MBA2631 How to Fire Good People Who Are Bad Employees - The $100 MBA Show

Summary4 min read

Summary of Episode MBA2631: "How to Fire Good People Who Are Bad Employees"

The $100 MBA Show hosted by Omar Zenhom delves into the challenging yet essential aspect of business management: terminating employees who, despite their good nature, do not perform effectively in their roles. Released on May 30, 2025, this episode provides practical strategies and insights drawn from Omar's extensive 20+ years of entrepreneurial experience.

1. Understanding the Dilemma

Omar begins by addressing a common predicament faced by business owners: the difficulty of firing someone who is kind, loyal, and well-liked but consistently underperforms. He states:

Omar Zenhom [02:15]: "Firing someone who's kind, loyal, well-liked and just not getting the job done? That's one of the hardest things you'll ever have to do as a business owner."

He emphasizes that maintaining such employees not only hampers business growth but also negatively impacts the overall team dynamics.

2. The Cost of Retaining Poor Fit Employees

Omar highlights the detrimental effects of keeping underperforming employees:

Omar Zenhom [10:45]: "The real cost of keeping somebody that's not a good fit in your business? It doesn't just hurt your business, it hurts your A players because they lose motivation."

He explains that A players, or top performers, may feel demotivated and constrained when working alongside underperforming colleagues, leading to a decline in overall morale and productivity.

3. Ownership and Responsibility in Hiring

A critical point Omar makes is the responsibility that falls on business owners regarding hiring decisions:

Omar Zenhom [05:30]: "If somebody's not working out, you need to take ownership. This is not their fault. This is actually your fault."

He underscores that as the business owner, the onus is on you to ensure that each hire aligns with the company’s needs and standards. Mistakes in hiring are a reflection of the hiring process, not the individual’s character.

4. Prioritizing Stakeholders and Business Success

Omar stresses the importance of prioritizing the business and its stakeholders over individual employee relationships:

Omar Zenhom [07:50]: "You have a responsibility as the business owner to serve the stakeholders, which are your customers."

He asserts that the ultimate goal is to serve customers effectively, which necessitates a competent and cohesive team.

5. Impact on Team Morale and Standards

Maintaining underperforming employees can lead to a slippery slope of declining standards:

Omar Zenhom [12:00]: "Morale takes a hit when somebody is not doing their job or doing their job good enough. The team silently starts lowering their standards."

This environment can breed complacency, where the entire team operates at a reduced capacity, ultimately affecting the business’s competitive edge.

6. Steps to Effectively Fire Underperforming Employees

Omar outlines a three-step process to handle the termination of bad-fit employees respectfully and effectively:

a. Document Challenges and Provide Feedback

Omar Zenhom [15:20]: "Document any challenges early. Communicate expectations, give feedback, and allow them a clear path to improve."

This initial step ensures that the employee is aware of their performance issues and has had the opportunity to rectify them.

b. Professionalize the Process

Omar Zenhom [18:35]: "Don't personalize it. You're addressing a performance misalignment, not attacking the individual."

Maintaining professionalism helps in keeping the conversation objective and focused on business needs rather than personal attributes.

c. Be Clear and Direct

Omar Zenhom [21:10]: "Be clear. No fluff, no long speeches, no guilt tripping. Letting them go with dignity and clarity is the best exit you can offer."

Clarity ensures that there is no ambiguity about the termination, which helps in preventing misunderstandings and maintains respect between both parties.

7. Personal Anecdotes and Encouragement

Omar shares personal experiences to highlight the importance and impact of making tough decisions:

Omar Zenhom [25:00]: "I've had to let go of someone who was one of the kindest, most loyal people I ever hired. But they were missing deadlines, projects were stalled, others were stepping in to cover them."

He acknowledges the emotional difficulty but reinforces that such decisions are necessary for the greater good of the business and the remaining team.

8. Conclusion: Upholding Standards for Business Success

In his concluding remarks, Omar reiterates the necessity of maintaining high standards within the team to ensure business excellence:

Omar Zenhom [28:45]: "You're not being cold, you're being clear. Your job is to protect the mission, the team, and the people who are showing up and doing the work."

He encourages business owners to prioritize the company’s mission and team well-being over individual discomfort, assuring them that such actions will ultimately lead to a stronger, more motivated workforce.

Key Takeaways

Ownership in Hiring: Recognize that hiring mistakes are a reflection of your hiring process and take responsibility for rectifying them.
Impact on Team: Underperforming employees can demotivate top performers and lower overall team standards.
Professional Termination Process: Document issues, provide clear feedback, and maintain professionalism during termination to uphold dignity and clarity.
Long-term Benefits: While difficult, firing bad-fit employees protects the business’s integrity and fosters a productive, motivated team environment.

Omar's insights provide a compassionate yet pragmatic approach to handling one of the more challenging aspects of business management, ensuring that leaders can make informed decisions that benefit both their teams and their businesses.

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[00:00]
Omar Zenhom
If you're a listener of the show, you probably own a business or looking to start one. So the question is, are you ready to thrive with your business? It's time to let Intuit QuickBooks take things like unpaid invoices and tracking expenses off your plate to take things to the next level. If you're a longtime listener to the show, you know how much I bang on about how important your finances are. Getting your numbers in order, making sure your incoming invoices and expenses are all taken care of. That's where QuickBooks comes in. It's an all in one business platform that can help you with day to day tasks like invoice, invoicing and expenses. Manage and grow your business all in one place. Intuit QuickBooks your way to money get 90% off for 3 months limited time only Terms and conditions apply. Money Movement services are provided by Intuit Payments, Inc. Licensed as a money transmitter by the New York State Department of Financial Services. It's smart to always have a few financial goals and a really smart one. You can set earning cash back on what you buy every day. And with Discover you can get this Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms@discover.com credit card firing someone who's lazy or toxic, that's easy. But firing someone who's kind, loyal, well liked and just not getting the job done? That's one of the hardest things you'll ever have to do as a business owner. I've done it and I'm here to tell you it's necessary. Let's talk about how to fire good people who are bad employees the right way. Welcome Back to the $100 MBA Show. I'm your host Omar Zenholm where I deliver practical business lessons three times a week, Monday, Wednesday and Friday to help you start, grow and scale your. Here's the truth. Most people you hire will be good human beings. It's just what I found in my over 15 years of entrepreneurship. But good doesn't always mean effective. You can be a great person and still be a poor fit for the role they're hired for. And keeping someone in a position that they're underperforming in, that doesn't make you nice. It makes you the bottleneck. I'm gonna get into the cost of keeping someone who's not a good fit. But there's two things I need to highlight. First. Number one, if Somebody's not working out. You need to take. At the end of the day, you're in charge of the business. You or somebody on your team who you hired made this hire, right? They didn't just show up in your business. All of a sudden you made the choice and thought that they were good enough for this job. It's becoming apparent you're mistaken, right? So you need to own it. This is not their fault. This is actually your fault. So you got to fix it. The second thing I want to share with you is that you have a responsibility as the business owner to serve the stakeholders, which are your customers. It's not your job to give out jobs. Your job is to serve the customer. And the customer needs to be served through several ways. Through good service, through creating a great product, through running a good team so the team can deliver for the customer. So even if they're not directly interacting with the customer, let's say they're a manager or they're an hr. Their job is to make sure the business succeeds so that the customers get what they need. Your job is to uphold that. Your job is to serve your customers. You are responsible for that as the owner of the company. So that comes first before you are trying to help people, train people, all that kind of stuff. Because a lot of us, we think that we can save people that are not a good fit. And hopefully you can. But in my experience, more likely than not, you made the mistake of hiring somebody that is not a good fit. Did you know that the pet industry is a booming $150 billion industry? People absolutely love their dogs. Don't you? If you're looking for a new investment and love dogs, there's only one name you need to know. That's Dogtopia. Dogtopia is the largest, leading and fastest growing pet franchise in North America. With 300 locations. Dogtopia is the only pet services franchise that offers a reoccurring revenue membership model. Dogtopia offers safe, open play, daycare, boarding and spa services for dogs. Want a strong franchise model that is recession resistant and number one in the industry? Check out Dogtopia because every dog and dog parent deserves it. Go to dogtopia.com to learn more. That's dogtopia.com listen. In today's fast moving business world, your team needs to stay connected with your customers. Without missed messages, without missed calls, without a slow phone system. Because the reality is if you miss a call, you miss a customer. That's why I'm excited to tell you about OpenPhone. It's the number one business phone system that streamlines and scales your customer communications. How do they do it? With OpenPhone, your team can share one number and collaborate on customer calls and texts like a shared inbox. Pretty cool. Any teammate can just pick up right where the last person left off, keeping response times faster and more efficient. Plus, with their AI powered call transcripts and summaries, you'll be able to automate follow ups, ensuring you'll never miss a customer interaction again. You got to check them out and see why. Over 50,000 businesses trust OpenPhone to manage their business calls and their texts. And get this OpenPhone is offering my listeners 20% off your first six months at openphone.com MBA that's O P E N P-H-O-N-E.com MBA and if you have existing numbers with another service, OpenPhone will port them over at no extra charge. OpenPhone no missed calls, no missed customers so what's the real cost of keeping somebody that's not a good fit in your business? It doesn't just hurt your business, it hurts your A players because they lose motivation. The best people on your team will lose motivation because they're working with people that are not at their level. Morale takes a hit when somebody is not doing their job or doing their job good enough. The team silently starts lowering their standards because they start seeing that this is acceptable. Like this person's performing at this lower standard. I guess I can work at that low standard. Now remember, as a business leader, everybody's watching what you do and don't do and your business starts to drift into mediocrity. Okay? This is the most dangerous thing out of all. You should be always thriving for excellence for being the best in your industry. And once you start sacrificing your standards, especially when it comes to the talent in your business, this is when you slip into just being okay. Now, Steve Jobs is not a perfect human being, but he put it best. He said the problem with B players is they hire C players and C players drag down the whole team. And A players want to work with A players. The moment they're surrounded by anything less, they start leaving. Let that sink in. Keeping someone who isn't performing can cost you your best people. So here's what to do. With respect and clarity. You want to document any challenges, problems early. That's the first thing you want to do. Make sure you've done that. You've communicated expectations, you've given feedback. You allow them to have a clear path to improve if they can't meet the mark after that. It's time to let them go. Now, let me be honest with you. I've done this so many times and nine times out of ten, they get fired. Okay, they do not improve. But I have to do this to be fair. And because there's that one time out of 10 where they do change, they do improve, they have clarity and they actually become an A player. It's rare, but it's worth doing what you're supposed to do and give them a track to get better, to improve, to give them feedback, Give them a chance. It's worth doing so that you're respectful and you're doing the right thing for your company, but also for that 1 out of 10 times that they are going to change and they are going to become an incredible asset to your team. Number two, don't personalize it in this process. Professionalize it. You're not firing a person, you're addressing a performance misalignment. I know that sounds like corporate speak, but I'm serious here. You need to address this from a professional point of view. You could say something like this. This isn't about you as a person. You're actually enjoyable to work with. It's about the role and it's about what the business needs right now. Unfortunately, this just isn't the right fit. This makes it honest and respectful. Number three, make it clean and clear. Don't make it vague to be sensitive and, you know, not hurt their feelings. You could be professional, but you need to be clear. Be direct. No fluff, no long speeches, no guilt tripping. Letting them go with dignity and clarity is the best exit you can offer. Make sure it's clear that the relationship is over, that they will no longer be working for you and what the next steps are. Don't be vague. Don't beat around a bush. Don't make it sound like they're not fired, but they are fired. No, there's no time for that. You need to work on the next hire. And if you've done what you're supposed to do and you're professional about it and you give them a chance to prove they know it's coming. Listen, I've been there. I've had to let go of someone who was one of the kindest, most loyal people I ever hired. But they were missing deadlines, projects were stalled, others were stepping in to cover them. Sometimes I knew people were covering them and sometimes I didn't. I found out later and I waited too long because I didn't want to hurt them. Sometimes firing someone is freeing them to find where they can thrive, where they're a better fit, where they're more valuable. Before I go, I want to leave you with this. If you're struggling with this decision, here's the truth. You're not being cold, you're being clear. Your job is to protect the mission, the team, and the people who are showing up and doing the work. And your customers, of course. Letting go of someone who isn't a fit, it's hard. But it's a decision your future self will thank you for and your team will thank you for. You know you're supposed to do this. You know that you have to do this. So do it. Thanks so much for tuning in to the $100 MBA show. If you want more support as you build and lead your dream team, you're going to want to join my three Things Newsletter Every week I send you three things, something to think about so you can build a stronger mindset. Number two Something to do so you're stacking wins week after week. And number three, Something to learn so you're skilling up every single week. It's no fluff, it's to the point, and it's my way to coach you from afar. If you want to sign up, it's absolutely free. Just go to 100- MBA-NET and you can sign up to any of our free guides or any of our freebies and you'll be added to our newsletter automatically. I hope to see you there. Until next time. Remember, business is not a challenge, it's a series of challenges that makes you stronger. So keep going. See you next time. Earn a business degree on your terms at Capella University. Our flexpath format is available in select programs and lets you learn on your schedule. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.