How Do You Know When It's Time to Fire a Problematic Employee?
"On a dream team, there are no 'brilliant jerks.'"
That line comes from Netflix's culture memo, which grew out of the famous 2009 Culture Deck developed by co-founder Reed Hastings and then Chief Talent Officer Patty McCord. The original deck had already flagged brilliant jerks as too costly to effective teamwork, and it became one of the most referenced documents in business culture for a reason: it names a hard truth most leaders avoid.
The updated memo puts it this way: "Our view is that brilliant people are also capable of decent human interactions, and we insist upon that." HubSpot co-founder Dharmesh Shah has called the original deck the canonical culture deck that inspired HubSpot's own.
If you're holding onto a difficult employee right now because they're too skilled, too central, or too expensive to replace, you're in good company. You're also, according to the research, making the more costly choice.
Why This Is So Hard to Admit
If some part of you feels guilty even reading this, that's worth naming before anything else. You probably hired this person yourself. You may have trained them, defended them, given them real chances to improve. Letting someone go doesn't just feel like a business decision. It can feel like admitting a mistake you made, or abandoning someone who depends on the income. None of that makes you wrong for hesitating. It makes you someone who takes the weight of this seriously, which is exactly the opposite of taking it lightly.
The hesitation usually has a second layer too: this person is often genuinely good at the job. That's precisely what makes the decision so hard, and precisely why it tends to get avoided longer than it should.
The Real Cost of Keeping a Problematic Employee
Researchers Michael Housman and Dylan Minor studied more than 50,000 workers across eleven companies in a Harvard Business School working paper and found something that cuts against most hiring instincts.
Avoiding a single toxic hire was worth an estimated $12,489 to a company, more than twice the $5,303 in cost savings from hiring a top 1 percent "superstar" performer. Keeping the peace, in other words, was worth more than chasing the star.
Here's the part that explains why so many leaders miss this: toxic workers were also more likely to be high performers, or at least to be seen that way. That's exactly what makes them so hard to let go of, and exactly why the damage keeps compounding quietly in the background while the output on paper looks fine.
It also spreads. According to the same research, employees exposed to a toxic colleague were more likely to be terminated later on, and toxic workers drove other employees to leave faster and more often. One difficult person rarely stays contained to just one person's problem.
Signs It's Time to Fire a Problematic Employee
A few honest signals tend to show up well before most business owners act on them:
Good people are quietly avoiding this person, rerouting projects, requesting different meetings, or managing their schedule around someone else's moods.
You're spending a disproportionate amount of your own time managing one relationship, far more than their role or their output would ever justify.
Their skill is the only reason you haven't acted, and you notice yourself making excuses for behavior you wouldn't tolerate from anyone else.
Your best people have started asking about leaving, or have mentioned this person specifically as part of why.
If two or more of these are true, the cost has likely already outpaced whatever this person is still bringing in.
How to Actually Let an Employee Go
Document the pattern, not just the moment. A clear record of specific incidents protects you and makes the eventual conversation about facts rather than feelings.
Get real guidance before you act. A quick conversation with an employment attorney or HR consultant, even for a small business, is worth far more than guessing your way through a termination.
Set yourself an actual deadline. Open-ended "I'll deal with it eventually" is exactly how a six-month problem becomes a two-year one. A real date on the calendar changes the decision from abstract to concrete.
Be clear and brief when the moment comes. A short, respectful, unambiguous conversation almost always goes better than one stretched out by over-explaining or second-guessing yourself in real time.
What This Looks Like in Practice
I've coached a founder who kept her most technically skilled employee on the team for over a year past the point she privately knew it wasn't working, specifically because replacing that skill set felt impossible.
What she hadn't fully tracked was the cost on the other side: two strong team members had quietly started looking elsewhere, and she was spending hours most weeks managing friction that never used to exist.
When she finally let the employee go, she expected a slump. Instead, the team's output held steady within weeks, and the tension she'd been carrying without fully naming it simply wasn't there anymore.
In my experience as a life coach, the business owners who navigate this well aren't the ones who stopped caring about the person. They're the ones who let themselves see the full cost clearly, the whole team, their own time, their own peace, instead of only the cost of the empty seat.
You're allowed to protect the team you've built, and you're allowed to protect yourself in the process. Those were never supposed to be in competition.
Carrying a Difficult Employee Decision Alone?
If you've been weighing whether it's time to let someone go and could use a clear-headed conversation about it, you don't have to sort through it by yourself. Book a Free 30-Minute Chat with Asi Efros to talk through what this decision could actually look like. 👉 Book your free 30-minute chat here
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