"It's always sad and shocking when somebody so young dies, but one of the things that made it even more upsetting is that so many of us who knew and loved him were actively involved in trying to get him better," Murphy said in an interview with the Hollywood Reporter.
Fox, which airs Glee, announced Friday that the series has delayed production, as well as its fifth season premiere date, in the wake of Monteith's death at 31 from a toxic mix of heroin and alcohol.
"When you're faced with something so sad and so shocking, what do you do? Do we cancel the show? Do we start shooting in January? What do we do?" Murphy said in the interview. "Ultimately, we decided the best thing for everyone is to get back to work and be around people who knew him and loved him so that everyone can grieve together."
As for Monteith's character Finn Hudson, McKinley High's football star-turned-glee clubber, Murphy says the role will not be re-cast. The current plan, he says, is to pay tribute in the season's third episode.
"The right thing to do for the show, at least at this point, is to have that character pass," Murphy says. "When we do the tribute episode to that character, we'll have to do it in a way where the castmembers will not have to re-create feelings of grief that they’ve had this week – but do it in an upbeat way."
Murphy also says he spoke with Monteith's costar and real-life girlfriend, Lea Michele, telling her he would understand if she didn't want to return to Glee. But, he says, she said that was not an option.
For much more on Monteith's rise to fame, his past addiction struggles and his final days in Vancouver, pick up this week's issue of PEOPLE, on newsstands now
Fans of Monteith may make donations in his name to three charities that were especially important to him: Project Limelight Society, which exposes youth living in Vancouver's Downtown Eastside to the arts; Virgin Unite, founded to support entrepreneurial efforts to better the world; and Chrysalis, which helps homeless and low-income individuals find employment.