#31 How to Manage an Employee Out: A Leader’s Guide to Compassionate and Professional Transition

Last week, during a coaching session with one of my coachees, we covered a topic that most leaders dread — managing an employee out. My coachee, a relatively new leader of 2-3 years, was grappling with the decision to let go of an underperforming team member. This would have been her first time managing someone out, and it was dreadful and mind-boggling.

Let me share the insights we discussed, along with some personal reflections, on how to approach this delicate process with the respect, transparency, and professionalism it demands.

1. Assess the Situation Clearly

Before making any decisions, it's critical to assess the situation thoroughly. Ask yourself: Have you exhausted all other options? Is the employee underperforming due to a lack of skills, motivation, or perhaps unclear expectations? Or is it a deeper issue like a poor cultural fit?

Understanding the root cause is essential. If the issue is related to skills or knowledge, consider whether training, mentorship, or a role adjustment could help. However, if you've tried multiple interventions and nothing has worked, it might be time to consider moving towards a more definitive action.

2. Document, Document, Document

This is where "paper trailing" becomes your best ally. In my own leadership journey, I’ve learned that documenting every step is not just about protecting the company—it also encourages being transparent and fair to the employee. Record performance issues, feedback sessions, and any interventions you’ve tried. This creates a clear timeline of events that both you and the employee can refer to.

Why is this so important? It ensures that when the time comes to make a final decision, you have a comprehensive and unbiased record of the process. It’s also crucial for any potential HR or legal implications, particularly if the employee decides to dispute the decision.

3. Have the Tough Conversations Early

Avoiding difficult conversations can lead to even more significant problems down the line. Be upfront with your employee about your concerns and give them a fair chance to improve. At this point, it's essential that you've exhausted all other options and that the employee understands the seriousness of the situation.

Set clear, measurable goals with a specific timeframe for improvement. Your role here is to coach and guide, not just critique. Provide the necessary support, but also make it clear that continued underperformance will lead to further action.

4. Provide a Fair Opportunity to Improve

A Performance Improvement Plan (PIP) can be an effective tool if used correctly. But remember, this should not be a mere formality before termination. The PIP should be a genuine opportunity for the employee to turn things around. Set specific, achievable goals, and offer the necessary resources for them to meet these objectives.

Regular check-ins during the PIP period are crucial. They show your commitment to the employee's success but also reinforce the seriousness of the situation.

5. Respect and Empathy Above All

When it becomes clear that the employee cannot meet the expectations despite your best efforts, it's time to have that final conversation. Approach this with empathy and respect. I recall a time early in my career when I had to manage someone out of my team. It wasn’t easy, and it certainly wasn’t pleasant. The employee wasn’t a good fit for the digital marketing role, and despite multiple attempts to help them improve, it just didn’t work out.

Years later, that same person contacted me to give me his support for my coaching practice. We hadn't spoken in a long time. I honestly thought that they would never get in touch - I wasn't their favorite person in the world and I wasn't offended by that! They had found a career in interior design—something they were passionate about and excelled in. They told me that while the process was tough, they appreciated the empathy and respect I showed throughout. This experience reaffirmed for me that how you manage someone out can have a lasting impact on their future.

If the employee is strong in certain areas but just not a fit for your team or role, consider writing them a reference or coaching them to find a path they are more inclined to enjoy and thrive in. Helping them transition to a role where they can thrive is a win-win for everyone involved.

6. Know When It’s More Serious: Handling Toxicity or HR-Related Issues

If the situation involves toxicity or serious HR-related issues, the process takes on a different level of seriousness. These situations require a more formal approach, often involving HR from the outset. Documenting behavior, communicating clearly, and following company protocols to the letter are critical.

In such cases, the goal is not just to protect the team and the company but also to ensure that the situation is handled legally and ethically. This might involve a faster and more definitive course of action, always keeping in mind the need for fairness and respect.

7. Learn from the Process

After the dust has settled, reflect on the entire process. What could you have done differently to support the employee earlier? Were there red flags during the hiring process that you missed? Use this experience to refine your leadership approach and improve the way you manage your team.

Concluding Remarks

Managing an employee out is never easy, but when approached with clarity, respect, and professionalism, it can be done in a way that is fair to both the individual and the organization. My coachee, after careful reflection, decided to dedicate time to coaching her employee toward finding a more suitable career path. Throughout the process, she committed to ensure the steps were transparent and respectful, allowing the employee to leave with dignity and say goodbye to their teammates. This thoughtful approach not only will help the employee transition smoothly but also maintain a positive atmosphere within the team.

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Hi! I'm Merve. ?? I help corporate leaders and business owners build high trust, high performance teams, grow their business impact, and advance their careers.

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