Posted on: Wednesday, April 12, 2006
Firing is tough, but do it right
By Rhonda Abrams
Without a doubt, the hardest thing to do as a business owner is to terminate an employee. I've had to fire or lay off people many times in the course of my career, and I can tell you it's never easy.
It's important you consult your attorney well in advance of letting someone go to make sure you're following all applicable laws and don't open yourself up to a wrongful termination lawsuit.
You also want to proceed in a decent and considerate manner. It's not only the ethical thing to do, but it lessens the likelihood that an employee will file a lawsuit and helps maintain morale with remaining employees.
Terminating an employee should never be an impulsive act. You can take steps to avoid having to fire someone at all or to reduce the negative impact when you have to let someone go.
Long before an employee gets in trouble:
Hire well: One of my rules is "Hire for attitude, train for skill." A sure way to get in trouble is to hire quickly just to fill a position.
Clearly delineate job responsibilities and expectations: Employees need to know exactly what tasks they're expected to perform. Establish quality and time standards.
Train: Workers can't succeed if they're not trained properly.
Acknowledge and reward: Let people know when they're performing well so you reinforce that behavior.
When an employee starts getting in trouble:
Provide specific feedback: Clearly tell employees exactly what they are doing wrong and what you expect them to change. Troubled employees may need more guidance than they're getting to improve performance.
Determine if there are other contributing factors: Are in-office issues hindering an employee's ability to do a job, such as a lack of resources or conflicts with other employees? Or is the employee experiencing personal problems out of the office? Perhaps assistance or time off is needed.
Create a written record: Written performance reviews, directives or reprimands lessen the chance of misunderstandings. And in the event of a lawsuit, you'll be able to show you gave specific and repeated warnings to a terminated employee.
When you terminate an employee:
Be very clear: Use language that leaves no doubt that the employee is being terminated.
Let the employee talk: Give the person a chance to respond, regardless of how uncomfortable it is for you.
Give severance pay: Providing severance pay slightly softens the blow and is the decent way to behave. A good guideline is two weeks' pay plus one additional week's pay for every year of service.
Ask the person to sign an agreement waiving the right to sue for wrongful termination: Consult your attorney. You may be allowed to make signing such an agreement a condition of the employee's receiving severance pay.
Immediately pay for any earned time: In addition to any severance, you're responsible for any earned overtime and earned but unused vacation time.
Have the person leave that day: It's unfair and uncomfortable for a terminated employee to continue to come to work. That would lower staff morale, and the possibility always exists that the person could do damage to your company.
Inform the person of any benefits: Employees will be grateful to learn about any benefits they're entitled to, such as unemployment payments or the ability to continue their medical insurance.
Take appropriate protective steps: Immediately change passwords for any computer programs the employee had access to. Retrieve any keys they may have to premises.
Finally, don't gossip. In a small business, other employees may talk, but you — as the boss — must not engage in petty character assassination. Terminating an employee is a difficult business choice. Treat it with the dignity it deserves.
Rhonda Abrams writes books for entrepreneurs.
