SOLUTION

Laying the groundwork for a smooth termination

Firing employees is easier when you remove the mystery and eliminate surprises. When workers know what's expected of them—and they repeatedly fail to meet minimal standards—you're in a much better position to issue warnings and eventually terminate them.

Develop written policies to address key performance issues and indicate what actions will trigger termination. After your lawyer reviews these policies, require that every employee sign an acknowledgment that they received them. As your firm grows, establishing this precedent will help prevent legal trouble.

Take these steps to pave the way for termination:

1. Leave a paper trail. Consistently document any and all performance problems. Most termination meetings should occur when both parties realize that prior warnings did not suffice. Ideally, an employee's personnel file should tell its own story; in fact, some business owners will simply hand the employee a pile of probationary memos and say, "This stack is too high to allow you to work here any longer."

    

2. Review your promises. If the employee has a written employment contract, honor its terms. Also check if any oral commitments were made to the employee. Comments such as "You can expect to be doing this job for one year" can be construed in some state courts as creating a contractual relationship.

    

3. Don't prejudge. Give the employee a chance to correct problems by identifying them specifically and proposing clear corrective behavior. Consider putting the worker on formal probation for a set time, such as 30 or 60 days. Provide coaching as needed to ensure the employee has a fair opportunity to improve. That way, you can more readily justify an eventual termination.

    

4. Solicit input. Before concluding that an employee must be terminated, meet with the worker's direct supervisor or an HR manager. In a small company, you may not have many others within the firm to help you review the situation and offer advice; in that case, ask a mentor or join an entrepreneur peer group. Try to avoid making a termination decision in a vacuum.

What to say when firing an employee

Arrange for a witness to attend the termination meeting, such as the worker's supervisor. Start the meeting by delivering the news: don't ramble or try to lighten the mood with jokes or gentle asides.

After allowing the employee to respond—and not getting defensive or debating the merits of the termination—provide benefit information. This includes giving them their last paycheck (including unused vacation time), reviewing the status of their company-provided health insurance and perhaps providing a packet of information on COBRA and other programs. Give the employee the name of a contact person who'll help with follow-up questions or concerns about benefits. Also discuss to what extent you'll serve as a reference or handle future job inquiries.

If you pay severance, ask employees to sign a release form that forfeits their right to sue for wrongful discharge. Your lawyer should prepare the document and instruct you on how long to give each employee to sign and return it to you.

REAL-LIFE EXAMPLE

Kathi Gonsalves, human resources manager of Gem Case Inc., a jewelry box manufacturer in Cranston, R.I., has fired many employees in her nine years at the company. She always stays positive and shows support, even when there's precious little good news.

"Never let someone leave the room feeling they can't be successful at anything," she says. "Preserve their self-esteem. Make them feel it's not personal, and that just because they couldn't do the job doesn't make them a complete failure."

One of her toughest terminations involved an office aide who, while somewhat capable in her job, never smiled and complained constantly about having to use the same restroom as the factory workers. She kept insisting in derogatory tones that she wouldn't share a bathroom with "those people."

"I said to her, 'You don't seem happy here. This isn't working out,'" Gonsalves says. "When she realized she was fired, she smiled for the first time!"

Gonsalves often cuts right to the point. Example: "While you aren't meeting the criteria to stay in this job, I think you can do well if you find the right fit elsewhere."

She always holds termination meetings in her office so that she has information on benefits and vacation time handy. She also invites a witness, usually the employee's supervisor. And she diverts all calls to her voice mail to avoid interruptions.

DO IT!

1. Never say to an employee, "This is a permanent position," which can be interpreted as an employment guarantee. Use "regular" instead.

    

2. Keep a checklist that specifies under what conditions you'll issue an oral or written warning, put an employee on probation or resort to termination. Follow these guidelines; don't make exceptions or otherwise act inconsistently.

    

3. Quantify oral warnings, rather than issuing vague threats or general concerns. Example: "Chris, today is the fourth time in the past two weeks that you arrived at least 15 minutes late."

    

4. Organize written warnings into three parts: your work performance concerns, the corrective steps the employee must take and the consequences if these steps aren't taken.

    

5. Begin a termination meeting with a "why statement": the reason why you're taking this action. Example: "This wasn't a good fit because…, and that's why you can no longer work here." If the employee protests, calmly repeat the "why statement" verbatim. This way, employees will know exactly why they're terminated.

    

6. Always keep facial tissues within reach of the employee.

    

7. At the end of the meeting, give the employee a list of items to return to you, such as keys and ID badges.

    

8. Write a checklist reminding you and your staff to change phone access codes and computer passwords and take other steps to protect your company's intellectual property.

RESOURCES

Books

101 Sample Write-Ups for Documenting Employee Performance Problems: A Guide to Progressive Discipline & Termination by Paul Falcone (AMACOM, 1999).

Rightful Termination: Defensive Strategies for Hiring and Firing in the Lawsuit-Happy 90's, by James Walsh (Silver Lake Publishing, 1997).

Videos

Fairness Factor: How to Manage Employee Termination to Minimize Legal Liability; (CRM Films, 1998). Available from BrainwareMedia.com; (707) 538-5043.

Newsletters

Employee Termination Law Bulletin; (800) 229-2084; Quinlan.com.

Internet

"Parting Ways: Effective Termination Techniques" (Online Women's Business Center) has pointers on firing.

BusinessWeek has sample release forms.

Executions Corporate Style

Terminating Employees

Writer: Morey Stettner