How Does Frequent Firing Affect Organizational Culture?

Posted by

Refresh your news feed and you’ll see that someone else on the national stage was fired. So let’s take a closer look at this phenomenon. How does frequent firing affect organizational culture? Is there a better option? And if not, is there a way to fire someone while maintaining their dignity?

The Cost of Firing

Firing Affect Organizational Culture

Let’s start by being literal. The “real cost” of firing an employee is expensive. This may seem counterintuitive, because firing someone means you are no longer paying his or her salary. However—the shocking truth is that it costs 2.5 to 4 times someone’s salary to replace them. Why so much? You must factor in the lack of engagement before putting in notice, plus the hours it will take for advertising, screening, interviewing, hiring, onboarding, and training. Then add the fact that productivity might take a hit as the new person takes time to adjust and learn their role, which leads to another cost—errors. For a closer look, check out SHRM’s Cost of Turnover Worksheet.

A sneaky cost that might creep up is when someone leaves a position or is fired, others start to question their role as well. They may be more apt to look elsewhere if they feel their position is insecure, or worse– lose trust in leadership. And losing trust in leadership is a major concern for organizational culture. 

How Frequent Firing Can Affect Organizational Culture 

Firing Affect Organizational Culture

When trust is missing in an organization, people conceal weaknesses and mistakes from each other, hesitate to ask for help or feedback, jump to conclusions about other’s intentions, don’t offer to help outside of their own areas of responsibility, and fail to recognize and tap into one another’s skills. It’s easy to see what a negative affect this can potentially have on organizational culture.

It’s also a performance concern; an Interaction Associates & Human Capital Institute study shows high performing organizations have higher levels of trust than low performing organizations.

David DeSteno, a professor of psychology at Northeastern University and author of The Truth About Trust, says trust is an “evolving thing that ebbs and flows.” It’s important for all leaders to actively work on building trust with their teams, regardless of any issues of resentment.

So if leaders do find themselves in a firing storm, they must take the time to repair the broken trust that teams may have experienced. Here are five quick tips to help leaders reinforce their trustworthiness:

Five Quick Tips for Leaders to Build Trust

  1. Get to know your employees and let them get to know you. Express interest in your employees. Do you know where they grew up, or what their hobbies are? Look for things you have in common. This can happen casually, or at brown-bag lunches. You want your employees to know you’re in this together.
  2. Be transparent and tell the truth. Share what is going on with the organization as a whole with your employees. This includes the current status and future goals. Consider distributing information like notes from board meetings or performance metrics to employees. Don’t forget to share bad news too—if you don’t tell people the difficult stuff, they are less likely to trust you.
  3. Don’t play favorites. This one is a no-brainer, but sometimes managers don’t realize they are favoring certain employees over others. If you treat certain people to lunch, give particular employees assignments first, or share information with only a few on your team, your effort to build trust is completely undermined.
  4. Trust your employees. Trust is a two-way street. If your employees don’t think you trust them, they aren’t going to trust you. Show your team you trust them by delegating tasks and giving them autonomy. Don’t tell them what to do; instead, motivate them to meet their (clearly set) goals and let them decide how to achieve them.
  5. Be competent and accountable. In order to believe in your management decisions, employees need to know you are competent. Show them this by being accountable, taking the blame when you make mistakes, and by always working to develop your skills. Don’t play the expert card—instead, have the humility to ask questions and show an eagerness to learn.

Is There a Better Option to Firing? 

Firing Affect Organizational Culture

As you can see, there is potentially a lot of cleaning up to do after firing a single employee, not to mention the damage control that comes after firing several. It’s costly, potentially damaging to organizational culture and employee engagement, and can erode trust within the organization. All of this affects the organization’s ability to be productive and reach new heights.

So is there a better option? That depends. Sometimes firing is necessary. I’ve known leaders who had to come in and clean house in order to save an organization. Other times the people in question were damaging employee engagement and productivity far more than the aftermath of firing them would. An engaged employee is four times more productive than a disengaged one, so unfortunately, sometimes you have to fire a toxic employee.

Yet wouldn’t it be better to become a better manager, focus on the employee, and skip the drama, not to mention the bad press? Start by improving your listening skills and emotional intelligence, work on your ability to communicate, and practice how to best approach crucial conversations and conflict.

As I mentioned, sometimes firing one or more employees is necessary. If that’s the case, and you feel confident it’s in the best interest of the organization, fire the individuals in question without sacrificing their dignity. I know that seems challenging, yet it’s completely possible.

How To Fire Someone Without Sacrificing Their Dignity

Firing someone is a work of art. Do you have a humane firing process in place? When employees are let go, do they leave with dignity?

How can you fire someone without sacrificing his or her dignity? I believe that if a leader has done her job properly, firing should come as no surprise to anybody.

I find ‘Designing the Alliance’ a very helpful place to start. That’s a fancy way of saying: set everything up in advance. When you hire a new employee make it very clear what your expectations are and clearly define their role. Discuss how they work, what their communication style is and how they learn best. This process may take 1-2 conversations.

Once that information has been shared and gathered, get it all in writing. Outline how you will communicate, how often performance reviews will happen plus other important things you discussed. Document everything.

When will this documentation come in handy? How do you actually use the alliance you’ve designed?

Take a look at my interview with Cornell University below to learn more about how designing the alliance can help you fire employees in a humane way.

We’ve all been witness to a lot of firing lately, and there may be more on the horizon. Undoubtedly, we will face the reality of letting someone go in our own organizations sooner or later. Be aware of the potential pitfalls of letting people go, work to remedy them by building trust, and ensure the process leaves the departing employee with their dignity intact. Better yet—invest in who you hire and develop them into an asset to your organization and its culture.

Have you worked in an environment where a lot of people have been let go? How did it affect the organizational culture? How did you feel personally? I’d love to know. Please leave a comment below, send me an email, or find me on Twitter.

Get Monthly Leadership Tips from Anne Loehr
Is your leadership ready for the future workplace? 

Leave a Reply