The Right Way to Fire An Employee

Posted on March 9, 2020 in Business Transactions, Disputes

Need to terminate? Take these five steps first.

They say that “breaking up is hard to do,” and that certainly applies to giving an employee the heave-ho. Few business owners relish the conflict, the guilt and the fear of reprisal that often accompany the act of firing an employee. But sometimes you reach the point where you simply can’t justify continuing to employ a particular worker. Maybe she can’t seem to get the job done. Or maybe you’ve found him with his hand in the company till. Either way, you need to have the dreaded “termination conversation.”

The keys to doing this well? Prepare in advance and document carefully. Here are five steps to help you navigate employee firings successfully:

  1. Try to avoid termination altogether. Many small-business owners get so wrapped up in the day-to-day operation of their business they forget to nurture and guide their employees. Feedback and performance targets give employees clear guidelines and expectations for what they need to do to keep their jobs. Nipping problems in the bud–rather than sticking your head in the sand hoping they’ll go away–helps ensure that the firing doesn’t come at the end of a volcanic explosion. Consider providing training or mentoring so employees have a viable opportunity to succeed.
  2. Keep tabs on targets. Employees may not “get it right” the first time, but you don’t want to be teaching the same lessons 10 or 20 times. Give employees a reasonable period of time to get into the groove. If they can’t (or won’t), it’s time to say goodbye. You have larger concerns–like business productivity and work force morale–to contend with.
  3. Call in the experts. Federal, state and local employment laws are a veritable minefield for small-business owners. You’ll want to be able to prove that you fired the employee for good business reasons and that you handled the situation in a nondiscriminatory fashion. As the specter of long-term unemployment looms, employees bring lawsuits in the hope they will coax a more lucrative settlement out of their employers. They’re frightened that, once fired, they’ll have great difficulty finding another job with similar pay and benefits. Therefore, you want to be extra careful if you’re firing employees in connection with a “reduction in force,” or overall downsizing of your company. It may seem wise to let go of more senior, higher-paid staff; but if they’re older, too, you could be violating age-discrimination laws. Let your human resources and legal advisors help you put the right procedures in place so this becomes a relative “no-brainer.”
  4. Don’t “wing it” when firing. Every word that comes out of your mouth could provide a hook for hanging yourself if you speak out of turn. You want to avoid the “it’s not you, it’s me” kind of babbling (as often happens with a breakup). Consider role-playing exercises or rehearsing in advance with your human resources/legal team. Choose your location wisely, too. The middle of a well-trafficked hallway will not provide you with the discretion and privacy you want in this situation.
  5. Talk about “next steps.” For employees, getting fired is like being pushed off a cliff without a parachute (or bungee cord). They’re at a loss and often may be speechless (although they should have seen this coming if you’ve worked through steps 1 and 2 with them without positive results). Know your policies and procedures concerning last paychecks, COBRA coverage and returning company property. Then get them out of there as soon as possible. You can be gracious about it, but you don’t want disgruntled (now ex-) employees pilfering your Palm Pilot or poisoning the rest of the work force.

Firing employees tests your mettle as a business owner in a way few other experiences do. But if you deal with the situation promptly and fairly, you can reap even greater rewards: gaining the respect and trust of your remaining employees, and establishing a culture of leadership and accountability.

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