How to Fire an Employee

Lee Polevoi by Lee Polevoi on May 3, 2012
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Few small-business owners look forward to firing an employee, but a day will probably come when you need to do so. Job termination is a delicate situation and should be handled with dignity and respect, as well as knowledge of your legal responsibilities.

Certain steps should take place before firing becomes inevitable. An employee should be warned in advance that you find his performance inadequate or her behavior unacceptable. Clear, agreed-upon objectives should be put into place, and you should be able to document how the employee has subsequently failed to meet these goals. Ideally, you’ve noted your dissatisfaction in writing and made it clear that, unless the employee makes significant changes, you will have no choice but to let him or her go.

You must always have a solid legal basis for your actions. You may not fire someone based on age, race, gender, religion, or disability. You may not fire a “whistleblower” who has complained about safety conditions or harassment. (Laws on this issue vary from state to state; check with your attorney before taking action.) It is also illegal to terminate an employee for taking medical, military, or family leave or time off to vote or to serve on a jury.

Taking all of the above into consideration, here’s how to fire an employee with compassion — and with the best interests of your business in mind.

If the employee reports to you, do it yourself. Firing people comes with the job and is not a task you should delegate to someone else (unless an employee reports to a supervisor or a manager, in which case your subordinate should be responsible for taking action).

Don’t improvise. You may pride yourself on thinking fast on your feet, but terminating an employee is a situation that demands forethought and preparation. The problem with winging it is you may end up worsening the situation by fumbling for words, or adding stress and confusion to an already difficult environment.

Know what you’re going to say. Because you don’t want to improvise, it’s best to jot down what you want to say. This should include:

  • Telling the employee clearly, without beating around the bush, that his job is terminated.
  • Stating the reason for termination, but without going into detail. You can say that the employee failed to meet previously discussed performance objectives. If she protests, your answer is, “I’m sorry, but the decision is final.”
  • Detailing next steps, which may involve signing papers and arranging a severance payment.

Include a witness to the discussion. Recognizing the emotional element of the situation, you should have a colleague on hand to help keep the discussion on track and, if needed, to be able to testify later that you behaved in an appropriate,
professional manner.

Escort the employee from the building. Unless there is a compelling reason to keep the employee on a few more days, she should be asked to leave immediately to avoid an emotional outburst or any destructive behavior that could impact those who still work for you. Escort the employee to her desk, so she can collect her personal belongings. You or a supervisor should be on hand to make sure no files are taken and nothing gets altered or trashed on the employee’s computer.

Ask the employee to sign a release. Business owners should request that the terminated employee sign a release of liability. Don’t write this release yourself: It’s a legal document that must contain specific language, so that your actions will hold up in court. Your employment law attorney should draft the release prior to your termination discussion with the employee. Some experts suggest that the request to sign this release be accompanied with an incentive for the terminated employee, such as a promise to extend severance pay from, say, two weeks to four.

The worst thing you can do is delay an employee’s termination. Once it becomes clear that someone needs to go, it’s best for everyone involved to take action immediately. The risk of further damage to your business is too great to ignore.

Lee Polevoi

Lee Polevoi is an award-winning business writer specializing in the challenges and opportunities facing small business. He is former Senior Writer at Vistage International, a global membership organization of CEOs.

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