Zipline's CEO shares advice from board member Alfred Lin: fire someone the first time you consider it. The logic is that for true A+ players, the thought never crosses your mind. Debating whether someone is a C- or C+ performer is a poor use of a leader's time and energy.

Leaders struggling with firing decisions should reframe the act as a protective measure for the entire organization. By failing to remove an underperformer or poor cultural fit, a leader is letting one person jeopardize the careers and work environment of everyone else on the team.

Firing employees is often an emotional process for leaders. To make it objective, establish clear service level agreements (SLAs) or non-negotiables for every role from day one. If an employee consistently fails to meet these pre-defined expectations, the decision to let them go becomes a logical consequence of their performance, not a subjective feeling.

Firing decisions should be a function of both incompetence and business constraint. Not all underperformers are equal priorities. Some are like a "trash can on fire in the driveway"—a problem, but not the company's main bottleneck. Focus firing efforts on roles that are the direct constraint to growth.

While a single performance-based layoff can target underperformance, repeated rounds signal a systemic failure in leadership. It suggests managers are unable to hire, coach, or provide feedback effectively, making it a management problem rather than an individual employee issue.

Companies pay severance to gain concessions. An employee being fired has leverage by offering to: 1) save the manager time on a formal PIP, 2) control the narrative positively to the remaining team, and 3) allow the manager to feel they handled the exit gracefully.

Keeping an employee in a role where they are failing is a profound disservice. You cannot coach someone into a fundamentally bad fit. The employee isn't growing; they're going backward. A manager's responsibility is to provide direct feedback and, if necessary, 'invite them to build their career elsewhere.'

When a startup fails due to team issues, the root cause isn't the underperforming employee. It's the CEO's inability to make the hard, swift decision to fire them. The entire team knows who isn't a fit, and the leader's inaction demotivates and ultimately drives away top performers.

Netflix uses a "Keeper Test" to evaluate employees, a practice made viable by generous severance packages. The severance acts as a clean alternative to bureaucratic Performance Improvement Plans (PIPs), empowering managers to make swift talent decisions.