top of page

Ask Allen: How do I terminate employees who are also friends?

I have a small business with five employees and myself. We are all friends and work closely together. One of my employees is having personal problems, whether because of drinking or drugs, I don’t know; but I do know that his work has deteriorated to the point that I will have to terminate him.

How do I go about that without destroying our friendship and possibly causing actual damage to him?

Signed: Tough decision to make.

Decisions such as these are indeed tough to make, but they are not uncommon for managers and business owners. There are ways to smooth the event and to insure to the best extent possible that everyone remains friends.

The key to handling personnel decisions such as these lies in having pre-established policies and procedures, which everyone knows and accepts. It is best to have these in writing, even if somewhat informally on “information sheets” or in a notebook. Use an “employee manual,” with details about insurance, work hours, vacation and sick day policies, goal attainment and measuring same, etc.

That, in turn, should be accompanied by having a “team spirit” which permeates the company, regardless of the company’s size. When these two basic foundations are in place, most personnel decisions are made with relative ease and comfort, and with the acceptance of the individual employees concerned.Finally, in my opinion, you should be guided by the Golden Rule: “Do unto others as you would have them do unto you.” If the situation were reversed, how would you appreciate being treated?

Please refer to for additional information. My five page response details suggested procedures which hopefully will be helpful.

More to the point of your specific case, and not knowing whether your company has established policies and procedures in this regard, I will assume that none exist. That being the case, I suggest approaching the matter along these lines:


  1. Have as much lead time as you feel reasonable prior to actual termination to have a “final chat,” as I have termed it through the years.

  2. Have a face to face meeting; do not use texts, emails, etc. to set it up.

  3. Have the meeting in your office or in a quiet environment, making sure that you and he or she will not be disturbed.

  4. Have some lead time between the time you invite the employee to the meeting and the actual meeting; don’t just see the person on the shop floor or the in the hall and say “let’s go to the office.” He/she needs a little time to think. Have a set time, not just “come by the office tomorrow afternoon.”

The purpose of (1) through (4) is to give a certain sense of formality to the occasion; nothing overly serious, but out of the ordinary enough to let the person know that your visit will not be routine.


  1. Prepare yourself with figures, such as missed quotas, time away from work, loss of production, etc. depending on the nature of the person’s job responsibilities.

  2. If you feel it appropriate to do so, informally select some possible job openings in your area.

  3. Make sure you are resolute in your decision about (a) probationary period, if any (b) immediate termination, or (c) date of termination. Do not allow yourself to be talked into not following through on your considered decision.


  1. When the employee, your friend, arrives, shut the door, have him/her seat themselves and take your seat; it doesn’t matter if you are behind your desk or not – probably best not to be, if there is a long time close relationship – but whatever physical format most comfortable for you.

  2. Do not be overly anxious or visibly nervous. He/she probably already knows the nature of the conversation to come; and as one of my former managers said to me after our conversation, “If I were you, I would have fired me six months ago.” We have remained good friends for years, by the way.

  3. Begin by being open and honest, as should be the case always, but remember that you are dealing with something that will have a major impact on the employee’s life and family. Speak calmly and open with something along these lines: “you know, we have always been friends; I respect you, and intend for our relationship to continue for the rest of our lives. We do need to discuss something related to the business, but I want you to know that my respect and friendship for you will never change. As you may know, for quite some time ……. (show numbers, lack of production, attendance, etc. whatever might be the case), and as I’m sure you know that our company cannot survive without everyone on the team meeting goals. That being the case, we are going to need to do something; what do you think is the best thing?”

Then listen. There are no fixed formulae to follow. Termination decisions may range from the company having to lay off one or more people to lack of production, etc.

If your time frame permits, give the employee time for improvement. From a purely business standpoint, it is much more advantageous to salvage a once good employee than to hire and train and new one.

It would be best not to mention any personal problems; let the employee bring that up if he or she cares to discuss it. Use measurable performance metrics, as much as possible.

  1. After the discussion and communication of your decision, (I once had a long talk terminating someone, and the person – a telephone technician – when he was about to leave said something to effect that “I really thank you for the talk, Mr. Wood, and I’ll sure do better,” whereupon, I had to say, “I’m sorry I didn’t make myself clear John, you are fired.” His reply was, “oh OK,” and we remained friends for years to come), reiterate that he/she is a good person, that everyone is not cut out for every position, that you will help them with references*, that you suggest that they try xxx company, who you understand is hiring, etc. Most of all reiterate that you respect him/her, that you value their friendship. They may or may not agree with your decision, but they will appreciate the fact that you have acted out of logic, fairness, and have respected them enough to allow them to leave with dignity.

  2. Both you and, in all probability, the employee will feel relieved after the meeting. Each of us knows whether or not we are doing a good job and contributing to the team effort. We also know that there are economic consequences when we fail, for whatever reason, to perform our jobs. In my mind, as long as we realize that each of us is a fellow child of God, hopefully doing the best that we can, and treat each other accordingly, we can sleep well each night.

In the discussion above, I mentioned references. There have been several laws regarding references and post employment information to third parties over the years. Caution is advised, and one would be wise to consult an attorney for detailed information. I personally feel that we have become overly cautious and “cold” in the area of terminations; the typical scenario, particularly in large companies, is to present the employee with a notice of termination, have security accompany him or her to her workplace to collect personal belongings, and to escort them off the premises. Even though I have terminated many people on behalf of a large company which bought my smaller company, I always tried to handle the situation on as personal and empathetic basis as practicable. Once again, I sleep well at night.

I hope this helps, but additional information can be gleaned from attending an Excellent Entrepreneur Roundtable Session.

9 views0 comments

Recent Posts

See All

Ask Allen: How do I get the best interest rate possible?

How do I negotiate a better interest rate? --Trying to save on Expenses From your question, I am assuming that you presently have one or more substantial long term loans. If you are considering a new

Ask Allen: How do I communicate effectively with banks?

How do I sell my business model to a bank? --Trying to get traction. As “Location, Location, Location” is of utmost importance to fast food chains, car dealerships, and branch banks, “Communication, C


bottom of page