The biggest mistake most employers make when it comes to employee terminations is dragging out the process.
Any experienced human resources professional will tell you that waiting around to fire an employee serves no one—not the employee, not their colleagues, and certainly not your company.
An employee who is underperforming is likely unhappy and/or unfulfilled. They are wasting their time and your company’s time, costing you productivity and profits.
Not to mention, when other employees see that a weak employee is permitted to stay without accountability despite poor performance, negative attitude, inappropriate behavior, and so on, it can result in a drop in morale and even more adverse effects on your organization.
This does NOT mean you should rush into firing someone without thinking it through! On the contrary, there are steps you should take prior to letting someone go as well as best practices for the actual firing process.
Before moving forward, it’s important that you understand:
- The types of employee terminations
- What to do before terminating an employee
- Exactly how to fire someone
This is one of the most difficult aspects of owning a business and it’s always going to be somewhat painful. That’s why many organizations now focus on employee retention by implementing effective onboarding programs and consistent performance review processes.
Sometimes, the working relationship still doesn’t work out. When you have a solid employee termination policy and process in place and document all disciplinary action, the outcome will be that much easier for both parties.
Types of Employee Termination
There are two types of employee termination every business owner should understand so that you can manage the severance and protect your company effectively.
In the event of a voluntary termination, the employee ends the working relationship.
This may come as a standard two-week notice of resignation, verbal resignation without notice, or the unfortunate “ghosting”—when an employee simply stops showing up for work or responding to communications.
Employees who choose to end their employment are typically not eligible for unemployment benefits.
Involuntary termination is when a business has decided to let the employee go. This type of termination falls into two categories: without cause and with cause.
Termination without cause includes layoffs and downsizing. These could be a result of current economic conditions, the company’s performance, or an overall restructuring.
Termination in these scenarios is not the employee’s fault, so they are usually eligible for unemployment benefits.
This is when the employer fires an employee for a specific reason. Some of the most common causes include:
- Low productivity or poor quality of work
- Insubordination, dishonesty, or violating company rules
- Frequent absenteeism or tardiness
- Harassment and discriminatory behavior toward other employees or customers
- Theft or other criminal behavior like sharing trade secrets
- Violence or threats of violence against other employees or customers
The first three reasons affect your business’s efficiency and work environment and should be addressed by a manager. Termination for these reasons should be the final step after progressive discipline.
The last three causes are even more serious, as they risk the health, safety, and reputation of your employees, customers, and overall business. These situations often call for immediate termination.
Employees fired for causes like those listed above are typically not eligible for unemployment.
Can You Fire Someone for No Reason?
Most states recognize employment at-will, meaning both employers and employees can end employment at any time, without cause or notice.
Employment at-will typically doesn’t apply to employment contracts, which define specific terms and conditions that both employers and employees must meet before terminating the relationship.
Some states have additional exceptions to the at-will agreement. Both New Hampshire and Massachusetts are at-will employment states. To learn more about your state’s at-will employment, visit your local Department of Labor site.
This is when both the employer and employee agree to end the working relationship. Examples include the end of a contract or retirement.
Sometimes, mutual termination can come in the form of a forced resignation. Typically, the employee agrees to step down in exchange for some kind of compensation or assistance. For example, the company may offer a severance package that would not be provided if the employee were fired. Another example would be allowing the employee to maintain their business contact information (phone and email) even though they’re no longer on the payroll. This way, it appears they are still employed while they job search.
Those who leave under a mutual termination agreement are generally ineligible for unemployment benefits.
Before Firing an Employee
When working with a problem employee, it’s important for employers to do what they can to improve the working relationship. This should include disciplinary action, coaching, and performance feedback over a set period of time.
One thing we can’t stress enough: Document everything!
Just because you can fire an employee without cause does not mean you should. These days, it is very easy for anyone to sue anyone for any reason. The best course of action is for employers to take the proper steps and keep documentation so that they can defend themselves against potential employment discrimination charges.
If you think an employee is capable of improving their performance, encourage them with guidance and support. You might even consider creating a performance improvement plan (PIP), which involves setting measurable goals and improvement requirements.
This usually requires significant work and meetings, so we recommend only using a PIP if you are fully confident that the employee is willing and able to improve.
Regardless of how you track the employee’s improvement, record their progress. This will help the employee know how they are doing and can protect you down the road.
Unless the employee’s behavior has been egregious, termination should not occur without warning.
How to Fire Someone
So you’ve taken the steps above, given the employee coaching and opportunities for improvement, but it’s simply not the right fit. It’s time for the tough conversation.
Have a termination policy and process in place so that you can be prepared to rip off the Band-Aid. It will never be easy, but knowing exactly what you need to do and say will ensure your company is protected and the employee is able to walk out with their dignity.
Prepare Notes & a Checklist
Firing an employee is stressful and you can never truly anticipate how the conversation will go. Before you go into the meeting, outline exactly what you intend to say to stay on track.
Let the individual know what will happen next regarding their pay, benefits, unemployment, unused vacation time, references, etc. Request that they return or leave any company property. If their role required a lot of equipment, special software, or important files, make sure they leave it all in the office.
Never fire someone via electronic methods. This means no phone calls, texts, emails, or even letters. Always give them the courtesy of an in-person meeting. If possible, schedule the termination at the end of the day when most people will be leaving the office. This way you can ensure as much privacy as possible.
Every person deserves this much respect. You will also send the right message to your other employees.
Bring in a Witness
Bring another employee to the termination meeting (ideally, an HR person) as a witness. This can protect you in the case of an employee termination lawsuit.
Additionally, an HR professional can help guide the conversation if it becomes difficult and the hiring manager needs support. The HR representative can ensure everyone is treated fairly and reduces liability on the company.
Be Direct and Break the Bad News
When the meeting actually starts, don’t draw out the conversation. Get right to the point and tell the staff member that their employment has been terminated.
Make it clear the decision is already made and final. Don’t use language like “You will be terminated,” which could give the impression that there is still a chance to change the decision.
Reference prior discussions you’ve had about the employee’s issues and summarize the situation. Don’t go into great detail or place blame, as this could lead you down a rabbit hole and spark more arguments.
If you use too much detail, you may not be able to use any information you discover later in a subsequent lawsuit. You’ll always find something later, whether it’s important paperwork that the employee never filed or inventory that was never accounted for.
Listen to the Employee
Truly listening and understanding the employee’s reaction will help you respond appropriately.
According to the Grote Consulting Corporation, there are four primary emotions people experience after being fired and certain ways to handle each one:
- Shock: Acknowledge the emotion without debating or defending your decision. Repeat the message.
- Denial: Make sure the individual has heard and understood the message. Continue to repeat the message as necessary.
- Anger: Acknowledge the anger but don’t debate the employee’s merits or defend your decision. Remain firm.
- Grief: Acknowledge the emotion, then keep the conversation moving. Focus on their future.
End on a Respectful Note
Thank the employee for their contributions, then accompany them to their desk to collect their belongings if appropriate.
If the employee is upset or emotional, make arrangements for them to come in after work or on a weekend to pick up their things. You can also offer to send their things to them. This will ensure they don’t encounter their colleagues and allows you to confirm that important paperwork, files, and other items are all there.
Finally, walk the former employee out, shake their hand, and wish them the best.
Shut Down Their Access & Accounts
Since you don’t know how the employee will react, be sure to remove their access to electronic systems like email, the company database, intranet, customer contact portals, etc. Do this as soon as possible, whether during the termination meeting, slightly before, or immediately after.
This may require coordinating with your IT staff. Removing access to any digital accounts can prevent negative interactions or loss of electronic files.
Managing Employee Terminations Successfully
When you have a poorly performing employee, the first step is to take action. Don’t wait around hoping the situation will rectify itself or the employee will eventually leave on their own accord. And keep records of all efforts you take regarding disciplinary actions.
No matter the reason for termination, maintain an attitude of respect and make it a priority to protect the employee’s dignity. This is the best way to protect your company and its reputation.
If you need help creating or refining your termination process and policy, or if you’re looking to bring an HR consultant into the fold for those difficult conversations, BlueLion’s experts are here to help. We will make sure your business is prepared for all termination situations. Contact us at 603-818-4131 or [email protected] today to learn more!