From the outside, it seems like it should be easy to identify and fire the “bad” employees in your business. But as any experienced entrepreneur, business owner, or manager could tell you, it’s not always that simple. While it may make sense for your business, terminating someone’s employment can be a very difficult thing to do, both emotionally and legally. However, there are often sound business and ethical reasons for terminating someone’s employment and times when it is best for all involved to do so.
Most business books will tell you that hiring the right people is one of the first steps toward building a great enterprise. The corollary is that it is just as important to get the wrong people out of your business. Having the wrong people stick around in your business can often cost you (and them) more time, money, and heartache than it would to terminate their employment.
So, if you must fire someone, you should know that there are good and bad ways to go about it. Terminating employees the wrong way, even if you do so for the right reasons, can be prohibitively costly.
Following the guidelines below will help you deal with termination issues in an ethical and legal manner.
Avoid Hiring the Wrong People
It may seem almost too simple, but it needs to be said. A good hiring process helps employers avoid many problems and terminations in the future. Regardless of the size of your business, a strong hiring process usually includes:
- An application process that legally requests all the appropriate information and background checks suitable to your business needs
- Interviewers trained to ask the right questions and trained NOT to ask illegal questions
- A review process that allows input from all persons that should have a say in hiring decisions
- Clear expectations of performance and conduct provided to the applicant
For more information about how to do hiring right, click here.
Let Your People Know the Rules
It is much easier for employees and managers to prevent problems when they know what is expected of them. A well-managed business will:
- Establish appropriate employee policies, including performance criteria, evaluation procedures and standards of conduct
- Publicize the policies to employees through handbooks, posters, meetings, and training
- Regularly review its policies and make changes required by law or business needs
Follow Your Own Rules
One of the most difficult guidelines for many businesses is to actually follow all the rules they create. However, making sure you follow your rules consistently is one of the best things you can do to avoid employee termination problems. You should always:
- Ensure that employee personnel files are kept up to date
- Give ACCURATE and REGULAR written performance appraisals
- Quickly and thoroughly investigate and DOCUMENT employment issues
- Take action when required by your rules or otherwise needed
- Treat all employees EQUALLY and CONSISTENTLY
For more information about what to do and what not to do in managing these pesky HR issues, click here.
Be Prepared and Respectful
When you do have to actually terminate someone’s employment, it is very important to make sure that the termination is legally appropriate and handled in a respectful manner. You should make sure that your managers:
- Ensure that all necessary documentation is in the personnel file, especially if the employee is being terminated for poor performance or misconduct
- Ensure that the grounds for termination do not violate company policies or applicable laws
- Determine if a severance package or termination agreement of any kind is appropriate
- When informing the employee:
- Meet with the employee away from other employees
- Focus on the facts, not the personalities
- Be concise and stay on point
- Do not argue or get emotional
- Be compassionate to the employee regarding the event of termination, but not necessarily with any violations that led to it
- Have a witness in the meeting and document the termination
- If necessary, have security measures in place to protect the business assets and the other employees
- Follow up on all post-termination issues, such as payment of wages owed, COBRA compliance, exit interviews, or necessary document filing.
As always, there is a lot more to dealing with employees and employment terminations than I can put in this article. For more information, I recommend you read our short series on termination meetings. After that, contact us. The employment lawyers at Venn Law Group can help you reduce the risks of costly claims for discrimination, harassment, and wrongful terminations. Establishing and following good employment policies will increase the productivity and morale of your employees and you, as well as the value of your business.
Edward B. Woodall is an attorney at Venn Law Group who works incorporate law and commercial real estate, including leasing, financing, taxation, business structures, and dispute resolution. He is passionate about helping business owners solve a variety of complex legal problems, and has performed more than 100 hours of pro bono work. In addition to his law degree, he also has a background in history and Spanish.
