WORKPLACE: Terminations: A Fact of Business Life

One of the most unpleasant tasks of a manager is terminating an employee. (Maybe this is why we haven’t discussed this topic yet!) I once read that a manager’s risk of a heart attack increases immediately after a termination. I don’t know if this is true, but there’s no question that terminating someone isn’t fun. Unless, of course, you really don’t like the person. Then, it’s much easier...but still not what I would characterize as "fun."

In any event, since terminating employees cannot usually be avoided in the world of business, I thought I’d share some important tips for reducing both the stress and the risk.

Sometimes a termination is necessary because an employee is unable and unwilling to perform as required. Other times, you find employees who are able, but unwilling. Perhaps the most difficult situation is when the employee is unable, but willing. In any case, the goal of a termination is to part ways with the employee respectfully and without liability. In situations related to poor performance, if you’ve done a thorough job of coaching the employee, a necessary termination shouldn’t come as a surprise.

One of the best pieces of advice I can offer you regarding terminations is to avoid misdirected compassion. Translation: Don’t keep a poor performer around because he or she is a nice person. Your actions send a strong and less-than-positive message to others (customers and co-workers) that you tolerate substandard performance.

At risk is the morale of your current workers, respect for your management abilities, your culture, your peace of mind and your time. In other words — money. Many business owners and managers think they’re doing an employee a favor by not terminating him or her. In reality, most people who aren’t performing well know it and the longer they underperform, the worse they tend to feel about themselves. Many times, what a person needs in order to grow is not something your company has to offer.

TERMINATION TIPS. So, how can you avoid this unhappy alliance? Take a look at these termination strategies:

Strategy #1: You should evaluate new employees closely and address performance issues immediately. If a new employee is not working out, whenever possible, terminate him or her prior to the conclusion of the introductory period. Why? Because in many states if an employee is terminated for poor job performance during the first 90 days of employment, the employer’s account cannot be charged with unemployment benefits. That’s one good financially motivated reason.

More importantly, the longer you keep a person, the harder it becomes to make a change. If you have reservations during the first 90 days (also affectionately referred to as "the honeymoon"), they are likely to be greater down the road.

Strategy #2: Regardless of when you make your move (i.e., day 30 or year 30), you must be able to prove that the reason you terminated the employee was legal and nondiscriminatory. This applies to layoffs as well.

Although you may operate under an "employment-at-will" philosophy (which means you have the right to terminate an employee at any time, for any reason, with or without notice), you still must be able to establish that the reason was legitimate, business-related and not based on race, sex, religion, disability, age or any other protected class. In the absence of proof, if your decision is challenged by a government agency, there can be an automatic assumption of discrimination.

Strategy #3: If you are terminating an employee for poor performance, to reduce liability, document all issues leading up to the termination. Yes...this refers to the dreaded verbal and written warnings! As you prepare your documentation, remind yourself over and over again, "the purpose of this session is to solve the problem and maintain the relationship...solve the problem and maintain the relationship...solve the problem and maintain the relationship..."

In my August 2000 column called "Coaching the Y2K Employee," I outlined some practical tips for the coaching session. As far as documentation is concerned:

State the expectation. Ensure that the employee, without question, understands the performance expectation or job standard. If the expectation is outlined in a handbook or job description, refer to it. Remind the employee that he or she is personally responsible for meeting the expectation.

Document only the facts. Include observable conduct and tangible results of the employee’s behavior. Note the date, time and details of the event (who, what, where and when).

Reference previous discussions, commitments or written reminders/warnings. If the employee made a previous commitment to improve and has not done so, discuss his or her failure to live up to the agreement (this goes beyond discussing a continuation of the original incident — it calls for the employee to take ownership of the problem).

Determine ways you can assist the employee. If possible and necessary, state how you will assist the employee in meeting the expectation. This could include additional training or reviewing his or her work closely for a period of time.

Sign the document. Managers should always sign the memo or other documentation. The employee’s signature only validates that he or she received the memo. It does not establish agreement with the information. Remember, the signature is not what evokes change! Oftentimes, forcing an employee to sign sends a message of intimidation and mistrust. It’s much more effective to gain agreement from the employee verbally.

Provide a copy of the written reminder to the employee. If the documentation is properly prepared, there is no reason to withhold it from the employee. You should keep the original, of course.

Strategy #4: Run your decision by a "jury." In other words, talk to someone knowledgeable about state and federal employment regulations and someone who has, what I like to call, "business wisdom."

Oftentimes, when we’re in the middle of a tough situation, we simply can’t see the forest through the trees. A trusted adviser can balance the risks with the rewards and can provide insight and information that is fundamental to the termination strategy. As you prepare for the conversation with your adviser, ask yourself these questions:

• Have I terminated or retained other employees for the same conduct/infraction? If others were retained, why?

• Have I considered the employee’s length of service and overall performance?

• Is the "real" reason for the dismissal fully documented on the separation document?

• Has the employee been given an opportunity to tell his or her side of the story?

• Have I taken precautions to avoid potential violence associated with the dismissal?

• If necessary and required by state employment regulations, have I made arrangements to provide the employee with final wages and pay for any accrued, unused benefits at the time of separation?

• If I am a new manager, has the employee been given a fair chance to meet any different job requirements?

• Have I considered the impact on any of the following: Workers’ Compensation, Unemployment Compensation, Family and Medical Leave Act and the Americans with Disabilities Act?

Strategy #5: If the issue is one of a "square peg in a round hole," consider other alternatives. It may be that the individual would excel in another area of your organization. If the employee has strong and valuable skills, fits the culture and shows leadership potential, question whether other opportunities are available to him or her.

In order for this strategy to work, you must have a thorough understanding of the particular individual’s abilities, personality, interests and motivations. Transferring a problem will simply set you back further.

CONCLUSION. Sound tough? It is. Perhaps that’s why the No. 1 problem with terminations is — quite simply — they don’t happen often enough.

The author is president of the Winter Park, Fla., consulting firm, Seawright & Associates, Inc. She can be reached at 407/645-2433 or via e-mail at jseawright@pctonline.com.