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Firing the first - and only - employee he'd ever hired was the hardest thing Adam ever had to do.

The Toronto entrepreneur, who asked that his real name not be used, had known for several months that his employee, who he'd hired to assist with clerical work in the office, wasn't working out the way he'd hoped. "I really noticed there were deficiencies in the performance in terms of skill set and attendance," he says.

What he did next is just what experts recommend: He spoke to her about the deficiencies on several occasions, offered her coaching and support, and made a record of it each time.

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But more than six months later, "nothing had really changed," he says. "I realized I had to fire her."

It's an all too common scenario, says Toronto-based executive coach Peggy Grall, who works with executives to navigate through intense change in their workplaces, including firings.

"Many people are unprepared for this," she says. And, she notes, small businesses usually don't have human resources staff to deal with it.

Because firing is such a difficult thing to do, many entrepreneurs don't want to deal with it at all, adds Cissy Pau, principal consultant at Vancouver's Clear HR Consulting.

"They tend to avoid the issue altogether, and then things fester, and all of a sudden there's an explosion," says Ms. Pau.

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Firing an employee in the heat of the moment - without any documentation of poor performance or attempts to help them do better, or legal consideration - is rarely justified and can go wrong in a number of ways.

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For starters, it can damage the brand. "Everyone wants their company to be considered a great place to work," says Ms. Pau. "If you handle a firing badly it could come back to bite you," she adds, pointing to a case in which a Kelowna, B.C., woman was fired on Facebook.

"Communicating that way may have been very normal for this company," she says. "But from a brand perspective this will be very hard to overcome."

Ms. Grall agrees that reputation is something to consider. If you fire without due diligence, "you've just sent people out to the marketplace with a really bad feeling about your company."

Like it or not, in situations where an employee isn't performing up to par, the onus is on the employer to try to make the situation right - and to make a record of those efforts.

"You need to be able to demonstrate that you have made every effort to get training for that person," says Ms. Grall.

Clearly documenting attempts to correct poor performance is a non-negotiable step of the process. "I've seen situations where the poor performance has gone on and on and then the employer is in a tough situation," she says. "Everyone may agree this person needs to be let go, but if you haven't documented then you could be looking at a lawsuit."

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It's important also to make the consequences of failing to correct poor performance crystal clear. "You need to say, 'If you don't meet these requirements, your job could be in jeopardy,'" says Ms. Pau, adding that employers should want employees to feel like they gave them a fair chance.

Ms. Pau says that often when employees aren't performing well, it's because they're not getting appropriate guidance in the first place. "If an employee isn't working out it's not always the employee. It's usually because the employer has not explained the expectations of the job and is not providing training or coaching," she says.

That's a point Adam can relate to. He hired his employee without a formal job description or even a contract. "I always felt that knowing the expectations from the beginning was something that was missing," he says, adding that he tried to correct this with constant feedback and clarification on what his expectations were.

In fact, the hiring process is where most employers initially go wrong, says Ms. Grall - if smaller operations paid more attention to hiring, they wouldn't have to worry so much about firing.

If you do find yourself in a situation where you need to fire someone for poor performance, call a lawyer, experts advise.

"Is it a layoff versus a termination, or a termination without cause? What do you owe in terms of legal severance and notice? All of these questions must be answered," says Ms. Pau, who adds that the costs of a lawsuit instigated by the let-go employee will be far higher than the cost of consulting with a lawyer before the firing.

It's not uncommon for an entrepreneur to put off firing simply because of fear. "I was scared," says Adam. "I'd never fired anyone before and I thought, 'How am I going to do this?'" He consulted both his lawyer as well as entrepreneurs in his field for advice.

Once you've talked to a lawyer and decided it's time to fire an employee, don't delay, advises Ms. Pau. "Other staff will have noticed that this person is not working out, and that is going to affect productivity and morale."

The issue of other staff is one that's often overlooked, says Ms. Grall. "Even if that person was doing their job terribly, they may have had a lot of friends. Employers sometimes fail to realize the impact on the people left. Handling internal communication around this change is key," says Ms. Grall, who recommends telling staff promptly, without divulging details that could damage the reputation of the person fired, and making clear what will happen to that person's workload.

The small business environment can further complicate firing because of the personal bonds that form.

"You work together with someone in a small business and it's pretty much just you and them," says Adam. "You form a personal attachment and it makes it more difficult."

But if you want your business to have every chance at success, you can't afford to keep employees on the payroll who simply aren't performing. "As soon as I let her go, I felt this huge weight had lifted from my shoulders. And to reinforce that it had been the right thing to do, the business started doing better. It wasn't easy, but it was the right choice."

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