The decision to terminate anemployee is never easy and is usually a last-resort measure. But unfortunately,termination may be inevitable. To avoid legal problems down the road, youshould establish a set approach to employee management that includes proceduresfor firing an employee. The following six steps can help you effectively handleterminations.
First: Document
Set out reasonableexpectations from the beginning. When a new employee first starts, provide themwith a job description that clearly defines their responsibilities. They shouldalso receive a copy of the company’s discipline policy and code of conduct, ifyou have one. By providing this information up front, you can establish aframework to evaluate the employee’s performance and provide discipline ifnecessary.
Conduct regularly scheduledperformance evaluations. The employee’s orientation should also set a timeframefor a performance review. Keep hard copies of all performance reviews in theemployee’s personnel file. Reviews should not be inflated or inaccurate, andshould give the employee an opportunity to improve if necessary.
Enforce company policiesconsistently. Whether or not your business has a written manual for companypolices, establishing a pattern is crucial. Be sure to retain written copies ofwarnings and violations in the employee’s personnel file. Finally, whatever thecompany’s discipline policy is, apply it to each employee the same way. These stepsshow a pattern of fairness and willingness to work with employees beforeturning to termination.
Second: Address LegalMatters
Consult an employmentattorney. Since employment laws can vary from state to state, the advice of agood attorney can help you to avoid a legal entanglement. It is important toconsult them before – and not after – the termination.
Prepare for a discriminationdefense. A well-documented history of non-performance can show that thedecision was made for legitimate job-related reasons and not based on theemployee’s protected class status such as age, sex, race, religion ordisability.
Third: Plan Ahead
Prepare for everythingbefore the termination meeting. It is important that the employee fullyunderstands why they are being terminated; therefore, it is a good idea torehearse the meeting beforehand. Prepare by reviewing the employee’s file andwriting out the specific key points and facts that are pertinent to thesituation.
If appropriate, draft atermination agreement for the employee. This agreement should state theeffective date. It should also inform the employee about their final paycheck,accrued time off and the status of their benefits. Some states require thefinal paycheck and payment for accrued paid time off to be delivered at thetime of termination. If the employee subscribed to health insurance, providethem with COBRA (post-employment insurance) options. For employeesparticipating in 401k plans, provide either a completed disbursement/roll-overform to sign at the meeting or the contact information of the planadministrator.
Fourth: Evaluate SecurityConcerns
Compose a list of companyproperty and access to files. Determine what company property the employee hasand any files they can access. If necessary, change the passwords to essentialfiles and programs. If the employee was privy to trade secrets or otherconfidential information, consult an attorney about non-compete andnon-disclosure covenants.
Fifth: Conduct the Meeting
Schedule the meeting at anappropriate time. It is best to schedule the meeting for either early in themorning or late in the afternoon. Also, if possible avoid terminations aroundmajor holidays or birthdays. Most importantly, schedule a third party to bepresent at the meeting to serve as a witness and take notes.
Stick to the facts. Thetermination is a business arrangement and must be handled professionally andpromptly. Inform the employee about the reasons for the termination, stickingto the facts that were prepared beforehand. Treat the employee with dignity.While it is acceptable to answer some questions from the employee, do notengage in a debate. Emphasize that the decision is final.
Wrap up. Make sure theemployee returns all company property and signs all of the necessary paperwork.Place a copy of the meeting notes and the termination agreement in theemployee’s personnel file. Allow the employee time to gather personalbelongings.
Sixth: Post Termination
Handle references carefully.When giving references for terminated employees, it is acceptable to provideonly the dates of hire and termination, position and salary. A carefulreference can prevent accusations of defamation.
Confidentiality is key.Terminating an employee can spark rumors, so inform other employees formallyand factually, but avoid questions regarding the details. Additionally, vendorsand suppliers who were in contact with the employee should be informed in asimilar fashion.
– Courtesy of the NationalFederation of Independent Businesses. For more information on this topic, visitwww.nfib.com.
