The Right Way to Terminate Someone Legally and Ethically
Most small business owners struggle with at least one aspect of the job, like understanding their financials, providing excellent customer service, or effectively managing employees, but how to fire an employee may be the most sensitive issue. Terminating an employee can be incredibly stressful and guilt-inducing, and as a result, too many entrepreneurs clumsily trip through the entire situation, or even worse, avoid it entirely.
We don’t expect you to like to fire people, in fact, it’s probably best that you don’t. As a small business owner, your employees can become part of your life and friendships will inevitably form. However, you need to remember that everyone is there to do a job, but if they’re not performing and your company is suffering as a result, then you need to make some hard decisions.
Ideally, you won’t need to worry about this too often if you’re hiring wisely and are regularly communicating policy and expectations to your staff, but as your business grows you’ll likely have to let at least one employee go. When that situation does arise, here are some ways you can make the process as painless and transparent as possible, while also protecting your company from a wrongful termination lawsuit down the road.
Before You Fire
Firing should be a last resort and not a casual impulse if someone crosses you. Hiring and training new employees is dramatically more expensive than retaining current ones, so the hope should always be to keep turnover as low as possible. Before you jump to firing an employee, you’ll want to do a few things to try to both avoid termination, and also protect yourself if you do need to let them go.
Get HR involved
Before making any official moves talk to your HR rep to confirm legalities and procedure. They will also be your guide to give you answers to any questions the employee may have if you do have to terminate. In addition, they’ll help you with any information you would need to give the employee about their final paycheck and any severance or unemployment benefits they might be eligible for.
Give appropriate warnings
If their issues are performance-based then have a frank discussion with them about it. Consider giving them a performance improvement plan (PIP) in which you give them explicit goals that you need them to hit by a certain date, ideally around a month later. Very often this scare is enough to turn an employee around. Obviously, with any major policy violations or illegal activities, you can skip the warnings.
Document, document, document
Keep records of anything you feel could be pertinent if the employee later tried to sue. So any written communication (especially in which you clearly state the objectives and expectations), timesheets, and signed contracts could prove helpful.
Don’t wait too long
Though you shouldn’t rush in and fire employees based on emotion, you also shouldn’t let a poor employee linger in your business. In that time, they could be losing sales based upon poor performance or lowering the morale of your harder working employees. Top talent will leave and employees with bad attitudes or poor performance will continue to poison the well.
When you Fire
Once you’ve done your due diligence with planning for legal worries and attempting to have them improve with your guidance, it’s finally time. Firing someone can be deeply unpleasant, but you need to remain completely in control and professional during the entire process.
Sit down with them face-to-face
As hard as this may be for you, it’s worse for them. Give them enough respect to look into their eyes while telling them the bad news.
Bring in a witness
Have your HR rep, top employee, or even a business lawyer sit in during the firing. Having a reputable and trusted person who is able to verify the sequence of events will be greatly beneficial if the terminated employee is litigious. And, of course, if you fear they could become violent, call security or even the police to assist.
Keep it short and (not so) sweet…
Actually having to tell someone that they’ve been let go is gut wrenching, especially if you’re close to them, but beating around the bush won’t help matters. You should cut straight to the point, calmly let them know it’s for cause, but don’t go into more detail than you have to.
Also, don’t respond too much if they become upset. Being fired is a result of poor performance. You can tell them that you’re sorry it’s come to this, but you don’t need to apologize for them not upholding their obligations. After you give them the news, you should give them all your prepared information regarding final pay and benefits that you collected earlier.
…but be compassionate
Yes, you need to rip that band-aid off, but you don’t need to lose your empathy and humanity in the process. Have tissues at the ready and give any kind words or support you feel are appropriate. This could mean making suggestions for their next step or offering to make industry connections if you feel like they might be a better fit in a different position or even in just a different company culture. In situations like layoffs, employers may want to offer references to departing employees.
Let them keep their dignity
Always have the conversation in a private area and walk them out calmly. You don’t need to humiliate them on what is already an extremely difficult day.
After You Fire
Small businesses will be particularly hit hard when an employee is let go, and even if they don’t see it happen, all the other employees are bound to find out quickly and start speculating. So, before the rumor mill can start churning, address the topic head on.
Just like when you fire your employee, you simply need to cut to the chase in this situation. Remain professional, let them know what happened, but keep specifics minimal. Employees will no doubt be anxious about their job security, so take the time to assuage any fears and reiterate that the former employee was terminated for cause.
Give them their next steps
This will often mean delegating duties until a replacement can be found, but also reinforcing any expectations that you have of them. A breakdown in communication is often a large factor in poor performance, so you need to do your part to ensure this situation doesn’t happen again.
While never pleasant, firing an employee is often a necessary evil in the life of a business owner or manager. But if you do it right, you can strengthen morale, improve your leadership skills, and help your business grow.
Are you in the pet business and need personalized assistance to improve some of your least favorite parts of leadership? Contact me today for the guidance you need to take your company to the next level.