At the fear of being labeled immature/unprofessional: i have found that in many cases i morally owe my employees reasons for their being let go. I have never had to release an engineer on behavioral issues, so i always try to be clear with them about paths to improvement.
i'm certain this varies across companies, but in the startups i have worked for i've build very close relationships to many of my coworkers. i like to think there is a mutual trust established in that relationship. Part of that trust includes me looking out for their best interests, which i feel includes explaining to them what their next steps are to further their careers after they depart.
The vast majority of the people I've had to fire have been salesmen who simply did not perform. At first I thought we should have a solid agreement with the sales person; one that laid down the expected metrics for the first 90 days and thereafter.
My attorney insisted I understand that when you fire anyone in California you must --you must-- say nothing pertaining to the reasons for the firing. I made the mistake of behaving like a human being once and it cost me thousands.
Can you share more details of the story? I've been assuming this rule exists mostly to avoid the danger that you might accidentally phrase the reason for termination such that it could be treated as discriminatory... but this really sounds like the problem is deeper than that.
Facts matter not when the Labor Department gets involved. I walked in with a legally-binding contract done by my attorney and singed by the guy I fired. He was required to sell a certain dollar amount in 90 days. He sold exactly zero. Zero. The Labor Department mediator made me pay him several thousand dollars in ADVANCE COMMISSION I withheld at the time of firing. In reality, per the agreement, he owed ME several thousand dollars or advance commission he, effectively, never earned because he sold nothing. It didn't matter.
This happened because I told him I was letting him go because he did not sell anything. He (and the Labor Department folks, I'm sure) came up with some bullshit reason why I should pay him money anyway.
Had I given no reason whatsoever it is likely that there would have been less grounds to even bring forward a case. I'm summarizing something that is a bit more complex than the above but the overall idea is very much there.
Regrettably what you have to do is smile every day, take notes, document everything and, if the decision to fire is made, simply fire people without any explanation whatsoever. It goes something like this: "I'm sorry. I have to let you go. Here's your check." And walk them out immediately.
Oh, yes, if you can you should really consider having a witness to the firing. I was laid off twice in my life and both times there were three people in the room. Years later I would understand the reasons behind something that seemed weird and almost demeaning to me at the time.
I don't like having these kinds of relationships with people I work with but the legal framework in our state pretty much dictates you act this way for simple self preservation.
In reality, per the agreement, he owed ME several thousand dollars
How does an unsuccessful salesman owe you several thousand dollars? And you are saying you withheld money at the time of firing.
Sales is precarious, but sales without a base is nasty.
I also notice in your language terms like "he, effectively, never earned". Basically, it sounds like this guy worked for you, didn't do so successfully and then you were forced by a court to pay him for his time, rather than you getting into trouble for letting him go.
I was going to treat you to a tune on the worlds tiniest violin, but I told the mice about your plight and now they are refusing to play it for you.
> How does an unsuccessful salesman owe you several thousand dollars? And you are saying you withheld money at the time of firing.
There are many approaches to paying a sales person. I've probably tried them all. This particular variant was one where you pay a base salary, say, $30K/year and, on top of that, a advance on unearned commissions. So, every week the sales guy is getting a check with two components, one he earned and one he is presumed to earn in the future.
In most agreements the sales person is liable for any commission that was not earned at the time of separation. If I paid you $5,000 in advanced commissions and you only earned $2,500 at the time of separation you owe me $2,500. That's money I was loaning you every week on the assumption that you would sell and actually earn it in the future.
This is standard stuff, nothing revolutionary here. I have to say that as an engineer dealing with sales people was one of the most difficult and gut wrenching things I've ever had to do. It took me years to understand the, sorry, sub-species. I've seen it all.
Anyhow, the fellow in question had been advanced commissions for nearly 90 days before I let him go. Yes, I was a sap back then. I actually kept thinking that this guy would wake up after my frequent pep talks and start selling. I let him float by all the way to the 90 day mark. When I laid him off I gave him a check equivalent to four weeks of his base pay and withheld (did not pay him) the commission advance I had been paying him all along. Why? He was gone. Like I said, he actually owed me money. And, again, I was nice. I was only supposed to pay him two weeks at the point I let him go. It was near the holidays and I decided to give him another couple of weeks to be helpful. Big mistake. This was during my early days of dealing with such folks and, true to what I said above, I was a total sap. BTW, I've never had problems with engineers, web developers, marketing people, production folks, not even the shipping dudes (other than the occasional swiping of wrenches and minor tools from the shop). No, it was always the sales guys that kept me up at night until I learned.
Here in California the labor department is decidedly anti-business. It was almost a foregone conclusion that his complaint would be decided on his favor. I was too naive and inexperienced to understand the game being played.
It's an amount of money paid above a base pay. This amount represents future commissions not yet earned by the sales person. This is done in order to provide a more stable paycheck during the initial "on-boarding" process as well as during lean times.
Frankly, I never understood why sales professionals don't just work for a good wage and that's it. The very engineers who build the products earn a decent wage, work long hours, are continuously studying and sharpening their skills and devoted years of schooling to even be able to get the job.
In my early exposure to sale folk I recoiled at the idea of paying someone commission because I felt that if one person got commissions then everyone involved in bringing the product to market was just as entitled to them. Of course, the problem is far more complicated than that and I quickly learned you simply could not hire a good sales person unless they saw some kind of pot of gold at the end of the rainbow. That's just the way that side of the universe has devolved and that's it.
One approach I have never tried is to have everyone on stock options. Pay the sales folks a good salary, not some crapy $30K/y base + commissions. The theory being that they are going to want to work just as hard to get the company to a level where their stock will make them a bundle of money. A lot of folks in sales are very mercenary in nature and end-up living from battle to battle, commission to commission. This sets-up a situation where it might actually be difficult to convince them to use a forward looking approach and forgo the usual deal in favor of stocks at some time in the future.
My experience got me to the point where I determined it was a far better idea to identify someone with no sales experience and bring him/her up into sales from within the company. No bad habits, better connection to the business, actually thankful for bringing them up to a level where they could earn real money and a whole host of other benefits. Once I tried that approach and had good results I never hired another sales person from the "real world" again.
It's always great if you can tell the employee what they need to do to improve. Do that while they still have a job. Work with them on it more than once.
Exactly. I wonder if some of these places have performance reviews. The first time you find out you're doing a crappy job should never be on the day you're fired!
i'm certain this varies across companies, but in the startups i have worked for i've build very close relationships to many of my coworkers. i like to think there is a mutual trust established in that relationship. Part of that trust includes me looking out for their best interests, which i feel includes explaining to them what their next steps are to further their careers after they depart.