It's never easy to let go of a worker, especially one who has devoted time and hard work to your company. But the unpleasant reality of running a business is that sometimes, people must be fired. Prolonging the process only leads to further issues that can stunt your company's growth.
Terminating an employee is complex, and going about it the wrong way may result in an angry former staff member at best, and a hefty lawsuit at worst. Here's how to go about this difficult process properly, from both a legal and a professional standpoint.
Before the meeting
Firing an employee is never as simple as saying, "You're fired." Proper termination is not a rash, spur-of-the-moment decision, but a well-documented process that must prove that you, as the employer, are justified in your actions. Otherwise, you're inviting the potential for a wrongful termination lawsuit.
"Throughout the entire termination process, HR leaders need to work with the employee's manager on properly documenting instances of performance and/or behavioral discussions," said Deb LaMere, vice president of employee engagement at Ceridian, a human capital management technology company. "When it comes to terminating an employee for performance reasons, having those facts documented and vetted by the organization's legal department or a contracted attorney will not only make the process easier, it will also help validate the reason for terminating the employee, in the first place."
Employees should not be surprised at a notice of termination. LaMere recommends sharing feedback with employees on a regular basis to ensure you are on the same page.
"Having regular performance discussions — especially when performance needs improving — acts as a warning," she said. "If managers are not having these types of constant conversations about performance and areas in need of improvement, the employee will be surprised and they may end up feeling that they have been discriminated against and terminated without any kind of valid reason."
The situation can be a little trickier if an employee is being let go as part of a downsizing initiative. Kathie Caminiti, a partner at labor and employment law firm Fisher & Phillips LLP, said that documentation is necessary to justify not only the reduction in staff, but how you determined which employees got cut. [See Related Story: Should You Fire That Employee? 4 Questions to Ask]
"With a downsizing or reduction ... what is the business justification and what is the selection criteria for the person to be terminated?" Caminiti said. "If you're letting go of three people, the next question is, why those three people as opposed to [other employees]? That's where companies get into trouble."
To make sure you've covered your bases, Caminiti advised asking yourself these five important questions when preparing for a termination meeting:
- What is the reason for the discharge and what documentation exists to support that decision?
- What is the employee's background and history with the company? (Consider age, gender, protected class under EEOC laws, union versus nonunion, whether employee has made complaints against company, etc.)
- Am I treating all other employees the same? (i.e., if the employee is being fired for violation of policy, would any other employee also be fired for the same violation?)
- Is this termination achieving business objectives?
- Am I following my own employer policies and procedures for discipline?
Breaking the news
As difficult as it may be to prepare for an employee's termination, the actual firing part will always be the hardest step in the process. Caminiti reminded employers that, while letting someone go does affect your remaining staff and their morale, the decision has an immediate financial and emotional impact on the person fired and his or her family. Therefore, the situation must be handled with the appropriate sensitivity and tact.
The employee you're terminating is likely going to be upset and have some questions for you once you deliver the news. Caminiti said you should anticipate this, and be ready to answer any questions posed in a respectful and succinct manner — don't drag it out, or you might say something that could land you in hot water.
"How a person is terminated often influences whether they file a lawsuit," Caminiti said. "If people feel treated with dignity and respect, they're less likely to file a lawsuit.
LaMere said that role-playing the termination will help prepare managers for the actual process. This way, they will be ready to answer any questions and handle the situation in a sincere, professional manner while avoiding a potential lawsuit.
"When terminating an employee, it is important to be straightforward, sure of your facts and to the point," LaMere said. "A conversation about termination should take no more than 10 minutes. Above all, avoid the personal. Practice beforehand and always show empathy and respect in your choice of words and actions."
Once the employee has learned of his or her termination, your job as the employer is to make sure that person is able to make a clean transition out of your company. This includes collecting any company-issued property like phones, laptops or keys, revoking any software permissions and passwords, and having all the necessary paperwork ready to go after the meeting.
Caminiti said it's very important to make sure an employee's final notices — COBRA information, final pay, benefits administration, nondisclosure agreements, etc. — are completed, filed and issued correctly. This provides you with a proper paper trail should any problems arise after his or her last day.
In an article on Entrepreneur.com, author John Boitnott said that if you're offering the employee a severance package, it is best to have a human resources representative or office manager sit in on the meeting to handle the paperwork right then and there. This will help the employee shift his or her focus to logistics rather than the firing. Severance pay can also help to minimize potential backlash from the terminated employee, Boitnott said.
Before the employee leaves the office for the last time, be sure to provide him or her with the proper company contact to assist with any follow-up questions regarding pay and benefits.
While you should consult with an employment law and/or human resources professional before moving forward with an employee termination, here are a few resources to help you prepare for the process:
- "Employment Ending Checklist" (About.com)
- "Fire Well: How to Avoid Wrongful Termination and Employment Discrimination Lawsuits" (Forbes)
- "The Best Way to Fire an Employee" (Inc)
- "What to Say When You Fire an Employee" (Nolo)
Additional reporting by Nicole Fallon Taylor. Some source interviews were conducted for a previous version of this article.