“Just get your cheque book out and deal with it there and then,” says Peter Knight, Real Business columnist and founder of marketing firm Phoenix.

Pay whatever it takes to avoid all that unnecessary waste of time with lawyers and then get them off the premises that day.”

Knight refuses to beat himself up over hiring the wrong person. But he is very self-critical of allowing the wrong person to stay and contaminate the rest of his team.

How do you calculate how much to pay someone off with?

“Work out how much the member of staff is owed in redundancy pay, back pay, etc. Once you have broken the bad news, show them the calculation,” advises Mark Needham, founder of mobile computing company Widget UK.

“Immediately make out a cheque for substantially more than that amount, preferably double, and offer it to them. Tell them you are paying them far more than you owe them, and the only thing you ask in return is that they sign a disclaimer saying that they have been paid in full, and will not sue you for anything in the future.”

A tricky-minded lawyer once pointed out to Needham that employees could claim that they had accepted his cheque under duress and attempt to have a court overturn the disclaimer they signed.

Needham isn’t fazed. “In practice, most people will stick to their word even if they regret it.” 

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