4 Keys to Effectively Hiring and Firing Employees in Your Small Business

Published by Matt Brady | December 15, 2016

Small business owners face many challenges in building a sustainable company, not the least of which is finding, hiring, managing and growing their team. The fight for talent is difficult on many levels, beginning with the battle of recruitment. Just finding (and affording) your ‘best-fit’ candidates can be an exhausting and draining process. However, it’s just as important to follow strong standards on the other end of the process — when an employee needs to be let go.

That’s why clarity in hiring is so critical in both avoiding unnecessary firings (when a person doesn’t work out), and in preparing successfully for the process (when it is unavoidable). Here are four steps you can take to tighten up your human resource processes and improve your effectiveness in both hiring, and firing:

1. Create meaningful and precise position descriptions.

It all begins with what you want in the position, and what you need in the person. A weak job description is dangerous on many levels, beginning with the fact that an unfocused position description will most likely only attract unfocused candidates. In addition, a poor job description is a strong indicator that you aren’t clear on what you need, or how you intend to manage the person you hire.

Take the time to write a detailed and precise position description — one that not only lists duties but also describes key expectations and necessary requirements. If the person will need to lift boxes, furniture or merchandise, say so up front (and note the typical weight of these items and the average frequency of the activity).

If a college-level command of written and verbal English is required, state that as well. Remember that if you don’t say it now, you will be on shaky ground if you later terminate a person for not meeting your unstated expectations or needs.

Don’t fall into the excuse that you just want to “hire great people and let them run”. Great people for your business are made, not born – and ‘making’ great employees begins with effective position descriptions.

2. Use formal evaluation processes, procedures and standards.

Okay, so you’ve written up a really precise, well-structured position description and you’re going to place it front-and-center in your recruiting process so that you attract the ‘best-fit’ candidates right from the start. Doing this also has the added advantage of giving you a clear basis for ignoring applicants who reply, but who do not meet the qualifications.

Now that you’re ready to begin evaluating candidates who do fit the qualifications, however, it’s time to pause again and put additional effort into preparation. Don’t start this stage without a clear evaluation process based in written standards. There are three serious errors every small business owner tends to make when it comes to the hiring process:

  • Talking more than listening
  • Accidentally asking or discussing irrelevant, inappropriate or illegal questions
  • Letting unconscious biases play into the hiring decision

This is often exacerbated by the tendency of many candidates to voluntarily discuss things that you are legally prohibited from asking about, precisely because they want to build rapport. One moment you’re talking about a neutral topic like the fact that you both went to rival high schools, and the next moment the candidate is telling you about how friends at their church helped them through their chronic illness after a difficult divorce (all three of which are illegal for you to ask about).

This is just one reason why you must have a formal evaluation process — not only to ensure legal compliance, but also to avoid allowing irrelevant or illegal factors accidentally play into your hiring decision. You may have felt more of a ‘bond’ with a candidate precisely because they revealed information to you that they should not have, while you could have totally missed professionally relevant information from another candidate who is more highly qualified, if only you’d learned that during the interview.

3. Don’t avoid the hard work of progressive discipline.

If there’s one thing small business owners hate as much as taxes, it’s probably the demands of managing progressive discipline in the workplace. Progressive discipline is the process by which an employee whose conduct is unprofessional or inappropriate is notified and required to engage in corrective actions, and where each round results in more severe or significant sanctions and requirements than the last. For example, an employee who has a tendency to tell off-color jokes in the lunch room may be given a verbal warning the first time, a written warning with a required corrective action the second time, a suspension without pay the third time, and formal termination the fourth time.

There are two reasons why small business owners despise this process. First, it is time-consuming and requires rigorous adherence. If you discipline a person the first time and fail to follow through with discipline on subsequent occasions, it can lead to disaster.

And second, entrepreneurial business owners “just want everyone to get to work”, and often hope far too much that if they just remind everyone to “work together and get the job done”, that everything will work itself out.

Nothing in business works itself out, and in the case of poor performance or disciplinary issues, this is especially the case. In fact, an employee who sees a weak or failing discipline system before them may actually use the system as a weapon against the employer — leading to legal and financial outcomes you clearly want to avoid.

4. Tie the whole process together through the same standards.

Just because you may operate your business in an ‘at-will’ employment state does not mean you can just fire any employee at any time, and expose yourself to zero risk. Current and former employees can always file a lawsuit if they feel that you have wronged them, and if they and their attorney believe that their claim has a chance of success.

The best way to protect yourself against litigation or other risks associated with workforce turmoil, is to tie everything together by using the same standards across the board. This means consistent standards that all employees must follow (documented in your employee handbook), and consistent standards for each position (documented in the position descriptions and in your employee evaluations).

For example: If your employee handbook emphasizes the essential role of professionalism in all communication…and an employee’s position description specifically states that the employee in this role is expected to write and speak with professional conduct and formality at all times…and the employee’s performance evaluation references an examination of the employee’s level of compliance or excellence in performing this aspect of her or his duties…then you have a clear basis for managing the employee against this standard.

On the other hand, if you don’t follow consistent practices yourself; if your handbook doesn’t reference such standards; if job descriptions are unclear or inaccurate; and you have no clear processes or components baked into your employee evaluations…then you’re in real trouble.

Hiring and firing are two ends to the same spectrum — the spectrum of effective talent acquisition and management. Every small business owner must take the time to become educated and competent at developing processes and standards that can guide and support the entire employee lifecycle. And this is true whether you are hiring fifty people, five people or even just one.

Editor’s Note: The information contained in this article presents well established ‘best practices’ and discusses the topic in a general nature. Consult with a qualified human resource advisor or your business attorney for information and advice specific to your business, industry and operational requirements.

Selected Sources:

Image Credit: jmettraux (Flickr @ Creative Commons)