How to Fire an Underperforming Employee: Handling the Hardest Conversation

In May 1781, in Vienna, the 25-year-old Wolfgang Amadeus Mozart stood before his employer, Hieronymus Colloredo, Prince-Archbishop of Salzburg. According to the letter Mozart wrote to his father on 12 May, the archbishop heaped insults on him and told him: "If he will not serve me properly, let him clear off."

Mozart took this as his release. The next day he handed his letter of resignation to Count Arco, the court's chief steward, so that it could be passed on to the archbishop. Arco would not accept it. Over the following weeks Mozart wrote three petitions and submitted them five times; each time they came back.

In a letter dated 9 June 1781, Mozart described how it ended. The archbishop was due to leave Vienna the next day, so Mozart went to deliver the petition himself. Having strung him along for four weeks, Arco threw him out of the antechamber door with a kick. The letters are still read today. For more than two hundred and forty years, the way that parting was handled has been remembered by that kick.

The ending is the part of a working relationship people remember longest

Letting someone go is the least loved part of managing. You are cutting off someone's salary and turning their life in a direction they did not choose. Yet nobody is perfect at hiring. Keeping the wrong person harms both the company and the team.

Liz Wessel, who spent more than seven years as a CEO and is now an investor, describes her first attempt in a piece for First Round Review. It started so clumsily that a few minutes into the conversation the employee asked whether they were being promoted. Her advice is aimed at startups of up to roughly 75 people. It is not about dismissal for legal cause or about layoffs, but about parting ways with someone whose performance is not good enough.

Nobody should be fired by surprise

In Wessel's view, if someone dismissed for performance is surprised by it, you have failed as their manager. Surprise carries three costs. The team starts to fear it could happen to them without warning. Someone who could have improved, had they known, never gets the chance. And even if you are in the right, you open the door to a legal dispute.

• Write it down: Keep your observations plain, specific and free of sarcasm. Wessel's test: write every note as if the employee's lawyer will one day read it aloud.
• Talk regularly: Meet one to one once or twice a week and explain what "good" looks like, with examples and targets.
• Send a recap: After each meeting, send a summary by email or message.
• Allow reasonable time: Some founders say two to four weeks. Make sure both your expectations and your timeline are realistic.

Two questions before you decide

Wessel points out that a dismissal is often the manager's mistake too; you were the one who hired this person. Before deciding, be sure of two things: that the problem does not come from poor management or from the person not being set up to succeed, and that what good performance looks like has been made clear.

If both are true, a saying often repeated in the startup world applies: "When in doubt, there is no doubt." Wessel has one more test. Imagine this person told you they were quitting because they had won the lottery. If you feel relieved, it is time to act.

Keep the conversation short, clear and respectful

Before the conversation, prepare the separation documents and severance with a lawyer; the rules vary from country to country and even from state to state. Wessel observes that at early-stage startups severance tends to run between two and six weeks of salary, depending on tenure.

Hold the meeting not in a glass-walled meeting room but in a private room near the exit, or at a nearby café. Unless you have concerns, Wessel recommends a one-to-one between the manager and the employee; facing two people can feel like being ganged up on.

The first sentence should state the decision: "Unfortunately, today is your last day at this company." Wessel's mistake the first time was to open with compliments. After that, do not launch into a long explanation. Referring back to the earlier performance conversations is enough. Shut off access the same day, but make sure the person can still reach their pay slips, health cover and equity paperwork.

Wessel writes that most startups under 75 people avoid formal performance improvement plans. Most such plans end with the person leaving anyway. Continuous feedback catches the problem before a plan is needed.

How do you tell the team?

Do not run down the person who has left. A team that watches a manager badmouth someone who has gone starts to fear it will be next. Those whose work is directly affected should hear straight away; everyone else can hear through a short note at the weekly meeting. Nobody should find out from an unanswered message or a bounced email.

"Letting go" and the power of the last moment

In Turkish, "yol vermek", literally to give way, means both to let a vehicle pass and, according to the Turkish Language Association, to dismiss someone from a job. German entlassen works the same way: it comes from lassen, to let, and means both to release a prisoner and to dismiss an employee. That was exactly what Mozart wanted, his Entlassung, to be let go.

The English "give the sack" has been recorded since 1825. According to Wiktionary it probably comes from the worker who left with his tools in a sack; a similar idiom exists in 17th-century French.

Psychology explains why the last moment weighs so heavily. In an experiment by Daniel Kahneman and colleagues, published in Psychological Science in 1993, participants held one hand in water at 14°C for 60 seconds. In another trial, the same 60 seconds were followed by 30 more seconds as the water warmed slightly. Asked which trial they would repeat, most chose the longer one. Memory weighs an experience by its most intense moment and its end; this is called the peak-end rule. An employee may describe your company for years mostly through that final conversation.

The nobility of the heart

A few days later, on 20 June 1781, Mozart wrote to his father about Arco:

"Das Herz adelt den Menschen, und wenn ich schon kein Graf bin, so habe ich vielleicht mehr Ehre im Leib als mancher Graf."

It is the heart that ennobles a man; and though I am no count, I may have more honour in me than many a count.

The man who held the title of count went down in history with a kick. When someone you let go describes that last day years from now, which of your sentences will they remember?

If you would like to raise performance problems long before it comes to dismissal, How to Give Your Team Feedback is worth a read.