Tips on How to Terminate Employees Ethically

Some research suggests that an employee lawsuit over a wrongful termination can cost a company more than $100,000.

Because of this, some companies are scared of firing employees, even if they have a poor performance record. But having a poor employee on the team can also cost you lost profits, so what should you do?

Keep reading to discover how to terminate employees ethically and do your best to avoid a lawsuit or repercussions. 

Give Them a Second Chance

Small businesses might eventually realize they made a wrong hiring decision and must lay off some employees. This is never an easy decision, and some employees might just immediately jump to terminating the employee. However, you should at least give them a second chance or inform them about how their performance isn’t satisfactory and allow them to correct it. This can take some of the surprises out of the situation. 

You need to have a conversation with them and give them a chance to understand what they were doing wrong. You need to have a set deadline where you need to see improvements and make it clear what will happen if they don’t. 

Sometimes, you can also talk with your employees about their performance, and they may realize on their own that this company isn’t a good fit for them. They may just quit on their own, letting you avoid the difficulties of letting that employee go. 

Make Sure You’re Following All the State and Federal Laws

There are particular government and company rules you must follow when employing employees, primarily if you’ve hired them in a different country. For example, if you had your employee sign a contract with them, you may have difficulty terminating them. 

But if you hired a candidate for at-will employment, you can terminate them at any time. With that being said, you can’t fire them if you’re discriminating against them, and you also can’t fire them if they’re taking medical leave. Because of these special rules, some companies will consult with a lawyer as business insurance before firing an employee. 

But if you hire employees who are on a contract, then you’ll have to consult the agreement. You won’t be able to fire them for any of the reasons listed in the contract. However, the contract should state why you could end their employment. If they didn’t violate any of those reasons, then you can’t break their employment arrangement. 

Be Prepared for the Termination Meeting

It would be best if you never went into an employee termination without some preparation and planning. For example, you should review your company’s termination policy and employment termination checklist procedure. This will give you more information on notice arrangements and severance packages that you also need to provide. 

You should also consult with IT and ensure they have a secure backup of all the information or records on the company’s computer. They may not take the news well, and you don’t want to lose important company information in the termination process. 

You should also make a list of all of the company equipment that the employee has. This could be ID badges, laptops, software tool passwords, or other company-owned equipment. If you don’t want to let the employee back onto the company property, ensure that you have someone who can go around collecting personal belongings for the employee.

In addition, make sure you have all of the evidence you need when firing the employee. For example, if you’re firing them based on their performance, have a list of all the written warnings, correspondence, or notes from meetings about their performances. This way, you can have it on hand to go through when you’re having the termination meeting with the employee.

It would be best if you also had some information ready. The employees will likely ask about when they’ll receive their final paycheck, when their official last day is, and what will happen to their benefits like vacation time or healthcare. 

Lastly, you’ll need to have a termination document as well. This will outline the terms and conditions of their termination. They’ll have to sign the document, and you’ll need to make a copy for them to keep. You should keep the other copy in their personnel file. 

Be Clear

When firing an employee, ensure you’re as straightforward as possible in your communication. While these meetings can be awkward and uncomfortable for both parties involved, you must be clear with your delivery. Some people find it helpful to practice the conversation beforehand.

You should know precisely why you’re firing the employee and have specific reasons, along with the documentation. You also need to be firm about the termination and what the next steps will be. Remember that this isn’t a discussion, and the employee shouldn’t be allowed to make promises about improving their performance. 

It would be best if you also didn’t try to be soft during the situation. While you should be firm, you don’t have to be mean. You can be empathetic and understand the problem from both sides, but at the end of the day, you still need to terminate them. You can offer to help them through the transition period and answer any questions, but you can’t show them their position back. 

Don’t Surprise Them

If you’re firing your employee for performance-related reasons, it shouldn’t come as a surprise to them. Give them warnings and have meetings with them about their performance and how it’s not living up to your standards. You should try and have performance reviews with all of your employees at least twice each year so that they know where they stand and if they need to improve. 

For most employees, having an honest performance review with them will help them realize on their own that they need to perform better, and then you won’t have to worry about firing them. Firing the employee should always be a last resort unless they’ve shown repeatedly that they are incapable of doing their job. If they don’t improve, then you might need to terminate them. But make sure that you don’t wait too long because you could be losing out on productivity and resources until you can hire a better employee. 

That said, if an employee violates a strict policy, you don’t need to give them as much warning. 

Have a Witness

When you let the fired employees go, have someone in the room as a witness. This can be a compassionate and emotional meeting, and you don’t know how the employee will react to the news. Having a human resources (HR) representative present can help prevent any problems, and if issues arise, you have a witness to back you up. 

Give Extra Time (for Layoffs)

If you’re terminating employees due to layoffs, you may want to give them extra time to transition out of the position. You may like to offer them severance to provide them with a chance to support themselves while they look for a new job. 

If you need to lay off your employee but want them to stay for a bit longer, you can try offering a bonus or incentive to wait until that time period is up.

Help Them Transition

When you’re laying off employees, it can be challenging for them, but you can help them transition. You may want to write a reference letter that they can use when searching for new jobs, or you may have connections to which you’re willing to introduce them. 

You could even write LinkedIn recommendations or endorsements so future employers can hire that candidate. You may also want to check in with them to see if there’s anything that you can do to help them with their job search. 

These are only a few things you can do to terminate employees successfully, but you’ll also need to focus on your other employees. If you’re looking for more HR-related information and insights, check out our online publication, Recruiter Today, to discover more relevant information to help your business succeed.

 

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