July 30, 2026

When to Let an Employee Go: Signs It’s Not Working and What to Do Next

Most managers remember the first time they had to let someone go. 

You can know, rationally, that it is the right call. But the moment you sit down across from that person, an uncomfortable feeling can set in. Not because you doubt the decision. Because it’s another human’s livelihood, and most managers care about their employees.

What I’ve learned since, working with hundreds of managers, leaders, and business owners, is that the hardest part of a termination is rarely the conversation itself. It’s everything that comes before (or didn’t happen).

I recently sat down with Jared Speier, a Labor and Employment Partner at Stradling Yocca Carlson & Rauth, who has spent over 20 years representing employers in everything from wrongful termination claims to complex class action lawsuits. When he’s not in the courtroom, he’s helping businesses stay out of it, working with them on performance management, handbooks, and the day-to-day decisions that seem small until they aren’t.

There was so much from our conversation on the Grown to Lead podcast that managers need to know, from proper documentation and performance conversations to behavioral warning signs and how to tell it’s time to part ways.

 

4 Signs It’s Not Going to Work Out With an Employee

The honest truth, as Jared put it: no termination should ever be a surprise.

Not to you. Not to the employee. If you’ve been doing the work upstream, such as setting clear expectations, having the hard conversations early, and documenting what’s happening, then by the time you’re sitting across from someone saying “it’s not working out,” they should already know it’s coming. 

However, most managers don’t do this. As Jared said, “Nine and a half times out of ten, it doesn’t happen that way.” This presents a major opportunity for managers to rethink how they provide feedback. 

So what does “not working out” actually look like in practice? Here’s what I’ve seen, and what the research and Jared’s legal experience confirm.

 

1. Performance isn’t improving despite clear, documented feedback

This is the most common scenario and the easiest to explain when handled correctly. The employee knows the expectations. They’ve been told specifically what needs to change. You’ve documented it. And the behavior or output isn’t moving.

Jared’s framework here is what he calls the “holy trinity” of counseling conversations: the goal, what the employee needs to do to hit it, and what happens if they don’t. Every performance conversation and every piece of documentation should hit all three. At any time, an employee should be able to answer what their goals are and how close they are to reaching them. 

2. The pattern keeps repeating

One late arrival is a conversation. Two is a yellow flag. Three is a pattern, and patterns need to be documented. The same applies to missed deadlines, errors, conflicts, or any recurring behavior that’s affecting the team.

Jared’s rule of thumb: smaller infractions warrant documentation when a pattern emerges. Bigger ones, such as a safety violation or a significant error, need to be documented the first time, with the consequence clearly named. And when you do document, it needs to be timely. Not a week later; right away or the next day.

3. They’re surprised by feedback that shouldn’t surprise them

This one stings a little, because it’s often a sign that we’ve been too easy on them. If an employee has had three years of glowing annual reviews and then gets fired for poor performance, there’s a documentation problem. 

Don’t sugarcoat it. That’s his phrase, not mine, but I’ve said it to clients for years. You can be kind and honest at the same time. In fact, that’s the only way feedback actually helps someone.

4. The team is carrying the cost

I’ve seen this so many times. There’s one person on the team who isn’t working. And instead of addressing it, the manager absorbs the slack or lets the rest of the team carry it. Over time, that erodes the culture far more than a difficult conversation ever would.

As Jared put it, “The team exists independent of the people that are on it.” Your job as a manager is to build the team that can achieve what the business needs. Sometimes that means making a hard call. And when you make that call, I have watched team cultures shift almost immediately.

 

What Stops Leaders From Acting Sooner

Almost always, it’s one of three things:

    1. The desire to be liked. 

    1. The hope that things will improve on their own. 

    1. The fact that no one ever taught them how to have these conversations in the first place.

 

New managers in particular often come from individual contributor roles where they were close with their colleagues. Managing former peers is hard. Managing someone you like is hard. And without a structure to fall back on, most people avoid the conversation until it becomes unavoidable, which is exactly when it’s most expensive.

Jared’s advice for new managers heading into a difficult conversation is to practice with HR first. Run through what you want to say. Anticipate pushback and know how you’ll respond. Stick to the facts. And when the employee challenges you, because they will, don’t get pulled into a debate. “Say, look, I can look into this more, but right now this is what I’m seeing.”

The reps build the muscle. The first one is the hardest. It doesn’t mean you’re heartless for getting better at it. It means you’re doing your job.

 

What to Have in Place Before Letting Employees Go

If you’re asking whether it’s time to let someone go, the next question Jared always asks is: what’s the story you’re going to tell? And can you back it up?

Here’s what he wants to see:

    • Consistent, written documentation spanning several months, not a sudden flurry of write-ups right before the termination.

    • Documentation that was shared with the employee, not just kept internally. Internal notes are useful but limited. The employee needs to have seen it and had a chance to respond.

    • A written follow-up after every counseling conversation, summarizing what was discussed and inviting the employee to flag anything inaccurate. That invitation for feedback is legally meaningful.

    • Clear expectations from the start. If the job description was vague, if the goals were never set, if the employee genuinely didn’t know what was expected of them, that matters. Some terminations could be avoided entirely with better onboarding.

 

When You’ve Made the Decision: What Comes Next

Once you’ve decided to move forward, there’s a process that protects both the employee and the organization. We’ve put together a separate downloadable checklist below based on Jared’s framework with practical steps to walk through from the decision point to the final day.

The headline from Jared, and one I want to make sure lands, is this: 

A 15-minute phone call with an employment attorney before you act is always cheaper than trying to unwind something you shouldn’t have said or done. Always.

 

This Is Learnable

The cost of a bad manager, Jared told me, can run into the millions, from harassment cases to discrimination claims to wrongful termination suits. The small errors, left unchecked, compound into the big ones.

But most of it is avoidable. Not all of it. Some employees will be litigious regardless of how well you’ve managed them. But the managers who set clear expectations, have honest conversations early, and document consistently are in an entirely different risk category than the ones who don’t.

This is a skill. Like any skill, it can be taught. And the earlier you start, the less it costs.

If you want to develop managers who can handle the realities of leading people, including the hard ones, our Manager Essentials program was built for exactly that. And if you want to hear the full conversation with Jared, you can find the episode of Grown to Lead wherever you listen to podcasts.

Reach out to learn more about working with Plum.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Employment law varies significantly by state, province, and jurisdiction. Always consult a qualified employment attorney in your area before making termination decisions.

 

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