Q. "How do we tell an employee they were not selected for an open position?"
Answer:
We recommend a face-to-face conversation with the employee who wasn’t selected. If you elaborate, keep feedback honest and factual. For example, let them know you went with a candidate whose skills more closely match what you were looking for, specifying what those skills are so they know what to work on in the future. Factual, job related feedback like this helps set up the candidate for future success and encourages them to accept, rather than dispute, the decision.
Assuming you want to keep this employee, have a short conversation about their career trajectory, what they could apply for in the future, or how they can grow their skills. They will be understandably frustrated, but the feedback will help to foster a more positive and productive conversation about their next career step with the organization.