How to Terminate an Employee

Q. I've reached the difficult decision that I need to terminate one of my employees. What is the best way to handle this?

A. Terminating an employee is a big decision and never easy for either party. When making a decision to dismiss an employee, we suggest the following three steps:

1. Make sure that you gave the employee the opportunity to succeed. Ask yourself . . .

1. Did I carefully and specifically explain my expectations to the employee and check that the expectations were understood?

2. Did I remove any roadblocks, internal to the company, which might have kept the employee from succeeding?

3. Did I give the employee sufficient training and enough time to acquire and practice necessary skills?

4. Did I motivate the employee to succeed including giving positive and negative feedback as appropriate?

If you can answer yes to these questions and the employee is still underperforming, it may be time to make a change.

2. Make sure that you protect your organization. Virginia, like many states is “at will.” This means that you can terminate an employee for any reason or no reason at all. However, there are exceptions to this doctrine. Most of these have to do with terminations for discriminatory reasons. If you are not sure, speak to a qualified attorney or HR specialist.

No actions will guarantee that your unemployment tax rate won’t increase or that you will not suffer a lawsuit, but you can help to protect your organization from these costs by documenting the events leading up to termination. List facts (e.g., Suzie arrived more than 10 minutes late to work on the following dates, or Suzie did not turn in her weekly sales report on the following weeks) not conclusions (e.g., Suzie did not care about her job). Make sure to reference any incidents of work rule or company policy violations. If you can demonstrate that the employee violated work rules or company policy, you may be able to successfully fight an unemployment claim.

3. Handle the actual termination efficiently and respectfully. If you have gotten this far, the decision to terminate has been made. You have thought deeply about the decision, investigated any incidents if appropriate and produced the documentation. Here are a few suggestions to make the meeting as pain-free as possible.

1. Hold the meeting at the beginning or end of the day. Arrange a time when few coworkers are present. Hold the meeting in a private place. If possible, hold the meeting where coworkers cannot see or hear the employee being terminated.

2. Notify your IT personnel, giving them enough time to disconnect the terminated employee’s access to your systems.

3. When feasible, we suggest having a third party, such as an HR professional, present for the termination. This reduces the probability of the employee making false claims regarding what was said during the meeting.

4. Think through and even rehearse what you will say prior to the termination meeting. An employment attorney or an HR professional can help here. Explain your decision to the employee. Do not go into excessive detail. Do not try to convince the employee that your decision is correct. Above all, do not get into an argument with the employee. If the employee starts to argue, explain that the decision has been made and that it is final.

5. Have the employee return any company property including computers, phones, keys, swipe cards, etc.

6. Give the terminated employee any documentation they will need to continue their benefits (if appropriate).

7. Allow the employee to gather personal possessions. This might be done immediately or after or before work hours. A manager, HR professional or the business owner should stay with the employee during this time. Don’t let the employee access the computer, take company documents, throw things away or attempt to clean up the desk.

While terminating an employee is rarely easy, sometimes it is necessary. Many small business people are reticent to terminate employees. This is understandable. Employees can feel almost like family, and in small businesses, they are often friends or family members. While we have frequently heard business owners lament, “I should have fired Suzie months ago,” we have never heard even one say, “I terminated Suzie too quickly, I should have given her a few more months before letting her go.” If you need to terminate an underperforming employee, follow the steps above to make the process flow as smoothly as possible.