The decision to terminate an
employee is never easy and is usually a last-resort measure. But unfortunately,
termination may be inevitable. To avoid legal problems down the road, you
should establish a set approach to employee management that includes procedures
for firing an employee. The following six steps can help you effectively handle
terminations.
First: Document
Set out reasonable
expectations from the beginning. When a new employee first starts, provide them
with a job description that clearly defines their responsibilities. They should
also receive a copy of the company’s discipline policy and code of conduct, if
you have one. By providing this information up front, you can establish a
framework to evaluate the employee’s performance and provide discipline if
necessary.
Conduct regularly scheduled
performance evaluations. The employee’s orientation should also set a timeframe
for a performance review. Keep hard copies of all performance reviews in the
employee’s personnel file. Reviews should not be inflated or inaccurate, and
should give the employee an opportunity to improve if necessary.
Enforce company policies
consistently. Whether or not your business has a written manual for company
polices, establishing a pattern is crucial. Be sure to retain written copies of
warnings and violations in the employee’s personnel file. Finally, whatever the
company’s discipline policy is, apply it to each employee the same way. These steps
show a pattern of fairness and willingness to work with employees before
turning to termination.
Second: Address Legal
Matters
Consult an employment
attorney. Since employment laws can vary from state to state, the advice of a
good attorney can help you to avoid a legal entanglement. It is important to
consult them before – and not after – the termination.
Prepare for a discrimination
defense. A well-documented history of non-performance can show that the
decision was made for legitimate job-related reasons and not based on the
employee’s protected class status such as age, sex, race, religion or
disability.
Third: Plan Ahead
Prepare for everything
before the termination meeting. It is important that the employee fully
understands why they are being terminated; therefore, it is a good idea to
rehearse the meeting beforehand. Prepare by reviewing the employee’s file and
writing out the specific key points and facts that are pertinent to the
situation.
If appropriate, draft a
termination agreement for the employee. This agreement should state the
effective date. It should also inform the employee about their final paycheck,
accrued time off and the status of their benefits. Some states require the
final paycheck and payment for accrued paid time off to be delivered at the
time of termination. If the employee subscribed to health insurance, provide
them with COBRA (post-employment insurance) options. For employees
participating in 401k plans, provide either a completed disbursement/roll-over
form to sign at the meeting or the contact information of the plan
administrator.
Fourth: Evaluate Security
Concerns
Compose a list of company
property and access to files. Determine what company property the employee has
and any files they can access. If necessary, change the passwords to essential
files and programs. If the employee was privy to trade secrets or other
confidential information, consult an attorney about non-compete and
non-disclosure covenants.
Fifth: Conduct the Meeting
Schedule the meeting at an
appropriate time. It is best to schedule the meeting for either early in the
morning or late in the afternoon. Also, if possible avoid terminations around
major holidays or birthdays. Most importantly, schedule a third party to be
present at the meeting to serve as a witness and take notes.
Stick to the facts. The
termination is a business arrangement and must be handled professionally and
promptly. Inform the employee about the reasons for the termination, sticking
to the facts that were prepared beforehand. Treat the employee with dignity.
While it is acceptable to answer some questions from the employee, do not
engage in a debate. Emphasize that the decision is final.
Wrap up. Make sure the
employee returns all company property and signs all of the necessary paperwork.
Place a copy of the meeting notes and the termination agreement in the
employee’s personnel file. Allow the employee time to gather personal
belongings.
Sixth: Post Termination
Handle references carefully.
When giving references for terminated employees, it is acceptable to provide
only the dates of hire and termination, position and salary. A careful
reference can prevent accusations of defamation.
Confidentiality is key.
Terminating an employee can spark rumors, so inform other employees formally
and factually, but avoid questions regarding the details. Additionally, vendors
and suppliers who were in contact with the employee should be informed in a
similar fashion.
– Courtesy of the National
Federation of Independent Businesses. For more information on this topic, visit
www.nfib.com.