If you have an employee who isn’t meeting expectations, you need to act quickly. Unchecked performance issues can wreak havoc on your business, affecting your company’s reputation and potentially hurting your profits. But don’t act too swiftly; terminating an employee on a whim is a risky move for your business. Firing someone without taking the proper precautions may leave your team understaffed and cause legal hassles. If you’re thinking of terminating an employee for performance issues, you need to follow a practical and fair process to reduce your liability and give the employee ample opportunity to improve.
After all, the enormous costs of recruiting, hiring, onboarding, and training a new employee could be avoided if you can instead help your current employee improve. It’s best practice to follow a progressive discipline process – which generally includes a series of increasingly severe penalties for repeated offenses – if you want to conduct performance-based terminations the professional way. Unfortunately, in some cases, termination is the necessary end result.
Are you thinking about terminating an employee for their job performance? Here’s 5 things you need to do first.
1. Find out when the employee began underperforming
You don’t want to automatically combat performance issues with instant termination. If you feel an employee is not meeting expectations, review their work to figure out when the performance issues began. Sometimes people experience rough patches. There might be an external factor that is contributing to their inability to meet expectations. You wouldn’t want to permanently lose an employee over a temporary shortcoming. However, if their productivity and engagement seems to have steadily decreased over a long period of time despite management efforts to improve them, you might have found your reason to consider moving forward with the termination process.
2. Keep a Record
Documentation is key. If you don’t have a record of something happening, it’s easier to argue that it didn’t happen at all. Even notes from informal conversations, when written and organized in a notebook, can be helpful and count towards documentation. HR technology platforms make it easier to track and organize important records like performance reviews, time and attendance, disciplinary actions, or other personnel files. Documentation will be your greatest ally if you ever have to defend your decision to terminate an employee. These documents show that you’ve made an effort to help your employee be successful, and may help decrease legal liability for your company. This proof of unsatisfactory performance may be what saves you from a lawsuit so it is important to be thorough. To further secure yourself look up your state’s employment laws (here’s New York’s) and consult your company’s HR experts to make sure you are aware of the worker’s rights when dealing with termination.
3. Set clear expectations
Every job in your company needs a description that clearly states the role and tasks expected of the employee, even if it’s informal. Having a solid understanding of the functions and responsibilities of each role in your team will help you communicate what it takes to be successful. Clearly define their roles, and you’ll make it easier to pinpoint and correct problems. It’s essential for your employees to know what’s expected of them, and you can’t assume they do. Effective performance reviews can play a large role in properly communicating these expectations with your employees. Up to date employee handbooks can also help you establish expectations and guide your actions when it comes to performance issues.
4. Be a helpful coach
Is your employee struggling to perform because of a lack of skills that could be taught or improved upon? Don’t be too quick to dismiss these cases. You don’t want to lose someone who is the right culture fit and a good team player, especially if they could develop the skills needed. Disciplinary cases could become great employees if they have genuine potential and if developing their skills costs less than restarting the hiring process.
In many ways, business leaders are also their employees’ coaches. You praise the good, correct mistakes, celebrate successes, and focus on keeping your team motivated and inspired. Your employees need lots of feedback to understand what they’re doing well, and how they can improve, long before you consider termination. Consistent, constructive feedback is the best way to keep everyone on track and nip performance issues in the bud before they become serious.
5. Create a performance improvement plan
If you’re providing ongoing coaching, but you’re still seeing major issues in performance, it’s a good time to develop a performance improvement plan. This plan should specifically explain what the issues are and give detailed information on how to correct them. The improvement plan should also set up reasonable timelines and hold the employee accountable.
Document the conversation and the plan, and ask your employee to sign an acknowledgement form to confirm their understanding. If you verbalize the improvement plan instead, make sure you at least send a follow-up email so that you both have something in writing. However you handle it, include plans to check in on a regular basis. Document these follow-up meetings too, and keep giving specific feedback on the employee’s progress. If you continue to see issues, and feel the employee isn’t making progress, address it quickly. Again, in writing, detail specifically what needs to improve and how it can be accomplished.
How to terminate an employee
Despite all your best efforts, termination is sometimes unavoidable. Once you reach this point, you should have clearly documented what you did to help the under-performing employee improve. If a performance-based termination comes as a surprise to your employee, you’ve done something wrong.
Before you terminate, take the time to check off the following tasks:
- Review all the documentation leading up to the termination decision
- Contact your legal counsel or HR representative to ensure you’re making a justified, well-supported decision
- Confirm with your HR representative that you’re following all the wage and hour regulations
- If you use employment contracts, non-competes, or non-solicitation agreements, ask your legal counsel for enforcement guidance
Here’s some resources for following New York’s termination laws:
New York is an “employment-at-will” state. Therefore, an employer may generally terminate an employment relationship at any time and for any reason, unless a law or agreement provides otherwise.
Download New York’s guidelines for a letter of termination
Having the termination conversation
When it’s time to sever the relationship, don’t disguise the real reason for a performance-based termination by saying it’s a “layoff” or something else. Be honest and direct. If your decision is supported, the truth will come easily. A performance-based termination statement sounds something like this: “We’ve talked several times about your attendance. We haven’t seen the improvements we expected. That said, we have made the decision to terminate your employment.” Leave no room for misinterpretation. You’ve stated the facts, and made your decision.
The timing and location of this difficult conversation are also important to think through. The right answer for your situation depends on a number of factors like the reason for the termination, the employee’s disposition, your company’s culture, and maybe more. While there’s never a “good” time for this kind of conversation, you can try to make it as smooth as possible, and lessen the impact to your team overall.
Termination should be seen as a sometimes necessary last resort.
Give your employees every opportunity to improve, and make sure you’re enabling their success with constant support, clear expectations, and accountability. And if you notice performance issues, act quickly to get them back on track. Document everything, just in case a performance-based termination becomes unavoidable. Make sure you are performing a thorough evaluation before onboarding your employee’s replacement so that you won’t have to go through this process again any time soon. If you spend the time to understand the reason the terminated employee failed, you can help your company avoid another bad hiring decision.
With the right HR support, you can reduce some of the risks and liabilities of being an employer, and focus on attracting, retaining, and developing the best talent. Contact Staff Leasing, and start a conversation around improving your human resource processes to better support your growth.