Dealing Effectively with Employee Terminations

One of the most challenging workforce issues managers must deal with is employee terminations. No matter your experience, when terminating employees based on performance issues or other causes, the risk of increased tempers, stress levels, and emotions can escalate significantly.

There is also the potential for lawsuits and legal fees if terminations are mishandled. Following the proper guidelines — including being consistent, keeping everything job-related, and using professional communication and confrontation techniques — will help you minimize challenges and risks associated with employee terminations.

Causes for Termination

Termination for cause results from a blatant, direct violation of a company policy such as theft, fighting, time card fraud, harassment, insubordination, or other issue that goes against written company requirements.

Termination for Performance  

A termination for performance is based on an employee’s inability to meet defined performance expectations, goals, and metrics. Employee performance should be based on these Key Performance Indicators (KPIs) to help determine which employees meet performance requirements.

In either situation, knowing when to terminate and how to conduct a termination meeting requires a defined process. Before you get to the step of termination, it is important to communicate clearly.

• Communicate expectations for employee performance upfront
• Track, document, and communicate performance and policy violations promptly
• Create and consistently follow corrective action and termination guidelines
• Be prepared for the termination meeting….and Be Respectful!

Keeping communication open and showing all efforts to correct behaviors is your best defense to protect yourself against legal issues after an employee termination is completed.

Communicate Performance and Behavior Expectations

It is essential to have a well-written employee handbook that documents company expectations regarding important policies, workplace rules, and conduct. From there, managers need to further inform employees of job requirements and expectations through written job descriptions, one-on-one meetings, and job training.

Managers need to establish clear, written goals for each employee. It’s also essential to map out an initial job training plan and to communicate the appropriate method of giving ongoing feedback.

The ability to coach effectively and give immediate and precise feedback, whether above or below expectations, is key to managing performance expectations.

Track and Document Performance

A well-planned performance management system helps to establish a method to track and document performance expectations. For positions with specific metrics, using systems that measure these metrics will help keep up with employee performance.

Positions with no straightforward, tangible metrics may use competencies and goals to define expectations, comparing performance against results and behaviors.

Whatever your needs for performance tracking, the key is to have some means of comparing and measuring expected performance to actual results and behaviors.

Formal Documentation may be a company-wide annual performance review program or using established forms such as a Performance Improvement Plan or Corrective Action Plan.

Informal Documentation may include a manager’s notes after a one-on-one meeting or training, a follow-up email to an employee with a recap from a feedback session, or even notes in a calendar.

Both formal and informal documentation help to defend discharge decisions, appeal unreasonable or untruthful unemployment claims and provide information to help you make the right choice at the right time.

Corrective Action & Termination Guidelines

Corrective action such as discipline or termination may be necessary depending on the severity of an employee’s actions or insufficient ongoing performance levels. This is when established guidelines come into play, so management and Human Resources can make informed decisions.

Corrective action and termination guidelines help to ensure consistency, fairness, and legal compliance. These guidelines are best defined as part of a leader guide or toolkit. Corrective action guidelines generally involve elements that include:

Progressive coaching steps for improved performance

• Processes for reviewing KPIs and providing guidance on concern areas
• Documentation of discharge requirements and process, such as a termination checklist

A list of situations that may result in immediate termination such as theft, fighting, drug/alcohol use at work, etc.

*take some caution in immediate, “on-the-spot” dismissals

• A clear understanding of the termination meeting, including script review, exit interview, final paycheck, and benefit procedures.

Before a final decision is made, make sure to review all Documentation and work with Human Resources to address the following essential questions:

Was a thorough investigation conducted?

• Has all relevant past and current Documentation been gathered and reviewed?
• How has the company handled this type of situation in the past? Be consistent!
• Is the affected employee in a protected class? If yes, make sure there is no discrimination tied to the termination decision.
• Could this termination be a violation of any state or federal laws? Work with Human Resources, or, if necessary, work with your company attorney.
• How will we handle the termination meeting? When? Who?

Having steps clearly defined ensures that your company will meet all regulations and reduce your legal risk when it comes to employee terminations.

Prepare for the Termination Meeting and Keep it Respectful!

Once the final decision has been made to terminate an employee, make plans with the appropriate management and human resource staff member(s) for a date, time, and private meeting location.

It is advised to go over a script for the meeting in advance to prepare for all potential outcomes. Make sure all termination items are addressed, such as a final paycheck, protection of systems/data and equipment, a list of items you will need from the employee, and, if applicable, a written separation agreement. Separation agreements are usually only needed when severance pay is being given or as a technique for preventing a volatile individual from presenting a future lawsuit.

The termination meeting should be short, to the point, and direct but should also be respectful. In a calm voice, tell the employee the reason for the termination and the requirements for their last day.

Provide just enough information so that the employee will understand the essence of the decision. In most cases, if the employee termination process is followed, the decision should not come as a surprise.

Avoid the temptation to get defensive, apologize, or react with negative comments. Allow the employee to vent if needed yet control the discussion by leading back to the practical aspects of the termination. As soon as possible during the meeting, move the discussion to their final paycheck, how benefits will be handled, and what the company needs back from them (e.g., badge, keys, laptop, etc.).

Throughout the meeting, treat the employee with respect and dignity; it is ok to be empathic or understanding, but stay focused on the intent of the meeting and make sure they understand the decision is final. Conducting a termination for cause or performance, while stressful and sensitive, can be done professionally without escalating into a negative situation.

Developing Effective HR Strategies

Maintaining employee terminations with fewer risks is just one of the many important aspects of an effective HR infrastructure. You want to make sure all policies and procedures meet the appropriate regulations to avoid costly mistakes.

If you need help ensuring that your HR strategies truly meet your needs, HR Service, Inc. can help. Learn more about our HR solutions and tools available to make your business run smoothly.

By: Ken Spencer, President, and Kay Gillespie, Human Resource Business Partner, HR Service, Inc. (edited by Penny Clark 2023)

All Documentation is the Copyright of HR Service, Inc. 2020 and is used by permission only.