How to Fire a Retail Employee in 5 Steps

When Is the Right Time to Say Goodbye?

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Everyone in retail has been in this spot. You hired a person you thought was going to be a rock star. They started out great, but slowly and surely their performance started to deteriorate. Their attitude and behaviors start to affect morale and the behaviors of the other employees. And you just got anothercustomer complainton them. It's time to fire them, but what do you do?

Here are five tips to help you navigate this decision well.

1. Check Yourself 

When you get to the point of firing an employee, you must be able to look yourself in the mirror and say that you have done everything you can to save them. In other words, it's not fair to the employee to let them go if you have not fulfilled your end of the bargain. And that bargain was to train, coach and mentor them to success in your store.

In retail, especially, turnover is already so high that we tend to move quickly with these decisions. Why is checking yourself so important? For two reasons: First, because it is a sanity check for you as the boss. Sometimes we get frustrated with an employee, but it's not the employee's fault. They are doing their "best". Second, if you can say without a doubt that you and the company have done everything in your power, you are protecting yourself from possible legal action. I'll talk more about that in a bit. But let's deal with the first reason some more. 

When I talk to employees about their behavior, do you know what the number one reason is they give for not doing what they are supposed to do? It's because they think they are doing what they are supposed to do. That's right, they are not trying to do poorly; they think they are doing well. The biggest obstacle to customer experience is that employees think meeting expectations (satisfying a customer) is enough; that they are doing a good job. But customers today want more. They want their expectations exceeded. So employees may frustrate their bosses when it comes to customer experience. But it truly is a lack of alignment between what the store owner wants and expects and what the employee understands the store owner wants. 

So, by looking in a mirror and asking yourself if you have done everything you can, you know that it truly is a fault in the employee and not your management. And since you understand that sometimes the behavior of an employee is not intentionally bad, this first step is very important. 

The second reason I said this was important was legal protection. Often times, an employee may feel he or she has been wrongfully terminated and seek legal action. They file a wrongful termination suit against you and your retail store. Even if you are in an "At-will" state (meaning employees are hired at will with no guarantee of employment) you can still be sued.

Some of the next steps will help you protect yourself in those situations. But honestly, for me, I always wanted to make sure I was doing the right thing. Even if the employee was caught stealing, I still had a hard time firing them. The reality is that you are not simply terminating an employee. You are cutting off someone's livelihood and smashing their pride. 

Consider this, if your employee is married, they now have no way to support their family. Firing them not only impacts the employee but his or her family as well. And anytime you lose your job, it is a big shot to your pride. It is embarrassing and not a place anyone ever wants to be in. So, when I looked in the mirror, I was thinking about the person's family. Could I look them in the eyes and say I did everything I could. That's tough. But it really pushes you to do the extra.

2. Document. Document. Document

Each time an employee displays improper behavior or poor performance, document it. First, when it comes time to sit down with the employee, you have specifics to discuss. The truth is, an employee will act surprised when you confront them. And their version of "history" will always be different than ours. Having your facts in line beforehand will disarm them and make the meeting go much smoother. 

Also, consider that the more documented evidence you have of poor behavior, the harder it is for the employee to push back and the less likely they are to seek legal action as a result. The number one reason an employee wins a wrongful termination lawsuitis lack of documentation. 

3. Focus on Behavior

One of the biggest mistakes I see retailers make is that they hire and fire based on attitude. Customer service is all about attitude they will tell me. Well, the problem with that is that attitude is subjective. How can you measure a good attitude or a bad one? Isn't everyone's opinion on attitude different? 

Even performance can be tied to behavior. For example, if I am required to maintain 10 percent of my total sales in accessories, then instead of listing accessories below 10 percent, try "failure to offer customers accessories for their purchase as outlined in the job duties and responsibilities." 

Last thought on this point, attitude will not hold up in court. So if you get a disgruntled employee, then they might sue. And nothing will provoke a terminated employee more than discussing attitude. None of us think out attitude is bad. 

4. Have a Witness

The news of termination is never easy to deliver or hear. Always have a witness present. In retail, this can be tricky. Often times, you only have one or two other employees, so it can be hard. First, the witness must be an employee of your store. Don't invite your mom or friend to sit in with you. As a small business owner, you often times use family to help out, but this is not one of those times. 

The witness does not talk. This is important. They do not add to the meeting or share any thoughts. They simply listen and watch. They are your eyes and ears in case this goes to trial. 

Second, try to match the sex of the employee. So if you are terminating a male employee, have another male present. This is always good practice. 

5. Make Sure This Is Not the First Meeting 

Never move to termination without first giving the employee a chance to resolve. For example, if their sales numbers are down for two straight months (meaning below quota) then have a coaching session with them and give them a chance to correct their performance. 

The only time you should have this meeting is after the coaching meetings and the timeliness mutually discussed and agreed upon with the employee to correct the behavior have passed. Clearly, the exception to this rule is when the grounds for termination are actions such as theft or sexual harassment. 

Firing a retail employee is part of the job. If you own a store, you will have to fire people. It's just part of doing business. It would be great if every employee turned out as wonderful as their resume and interview. But the truth is, statistics estimate that as much as 40 percent of a resume is false and anyone can "fake" it through an interview. 

Do your due diligence. Document the behavior. Check yourself before making the decision and get a witness to help you.