedom over fear. I'm Matt Reynolds and I'm his brother, Chris Reynolds.

[Matt Reynolds]

Join us as we help build your business and move from fear to freedom together. You're listening to the Build you'd business podcast. I'm your co host, Matt Reynolds. I'm here with my brother Chris. What's up, man?

[Chris Reynolds]

Hey, what's going on?

[Matt Reynolds]

And as promised, we're gonna dive into one of my least favorite topics, but something that's important to talk about, which is how to fire an employee, especially if it's your first time. But there are always lessons learned every time you do this. I hate this. As should everyone, unless you are a sociopath, at which point maybe you enjoy it. So most people hate confrontation. Certainly the book Crucial Confrontations, Crucial Conversations was called one and then they changed the name. Is very good at walking through kind of the psychology of this stuff. We're going to give you a good quick overview and then tactically what we do. I'd love to tell my first story or the time I fired my first employee, which was a receptionist at the front desk, staff at the gym, and it was a female. I had never fired anybody. They were just underperforming, showing up late, all the typical kind of things. And my co owners were in the office with me. And so there was a witness in there, which I think is important we can talk about for sure. And I took too long to get to the point. And then I let her cry in my office for 47 minutes straight. Literally 47 minutes. And it was the most uncomfortable hour of my life. And I was like, well, that did not go well. And it just kind of came as a total surprise. And the reality was it's all on me. I wasn't prepared. I didn't know what I was doing. It was like, look, this person has to go. And I called you and you said, oh, yeah, you completely screwed that whole thing up. And so I started to do. And this is many years ago. I mean, this is like, this is. Gosh, it's probably 2011, something like that. So you're talking about pushing 15 years now, started to do some research on how to do this and do it well and help people have dignity. And throughout that process, whether they. There's times when you fire somebody and they do a heinous act, like we talked about last week, there are times when they're just not a good fit, but they're a Perfectly good person. And there's times when you have to lay people off where it's entirely your fault. How you approach those are a little bit different. But honestly, tactically, it's not that different in the way it works.

[Chris Reynolds]

That's right.

[Matt Reynolds]

And so I'll stop there and let you kind of give any preamble that you want to give. Before we start to get into the details of actually how we go about.

[Chris Reynolds]

This, a little background on my story. It was so uncomfortable the first time I did it. I was nervous. I knew I was going to do it. I was nervous for days before. Hated it, didn't want to do it, didn't do it well. Like, I would say, like, like definitely too nervous to do it well. You know what I mean? Like, I think when you do it well, you are, you are very calm in the process because you, you have come to believe some things that are different than what you think whenever you do it. Maybe the first time.

[Matt Reynolds]

Sure.

[Chris Reynolds]

And I. So I think that's really, really important. I think when you think about firing somebody, you can reframe that into a conversation that you're having about how to put them in the job that's right for them. And so that's correct. That's the way you do it. As you get more comfortable with that and you actually believe it and like, you believe it, it's not something you're like, oh, I'm going to tell myself this, so it's okay.

[Matt Reynolds]

Sure.

[Chris Reynolds]

It's more like, no, this person really isn't in the right position. You can actually have a calm conversation. You don't need to be nervous about it. You can still hate it. That's fine. There's nothing wrong with hating it because you're going to put somebody through some. A rough period of time that should be a short period of time for them. And usually it. But everybody hates it at first. It's difficult to do at first. I still hate it. No good, no good founder, no good entrepreneur. Makes it very long before having to do this. Sure. And a skilled entrepreneur, skilled founder is good at it. I would say good at it to the degree that they know how to do it. They're comfortable in doing it. But agreed. Also, you know, you're a sociopath. If you like it, like, shouldn't like it.

[Matt Reynolds]

But I think at this point, when it has to happen, I still, I sleep like a baby that night, whereas on that first one, I did not sleep well for several nights afterwards because it was just like, oh, that was so gross. We Kind of got into this last week, so I don't want to spend a ton of time on it. But when you know that it's the right time to fire somebody, they're not a good fit. You've moved them around on the org chart a couple of times, which is a max more than two times. And they're just not a fit in the business. And they might even be very likable, very skilled. They're just not a fit in your company or they've done something that's just like, look, this is, unfortunately this is the only choice you're left with is to fire them. And then sometimes again you're in a position where you've got to cut payroll or you don't have a need for that position anymore. And then unfortunately you have to have that hard conversation. It's like it's not you, it's me sort of thing, which is really not fun. Um, but once you know that it's time to fire or you, you even start to get an inkling of going that way. The first thing I do is I start documenting everything.

[Chris Reynolds]

Yeah.

[Matt Reynolds]

So we go back through, we look at emails, we note and this just privately, typically between me and their, their manager, their or their direct report and, and, and potentially head of hr. And you're just documenting and it, you're not. And it's just the facts. You're not weaving opinion into this. You know, it's not subjective. It's this thing happened and a warning was given, had a conversation with them, with another person and the behavior didn't change, whatever the thing is. So that when a person is an employee, it often comes with some rights to employment. And so you can't just fire somebody typically if they're a full time salary employee, especially if they're management, upper management, sometimes it's called an at will employee. You can fire them, they can leave any time they want, they're not really contractually obligated to work for you and vice versa. A contractor is always that way. But as certainly as they come up the chain, the totem pole in the business, there are some rights to that employment. And you've got to have a good reason. You can't just, you've got to be really careful in today's litigious world that you're firing for the right reasons. Right. That, not just that as an owner, I don't want to be nervous that someone's going to say, oh, he fired me because my demographic was this or because I wasn't of the Same political belief or religious like. And not only are they not going to get fired for that I want to be on. It's beyond a shadow of a doubt. There are clear legal reasons that you're being let go. Right?

[Chris Reynolds]

Yeah.

[Matt Reynolds]

And so then we start to document. So it's kind of the first two steps. This is the pre work that occurs before the actual firing itself.

[Chris Reynolds]

When somebody gets fired, it should never come as a surprise.

[Matt Reynolds]

Right, Right.

[Chris Reynolds]

Like let's, like that's rule number one. Like if it comes as a surprise, you did not do your job as a manager. Like you should have made it clear to them along the way that they were underperforming. Like it was really clear that's what's going on. And you need to have those hard conversations regularly enough with them that it is like they're frustrated that they can't hit the mark.

[Matt Reynolds]

Right.

[Chris Reynolds]

That's the idea.

[Matt Reynolds]

Those things are discussed in one on ones and performance reviews and things. Unless some sort of scandal has occurred overnight and you were blind to it and then boom, it hits 100%. But even at that point, especially once they find out that my boss knows I was embezzling money from the company, they gotta know that the firing's coming.

[Chris Reynolds]

That's right.

[Matt Reynolds]

But typically they're not surprised.

[Chris Reynolds]

Frequently I see this and I've, I've employed these many times. You can actually do a full write up plan called a PIP or performance improvement plan.

[Matt Reynolds]

Sure.

[Chris Reynolds]

And that performance improvement plan is something that it's hard. Like it's not hard to write, it's hard to deliver. Like you need to be solid on what you're saying. Like it is, you did this. Like it's all facts. Just like, just like you're saying, it's like you did this. This was my expectation. Didn't meet the expectation. I gave you this warning all the way down the line so that it's.

[Matt Reynolds]

Clear that PIP is typically like a official warning in employment that your boss or your manager is saying you are not performing to standard. And it typically has a time limit on it. In the next three to six months or three months or whatever, you are expected to come up to standard.

[Chris Reynolds]

That's right.

[Matt Reynolds]

And we want to see a linear movement that direction from starting right now.

[Chris Reynolds]

That's right.

[Matt Reynolds]

And so you know, it's not that you have to then wait six months. If you gave a six month or three month or whatever it is for them to come up to standard two weeks later, they may have been, they may have gotten worse. And you don't have to wait six months.

[Chris Reynolds]

Yeah.

[Matt Reynolds]

Remember how we talked about this thing, that it's actually gotten worse or hasn't improved at all. And so time to go. Once you've made the decision, the next thing is to set up the meeting. And what I do first is I discuss it with my leadership team, with my mission control team. So not my whole leadership team, but mission control. The people who are there making the decisions. Often someone who is getting fired is under someone else's management. I will often let them do they want to at this point? Not because they want to, but because they know it's really their responsibility to fire a subordinate, not necessarily the CEO. Sometimes they want me in the room or on the call. They always record the call, but we always make sure there's a witness. But we discuss it as a team first and we put a plan in place. Okay. So we think through the things like, okay, what passwords does, especially in an online business, what unique IP does this person have access to? If they just got really pissed off in the hour after they got fired, they could go in and they could just wreak havoc. Right. Computers or assets, do they like hard assets? Do they have that we need to get back from them in a short order, short period of time, and also make it easy for them. A lot of times I'll send somebody to go get it or something. When we were at the gym. What stuff do they have in the business that has to be personal items, personal effects that need to be taken out? I have both. Depending on how high they are up in the chain, how long they've worked in the business, I've allowed them to gather their stuff, especially if they have a private office or something. But if they didn't, I've also had times where I've had someone else gather all their stuff and put it in the black and yellow bins. In the meeting where you fire them, you say like, hey, all your stuff's right here and Dylan's going to help walk you out to the car and good luck to you. Right. And so we'll get there. So first we meet with the leadership and we put a plan in place. And what that usually looks like for us online is while, let's say, myself and our head of hr, Nikki Sims, are maybe doing the call with somebody on Zoom, my cio. He is shutting down their business email so they don't have access to business email. Shutting down their access to all of our contact lists so they can't steal the contacts. Here's the thing. I'LL say about that. It feels really gross. That's actually to me, the grossest part of the whole thing. Feeling part. Because you know that there is a 99.9% chance that they're not going to do anything in retaliation.

[Chris Reynolds]

That's right. Yeah.

[Matt Reynolds]

You have a fiduciary duty to your business and your shareholders and your investors to protect that information. So you have to take it from them, unfortunately.

[Chris Reynolds]

That's right.

[Matt Reynolds]

And often that is the thing that actually pisses them off more than the firing. They'll get fired and then they immediately try to log into their email account in the next 10 minutes and they realize they've been locked out and they get extra pissed off. At least I've noticed that. To me, the bigger blowups have often occurred afterwards. And so we've started to just address that during the meeting itself to, to take the wind out of those sails as quickly as we can. So meeting with, with the leadership first, anybody that's going to be involved, put a plan in place. We literally do it to the minute. I mean 1043, this is going to happen 1044, this is going to happen 1040. And by the way, if that goes longer than about four minutes, you went too long.

[Chris Reynolds]

Yeah, agreed.

[Matt Reynolds]

You got about four minutes to get em in, get em out, get the stuff, shut down all the technology stuff and we're done. Okay, so then you set up the meeting with the employee and that should be set up quickly. Hey, tomorrow morning we're gonna meet first thing in my office or it's at the end of the day. My least favorite thing in the world is when someone says, hey, can I talk to you about something on Thursday? Next Thursday? Like our mom is famous for this. Oh yeah, I'm like, about what? Like you don't want me to sleep from now till next Thursday.

[Chris Reynolds]

Love you, mom.

[Matt Reynolds]

So what I do, she listens to.

[Chris Reynolds]

The podcast and she's going to have hurt feelings about this.

[Matt Reynolds]

Most of the Rachel's mom does it too. She did it just the other day. And there are generations which shall remain nameless who have not learned proper etiquette in texting or whatever. In Texas. Say, can I come over and can we have a talk next week? Is dad dying of cancer? Like what's going on? That's kind of the thing. So typically when I my go to when I need to have a conversation with somebody, I always say like, especially when it's coming from me and it's the CEO, it's like, hey, can I talk to you on Thursday, by the way, it's all good. I've got something cool that's coming up in the business. I just want to share it with you. I think that you might be able to take part in it, something like that. So just like they don't have to be worried. Right. If I have set the precedent that that is what I say and then I say that three days before I'm going to fire somebody, they're going to freak out.

[Chris Reynolds]

Yeah.

[Matt Reynolds]

So it's like a couple hours. Typically it's not very long. Right. Maybe it's at the end of the day, but often it's like at lunch or mid afternoon it's like, hey, at 5:00pm or 4:45 I need you to come into my office or we're going to do this call and you're ready to go and the whole team's ready and you check in with the leadership team who's everybody's got responsibilities and things to do. And now we get into the meeting, so I'll stop there. Anything else before we get to the meeting itself?

[Chris Reynolds]

I would just say that the news of this needs to stay so tight that like you need a culture around this idea that your close leadership team keeps this stuff close to their chest. If they don't, they need to not be on the team. Like it's like this stuff happens and the only way really bad stuff happens is if this leaks.

[Matt Reynolds]

Yes.

[Chris Reynolds]

Ahead of time.

[Matt Reynolds]

That's right.

[Chris Reynolds]

So just be absolutely sure that everybody understands how important it is that this is not supposed to leak.

[Matt Reynolds]

Correct.

[Chris Reynolds]

It needs to happen when it's going to happen and no one else knows it's coming.

[Matt Reynolds]

We have four people on mission control, which includes myself and I completely trust all four of them. And I will have this discussion with all four of them that we're going to do it. Two of those four will be on the call or be on the meeting and the other two may be doing things not on the meeting but also still working. And then maybe not. Maybe there's one other person that's just like they're not really involved but they know about it and they're okay, I understand. So we're good to go. And nobody else knows. And so it does sometimes come as a surprise to your employees that so and so doesn't work here anymore. So the meeting itself, shortest possible.

[Chris Reynolds]

Yep.

[Matt Reynolds]

I remember you told me and again, this is like 11, 12 years ago you were like set a buzzer alarm on your cell phone and when they walk in you hit start and in like two Minutes. When you feel it buzzing in your pocket, get them out of your office.

[Chris Reynolds]

That's too long.

[Matt Reynolds]

Yeah, that's it.

[Chris Reynolds]

That's right.

[Matt Reynolds]

And so one of our favorite movies is Moneyball. We both love it. You know, Billy Beane, Brad Pitt's character, is talking to Jonah Hill, who's his understudies, the guy that kind of came up with saber metrics and stuff. And they're. If you haven't. Most people have probably seen Moneyball, know the. But it's kind of the rise of the Oakland Days Athletics. The Oakland Athletics in the late 90s, I think, is when it was. They have to let a player go or they have to trade a player. And Billy tells Jonah Hill, his understudy says, why don't you do it? He's like, no, I don't want to do it. You know, and he's like, come on, just do it. It's just, you know, they're professionals. They can take it. He's like, I don't want to. And he says, like a bullet to the brain. He's like, look, would you rather get shot in the head or five in the chest and bleed to death?

[Chris Reynolds]

That's right.

[Matt Reynolds]

And Jonah Hill goes, neither. I don't think he goes, but you got to understand, they're professionals, so get it over with. And so the first thing I say when they walk in after the. Thank you so much for being here. Want to let you know we've made the decision to let you go. Yep, that's the first sentence. Now, I don't pander around it. I also don't go into the whys a lot after that. I'm interested because you and I did not talk about this part. But it is very basic facts. We're gonna let you go. I almost always pay people even without a severance package, at least through the end of the next pay period.

[Chris Reynolds]

Yeah.

[Matt Reynolds]

And we'll get into severance packages and things here in a minute for longer term salary type employees. So I'm gonna say we're gonna let you go. Your stuff is packed up. Or we're gonna have so and so escort you to your. If you. If you have a hq, here's the list of things that you'll need to send back. We just go through the basic facts and then say, look, I know that this is pro. This is really hard to hear. And I am happy to discuss in a few more details next week if you want to set up a call like next Thursday. Happy to do that. No one has ever set up that call, everyone wants to know why in the heat of the moment, while they're trying to hold back tears and they got a knot in their throat, you just want to give them the facts. And hey, good luck to you. And often I'll say the things that you said last week, it's just not a good fit here. And I think that you would have a good fit somewhere else. And I want to help you do that. And in the moment, they probably don't believe that. But you, if you are really honest about it, you'll say, look, if they didn't do something heinous, then you'll often say, look, I'm happy to give you a good reference somewhere. I'm happy to help help you with your next job finding process. I want to see you succeed in your next job. And it's just not working here. You're not succeeding here. And so this is going to be better for you and better for the business in the long run. That hurts right now. I know it sucks, by the way. I've been fired before and it sucks. It sucks. But thank you so much for your service. Good luck to you, sir. Stand up, shake their hand and they're out the door. Like, that's generally how I do it.

[Chris Reynolds]

I think if you do it right ahead of time. So again, thinking about like the performance improvement plan, thinking about the one on ones where you're like, look, you're, I want to be super clear. Like, you're not cutting it. Like, it's not, you're not hitting the quality bar that we need to hit.

[Matt Reynolds]

Yeah.

[Chris Reynolds]

They may ask why, but they know why.

[Matt Reynolds]

Sure.

[Chris Reynolds]

So I don't need to explain anything. So when time comes for this, I literally execute it like Moneyball. It's like two sentences and I'm like, such and such has the details, you know.

[Matt Reynolds]

Yeah, that's, that's worked really nice with Moneyballs. He's like, Karen's got the details out in the hallway and he fires them in some of the secretary and she's got the details. Your job is to let them know you've got to break the bad news. Right. Unfortunately, we've made the decision to end your employment as effective today. Now the good news is we're going to go ahead and pay you for the next pay period, for the next two weeks or whatever it is, or a severance agreement from us in the next 24 hours. You're free to review and sign if you wish. And so we can talk through that if you want to know details about that so again, Karen's got it in the office again, if you're online, it's like it's going to be emailed to you in the next 24 hours. Or, you know, head HR is already. It's already in your email inbox. You know, things like that. And then just get them out. Because after that, I mean, it's very hard even for rational people to make rational decisions or ask rational questions in a very emotional time. Like, for me, for you, like, people who are very logical, even to a fault. There are times when I am so pissed off or even so happy or whatever. The thing is that I need a minute to make. If I have to make a wise decision, I need a few minutes of silence to kind of sit there and consider the thing that's hard to do in a room or on a zoom call where the other executives are on the call. And so you just get the facts and the details over with and you end the call. Like, that's. Thank you so much for being here. Thanks for the time served at Barbellogic or Strong gym or whatever it is. Good luck to you and whatever. And that's. And then they leave.

[Chris Reynolds]

The thing that you want to really avoid here is the. The possibility that you are swayable because you want to talk about a really uncomfortable situation is when you come off a little wishy washy about it. Yeah, man, I'm really sorry, you know, like. No, you're not sorry.

[Matt Reynolds]

None of that. Right?

[Chris Reynolds]

None of that.

[Matt Reynolds]

Well, you may be sorry, but you're not gonna say. You may not gonna be say. You're not gonna say you're sorry.

[Chris Reynolds]

Yeah, forget about that.

[Matt Reynolds]

You might have really. You might have really spend a bunch of time, like, chewing on whether or not you should do this or not. You're not going to say that either?

[Chris Reynolds]

No. And it's not you, it's me. Really doesn't work here. Because what they will do is they will try to start negotiating with you.

[Matt Reynolds]

Sure. Right.

[Chris Reynolds]

And that is not going to work. Like, it needs to be super clear, however you decide to do it, and it needs to be your style, but however you decide to do it needs to be really, really clear that the decision is final. Like, the decision is final. Like, paperwork is done. You've been pulled out of the system. There's nothing left to be done here. Right. Like, don't be the.

[Matt Reynolds]

This is the girlfriend boyfriend problem that you see all the time. I did this. Everybody does this when they're teenagers and you break up with the boyfriend or girlfriend and Then you take them back two days later. Or like they're able, you know, and especially in today's world, well, they'll start blowing up your phone and text you and they'll sway you and they'll get you in an emotional moment and you'll decide to give them another chance. Nope, that doesn't. That's not gonna happen here. And so you're straightforward. Clearly state the decision quickly. You're not talking about why you don't want to get into. And you gotta be really careful, by the way, with talking about why. Because it's also if, especially if this is your first time, you're nervous and you'll try to be political and careful and you'll end up saying something that will come across as they've been fired for a reason that might not be legal to fire them. And that's not really why they were fired. It's not. It's not the time to talk reasons. Reasons are really well done by your attorney in a letter or in an email by your attorney. Right. Because you did not meet the goals stated in the performance improvement plan from September 2, 2024, your employment has been ended with the company. And that's all written by your attorney. Like, they know how to write those things in the heat of the moment is not the time for you to talk about it.

[Chris Reynolds]

This is just another reason why it's so important that you follow reasonable procedures here to make sure that they know ahead of time why this is happening. Right. Well, ahead of time that you've done the performance improvement plan, you've gone through the process, it's not the first meeting where they found out that they, you know, are not meeting expectations.

[Matt Reynolds]

That's right.

[Chris Reynolds]

All of that stuff should make everything here reasonably clear. If you don't have, like, if you're of a size where you don't have like an HR person on staff. One thing that I think works really well is if you are more than one person in your organization, there's a second founder or something. Have one of you deliver the news, have the other one be the practical bits that happen afterwards.

[Matt Reynolds]

Sure.

[Chris Reynolds]

Those two different roles can kind of serve two different purposes, and I think that can be valuable. So you might have one founder go in and do the billionaire being, you know. Yeah. Sorry to say this, but you know, we've. We decided to end your employment. And this is, you know, Karen's got the details.

[Matt Reynolds]

Yeah.

[Chris Reynolds]

And then your other founder, Karen in this case will be the one who comes in and says, you know, here's what's going on? We're going to pay you until the end of whatever.

[Matt Reynolds]

They.

[Chris Reynolds]

Initially. Here's what they're thinking. Well, first of all, initially, they're shocked. Even if. Even if they knew it was coming like that, it's happening today. And this is the thing. And they're angry and they're sad and they're disappointed with themselves, but they might act like they're disappointed with you. They're. There's just a bunch of emotion, human stuff happening.

[Matt Reynolds]

Sure.

[Chris Reynolds]

The very next thing that's gonna happen in their head is they're gonna think like, oh, no, they're gonna. I need to get paid.

[Matt Reynolds]

Yeah. They're scared.

[Chris Reynolds]

Right. Because most people. And this is not a knock on most people, Most people live paycheck to paycheck.

[Matt Reynolds]

Correct. Right.

[Chris Reynolds]

Like, and that's. Look, I lived paycheck to paycheck for many, many, many years. So I get it. You need that paycheck. So they're thinking, what am I going to do in the situation? Like, they're really nervous. They're scared. They're trying to figure it out. By the way, that is not your problem. But you definitely. This is why you want to do the good guy thing and make sure they get paid up to a reasonable point in time, like through the end of the following pay period or whatever.

[Matt Reynolds]

Yeah, yeah.

[Chris Reynolds]

Right. Like, however you fire them at the.

[Matt Reynolds]

Beginning of a pay period, you pay them through the end of the pay period. If you fire them at the end of the pay period, you go ahead and pay them for the next pay period. Whatever. Like, we're going to pay you through the end of the month. Yeah. And give them space to be able.

[Chris Reynolds]

To at least figure out if they have to go do something temporary to make sure they can pay their bills, you know, like, be a good person and make sure that that happens. But don't negotiate. There's no negotiation. It's all done. This is the way it's going to go down. And you just want to make sure that it is crystal clear, you've covered your bases. Because the reason this is happening is they didn't meet the performance standards.

[Matt Reynolds]

That's right.

[Chris Reynolds]

That's all it is. And that you gave them ample time and opportunity for training and all that stuff.

[Matt Reynolds]

Sure.

[Chris Reynolds]

But it's just not happening.

[Matt Reynolds]

Yeah. And so the final cap I'll put on that is it is imperative that you stay unbelievably calm in the midst, no matter how they respond. Like, I mean, and I've had all of it right from the crying in my office to you know, F you go F yourself, blah blah blah. To I had a guy go, I get it. And I was like, I had somebody.

[Chris Reynolds]

Do that to that's great, that's funny.

[Matt Reynolds]

I was like, he expected it, right? And so you just gotta be prepared for all those things. And no matter what happens, you've gotta be super, super calm throughout it all. Sometimes even the calmness pisses em off because they're upset and you're not and it doesn't matter. Like you're just cool as a cucumber. You're stone cold, you're ice. And so you get em out. Okay, so now you go to the. How do we offboard them? We actually have a full stop on offboarding because they have clients. We've got to get their clients transferred over. One of the things we're doing as we were, removing their access. Like if a coach gets fired, we've got to transfer all their clients over to a new coach. And it is a shock to the clients and it's. And we, we know, I won't say it out loud, but we know the percentage that typically leave and we make sure they know. You can't go work for this. You can't go. This coach cannot coach you for six months. And so you know, those clauses are written into their contract and it's going to be in their severance package or you know, whatever. Right away you've got to get all that stuff transferred over. And so you outline them for them very quickly. The best way to do this then is there is already an email in your inbox that will explain the exit path for you. And in that email inbox, which they will look at when they get in the parking lot of the car if they work in the same office or they'll immediately pull it up after the zoom call, it will outline the step by step details of all the things and that should actually make them feel better. The goal there in that thing is, okay, you experience shock and hurt and pain and anger, but ultimately you're nervous and you're scared. You don't want to tell your family, okay, here's the deal. We are offering you three months of pay and continued insurance coverage that we'll cover through the end of this month. And then COBRA will pick up next month. You lay out all of these things that they can have as part of their severance agreement. And so you don't just give them that, they have to give something in return. And it's called a release letter. And by the way, do not do this on your own. This is one where you should hire an attorney. By the way, a release letter or severance package sort of is extremely cheap from even expensive attorneys because they just have these forms, these form letters that they've done a thousand times, and they are locked tight and solid. So they ask you, like, how long ahead of time are you going to pay them? And you know, what's. And they just fill in the blanks and they send it off and we're good to go. And so. But they essentially have to sign a document that gives legal protection to the company, that protects the company from lawsuits like wrongful determination or discrimination or harassment or wage disputes or anything like that. It gives them clarity and closure. It may go into a little more detail about the whys. And again, I. I want my attorney to write that, not me. I've talked to my attorney about that. And the attorney put it in the attorney lingo to make sure it's all locked tight. And then if they choose to sign it, then they get paid for the next three months or two months or six months or depends on how long you've worked there and how high of a position you have. And that's awfully hard to turn down. But what it's doing is it's avoiding future horrendous drama and headaches. You're not going to go on social media and talk on the company. Like all that kind of stuff is in there. It does. Obviously not worded exactly that way, but you sign an NDA, you're going to. You're going to. Which. All our. All our people that work for us have to sign NDAs anyway. But they're going to sign a second NDA that says, we're not going to talk about the firing. We're not going into the details, and that gets me three months of salary. Well, most people, because they're living paycheck to paycheck, they're just gonna sign it and they need the three months of salary, and you're not asking them to do something. By the way, this is to be clear, if you're pulling shady at your business, you shouldn't be doing this. Right. Because this is what Diddy's in trouble for. He made everybody sign an NDA that came to a house.

[Chris Reynolds]

I think Diddy's in trouble for more than that.

[Matt Reynolds]

Well, but the problem was he made everybody sign an NDA that came to the house parties, and all of a sudden they were like, oh, well, there was terrible illegal things going on. Just so you know, NDAs are gonna get dropped if there's under underage shit going on.

[Chris Reynolds]

Like any legal stuff breaks an NDA super fast.

[Matt Reynolds]

You gotta make sure that you're, you're dotting your eyes and crossing your T's and you're, you know, living correctly to be able to do that. But it protects the company while also really financially protecting the fired employee.

[Chris Reynolds]

Yeah.

[Matt Reynolds]

And so it should be. That release letter and severance package should feel like a win win to both. Yes, it sucks to pay a salary for another few months to somebody who doesn't work there anymore, but often that person is a cancer in the company and that cancer is growing and they're infecting other people. And so by getting them out, your company is immediately like, they breathe. Often 90% of your company or more will breathe a sigh of relief that finally they're gone. They let them go. Which is also a sign that you didn't do it quick enough. And so it's a win win for both. And so I'm a big proponent of being relatively generous in those situations to make sure that the employee is taken care of based on how many years they've given you and whatnot. And also that the company is protected.

[Chris Reynolds]

Definitely some lessons to be learned here as well at the original employment agreement side as well. So just keep that in mind. There's some stuff you can do to give yourself some reasonable coverage at the employment agreement level, inclusive of the NDA, inclusive of some of the things related to if this, you know, ends for various reasons or whatever than this. You just kind of want to. You just kind of want to make sure that in this process that you don't find yourself on social media where they recorded the conversation over Slack. That's right. And I don't know, it's just there's stuff like that that you want to make sure that you're using sort of a carrot and stick approach in a lot of these things. And the carrot and stick idea is just like, you know, you're giving them a good thing to do the thing you want them to do, and a bad thing if they don't.

[Matt Reynolds]

Right.

[Chris Reynolds]

It's just kind of both things, the carrot and the stick.

[Matt Reynolds]

I think for people who maybe have never either been fired or never had to fire somebody, the concept of this severance package in exchange for a release letter maybe feels like kind of gross to them. But you have to understand that's exactly the contractual obligations that your current employees are working under. Yeah, they have made a commitment to the company to work at performance at this standard that you've set based on their responsibilities and expectations sheet, and you have promised to pay them X amount and give them these benefits. It's exactly the same exchange. You're making the same exchange. All you're doing now is making a similar exchange. Post employment with a person that says in order for you to get this much, this many months of pay, you agree to do this and it's their choice, they don't have to sign it. They can go screw you. And you go, cool. There's no severance package. And you go like, well, it's probably going to be gross on social media for a few days. And we've had several of those too. And you know what? People make stink about it for 24 hours and nobody cares till the next news cycle hits. I mean, again, if you didn't do anything wrong and they're just like, oh, you know, I've had that. I mean, I've had tons of people throw me under the bus on, you know, online. I've had ex employees do that. I've had mentors sue me. You know, I'm just not, I'm not gonna say anything bad about. I'm never going to retaliate no matter what somebody says about me online. I say that. I mean, I guess if you, like, really let my wife and kids have it or something, I'd probably sue you and just sue you or something. But, you know, when I got sued, to this day, I've never said anything publicly negative about the person that sued me. No matter what the employee did to get fired, even the ones that got fired for some of the most heinous acts, I still want them to leave with some level of dignity from my company. Even if they are embarrassed and ashamed about what they did, I want them to feel like I treated them like an adult. I didn't treat them like a child, I didn't treat them like a criminal. And I let them go with dignity. All of those things are the things that have to do with the employee itself. I do want to go into and kind of end the episode with, now, how do you break it to your staff? So anything else about the employee first and then I'll let you lead with how you break it to staff and what's kind of the common messaging that goes out?

[Chris Reynolds]

Yeah, no, I think all that is correct. I've said this a couple times. I said it on the last podcast. I'll say it again on this one. The key to getting this right is Getting your head right in the delivery of the process. The way you get your head right is to really think through what you think about firing, what you think about someone needing to be fired and move on to a different role of whatever it is that they're going to do in their life. If you can come to a couple of conclusions, like legitimately believe in your guts or you're not trying to convince yourself, it's so much easier. Those are basically two things that they very likely are super frustrated to not be able to do the job that they needed to do. So every day of their life in the organization is a frustrating one. And that's not a great life for them either. Right. If they care. If they don't care, then you probably care a lot less also about getting. Doing the firing. The second piece of it is, and this is the one that I think is maybe the most important, and it is the people on your team that are really good. You are in danger of losing them the more people that you keep around that are not very good.

[Matt Reynolds]

Oh, of course.

[Chris Reynolds]

Okay. And so very frequently, the net effect on the company is a better. Everything gets better because they want to work a players want to work with a players.

[Matt Reynolds]

Percentage of A players just went up.

[Chris Reynolds]

Yeah, that's right.

[Matt Reynolds]

Because the person that you let go was at least a B and probably was a C or D. And so that bottom chunk gets dropped off and you're just left with the top 80% or the top 90% or whatever.

[Chris Reynolds]

The thing is, and I know I said there's only two, but there's actually three. The third item on this is the slot they are taking in your organization, that position. There is some superstar out there who you are denying a job to because you've given that job instead to somebody who's horrible at it, which is your fault. Which is your fault. And. And the sooner you can rectify that, you are doing something incredibly positive for that. Whoever that other person is that you don't know who it is yet. Right. Those three things should line up in your mind as a founder to go, oh, this isn't like the movies where, like, your, you know, your dad gets fired because. And so like, you hate. You hate the business because they fired your dad or whatever it is. And maybe your dad did get fired. Maybe they were a horrible company and all those things. But the reality is when you fire somebody and you fire them, well, it is a net positive for everyone involved.

[Matt Reynolds]

That's right.

[Chris Reynolds]

And it's a net positive for someone who isn't Even involved yet.

[Matt Reynolds]

Right.

[Chris Reynolds]

But if there is a perfect fit human out there for that position, they're out there somewhere and you don't have a slot for them because currently somebody awful at it is doing the job. So those are the things to have in your mind to get your head right before you execute on this. All right, now what I just said is really a good message for those employees. Right. What you really are trying to drive here is you want to make sure that everyone knows because there is a practical implication here. No matter what role they were filling, even if they weren't filling it. Well, there is. There are probably some dependencies in the organization around them. And so you need to send out a, an email or whatever. It's usually an email. Maybe it's a slack message. Depends on your organization. That is all facts. Okay? And the facts are like real thin in this case. They need to be, this person no longer works here.

[Matt Reynolds]

That's right. Not, we fired them.

[Chris Reynolds]

They no longer work here.

[Matt Reynolds]

It's nobody's business. They're going to find out anyway because they've got friends. And that of course, like they got fired. So you don't have to say we fired them. So and so. No, like, we're sorry to say, so and so no longer works here now.

[Chris Reynolds]

Yes.

[Matt Reynolds]

What does that mean for the company? Go ahead.

[Chris Reynolds]

Yeah, we will be working to fill this role in the next X, whatever that is. You sort of describe what's going to happen during the, you know, starting right now, this person is serving that role. And obviously you need to have already had a conversation with that person for the person who's filling that role.

[Matt Reynolds]

Same thing like this coach and this coach and this coach have taken their clients or, you know, this person, if it's an employee, a management employee or administrative employee, this person is filling that role right now in the same way you would, you know, when, like I've got a. When I have a client going on maternity or paternity leave. Like they go on leave and say, okay, well, this person's on leave. So this person is stepping in to fill in that role. So everyone knows still what the chain of command there is. And that person isn't. They're just leaving because they're having a baby. That's okay, that's fine. But they need to know who to go to. Well, I used to go to John Smith. John Smith doesn't work here anymore. Who do I go to? Well, you go to this person and they know. Right. So again, facts and facts only.

[Chris Reynolds]

That's right.

[Matt Reynolds]

The point that doesn't have to be, and it is factual, but there's still some subjective and maybe some emotive pieces. I still think there's that. Just like you said, I think there is then a time to lead and lead well, which is to make the point that you just made, which is we think every time something like this happens, it can be a wonderful thing for our company, a wonderful thing for the person that left. And there is a wonderful human being that's going to fill their role and it's going to be win, win, win for all three. And that is our goal as a company, because it's best for our company. It's best for all of us that work together. And so you can cast a little vision there without going overboard because again, to some of your, you know, a lot of your employees maybe didn't know that person or maybe didn't like that person, but there will be a few that very much did. They have. They have friends and they're not going to be happy for a while either because you just fired their best friend. But this is also why it's important to make sure that when I say you help them keep their dignity, both to their face, but you also just never talk bad about them behind their back. You don't talk bad about them to your staff because it will get back to them that you do and you just shouldn't. It's just, first off, I think it's morally wrong and so you allow them to keep their dignity. If somebody stole money from the business and we fired them, I wouldn't post on Slack. So and so stole money from the business and so we fired them. So and so he's no longer employed here and we're looking forward to filling that position. Here's who's taking the role right now. Like, that's the thing, right? So I would hope that if I were in the same position and I did something to get myself fired, hopefully it wouldn't be illegal and I wouldn't be potentially going to jail for it, then that business that I worked for would treat me the same way, with dignity. They wouldn't throw me under the bus, no matter how hideous it is, unless it is a. Is a. And I've never had this. I don't think you have either. But, you know, certainly occasionally, if you have an employee that has a massive public disgrace, right, like they've been on, you know, social media, the TikTok, running a SUV through a crowd of protesters, okay, now we got to address that, right? Because everybody saw what they did.

[Chris Reynolds]

Yeah. Different. Different situation, too. Like, there are certainly all the. All the advice that we're giving here is for just like what I would consider a pretty normal kind of firing. Firing. There are outside circumstances that would. And when those happen, when outside circumstances happen that are particularly difficult, things like. Things like messing around with each. With people at the office. Things that get into. Get you into a legal quandary, so to speak.

[Matt Reynolds]

I know where you're going.

[Chris Reynolds]

I think in that situation, you need to immediately engage a human resources law attorney.

[Matt Reynolds]

That's right. You need a really good attorney and you need to let them speak on your behalf. It can still sound like it comes from you. Written on Slack or something. Or even record a video where you're reading off teleprompter.

[Chris Reynolds]

Yep.

[Matt Reynolds]

But they wrote it.

[Chris Reynolds]

They wrote it. Yep.

[Matt Reynolds]

Because you got to cover your butt in that sort of situation.

[Chris Reynolds]

Like firing people is normal. Layoffs are normal. And by the way, those. Those are different. You fire somebody because from a performance, you give them a performance improvement plan. Layoffs are. I'm walking in and I gotta let 20 people go. Maybe because we are out of cash.

[Matt Reynolds]

Because the business didn't perform.

[Chris Reynolds]

Yes. And that is a completely different conversation. It doesn't even work the same way. That's a lot more like. I'm sorry is probably a really right thing to say in that context. Right. Because they didn't do anything. I've been in that situation too, and that is freaking tough. But when you have to do it, it's a very different thing. So this is specifically for firing. This is specifically in the situation where someone is not going to. Not only did they not meet expectations, they're not. They're not going to meet expectations in the future. And we need to get them out of the business and do the things we need to do.

[Matt Reynolds]

Yep. Excellent. I think that's it for me. Anything else from you?

[Chris Reynolds]

Nope, I think that's it. We'll get a little feedback on this and see if there are other, like, really practical advice bits that people could use. But I will say I started with this. I'll end with this. Again, I know that there are people listening to this podcast right now who, while we're talking, the whole time we've been talking, they've got a person in their head. They know that person needs to go. And I've just been.

[Matt Reynolds]

Keep putting it off.

[Chris Reynolds]

I keep putting it off. Do not put it off. Let the. The things we talked about that drive value not just for the organization, but for you, your staff, and the future human that is a superstar that needs that slot. Let those drive your behavior right. It is never gonna get better. There are. There's a time to fire people, fire them and get it over with, because you need to develop that skill as a good founder, you need to develop the skill to do this, and eventually you need to get to the spot where you're not even afraid to do it. You don't like to do it, and you may still be very uncomfortable about it, but you aren't afraid to do it. You don't lose sleep the night before because of it. It's like, I can do this. I know how to do this, and I can execute on it.

[Matt Reynolds]

Yeah. And so I think what you just described is the refining process. I'm often given some sort of props or the refining process of voluntary hardship with strength training, what strength training does. But this is absolutely a voluntary hardship thing. I think having awkward conversations, which include needed awkward conversations when they're necessary, and certainly firing somebody falls into that. There's a refining process, hopefully not just for the employee that was fired, but for you. Like, you get better at it. The next time you have to fire somebody or have an awkward conversation, a necessary awkward conversation, it's a little less awkward. It never turns you into. At least I found it doesn't turn you into a sociopath. Like, you still very much. You don't enjoy it and you love people and you want people to succeed. And so now this is the. And this is a half joke, if you're listening, and you're attorney, but attorneys are sociopaths because they love it. My attorney's like, hey, if you ever need me to fire somebody, you call me. I love that. Like, you're a sociopath. But also that's the person I want in the courtroom representing me when it comes time representing. They love getting in fights. I do not. But having that conversation, having that hard conversation, maybe that's not the hard conversation in firing an employee. Maybe it's a hard conversation with one of your kids or with a spouse or with anybody in your life. People put that off their whole life and never have a hard conversation their whole life. And they just avoid forever. They never grow. And so the hard conversations, much growth occurs for often much more. Many more than one person. Every time you have to have one of those conversations, multiple people grow.

[Chris Reynolds]

I couldn't say it better. That's exactly right. Do that.

[Matt Reynolds]

There you go. There's another episode of build your business podcast. Thank you so much for listening. Hope you guys have a great weekend this weekend, and we'll see you guys next Friday.