Managing the Employee Termination Process

The Employee Termination Process

There are numerous circumstances that necessitate employee termination ranging from consistently poor performance to habitual tardiness. Whether you are a small business owner or a human resources professional at a large corporation, having to fire someone is never a pleasurable task.

A common mistake that businesses make is not developing an employee termination process proactively and waiting until they need to let go of an employee. If your business does not already have a termination process in place, you should develop one immediately.

Lacking a structured and comprehensive termination process puts your company at risk of violating employment law and state laws which may result in a former employee filing a costly lawsuit. Not only do wrongful termination lawsuits cost a lot of money, but they can also damage your company reputation.

Make sure you directly reference your company policy and employee handbook while developing your termination process. The employee termination procedure should be carefully devised and maintained, including specific information about before, during, and after employee termination.

What to do Before Terminating an Employee

Depending on how severe an employee violation was, a business may undertake different steps before termination. Of course, if employee misconduct was especially inappropriate, such as theft of company property or an intentional breach of confidential information, immediate termination may most appropriate.

A terminated employee should never be able to claim they did not understand your company policy or their employment contract terms. Make sure that your human resources department provides every new employee with a copy of their-

  • Employee handbook detailing company policy
  • Job description and responsibilities
  • Employment contract
Businesses should require new hires to sign a formal confirmation that they have received these documents and understand them. Businesses should additionally clarify within their employee handbook which offenses require a performance improvement plan or disciplinary action versus what offenses warrant immediate employee termination.

Experienced business professionals know that employee poor performance could be temporary and due to a variety of factors. For example, there could be a failure of human resources to provide the software that employees need to appropriately perform their role or a sick family member at home.

Performance reviews are an excellent chance to request feedback on how you can help employee performance. When you consistently give employee growth and feedback opportunities, your entire company culture benefits.

If employee performance is not up to standards, a performance improvement plan may be supplied to the employee. A performance improvement plan clearly outlines performance improvement expectations and encourages constructive conversations between employees and management.

Businesses that utilize a performance improvement model administer increasingly severe disciplinary action overtime to combat poor performance with the goal of performance improvement and avoidance of employee termination. If an employee ignores disciplinary action or performance improvement plan initiatives, employee termination may be the only option left.

What to do When Giving an Employee Notice of their Termination

Before the official termination meeting is scheduled or the termination letter is drafted, make sure to inform all relevant staff members about the employee termination plan ranging from your IT department to legal observers. Schedule the termination meeting once you are ready, ideally with a human resources staff member or legal professional present to witness.

Depending on state laws you may need to explicitly explain the basis of termination to the employee. During the termination meeting be prepared to answer questions about any health insurance and unemployment benefits that an employee is eligible for.

You may decide to hand an employee their final paycheck and termination letter directly or request an address to mail it to. Severance pay may only be administered to employees in certain circumstances but should also be considered.

While the termination meeting takes place, IT should revoke technological privileges and permissions. Any company property should also be immediately surrendered by the former employee or if not available, a plan must be established for its prompt return.

Depending on the circumstances of employee termination you may elect to request a formal exit interview to obtain additional feedback. Otherwise, an employee should be escorted from the building discreetly, and advised of any communications expected in the future.

What to do After an Employee is Terminated

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At this point in the termination process, you may decide to inform other employees about the terminated employee and how it will affect them. Notify employees of any future changes anticipated such as a replacement of the terminated employee or a departmental restructure.

If there will be a temporary or permanent reassignment of former employee responsibilities, let every relevant team member know. Otherwise, only tell employees the necessary information about the dismissal, keeping conversations brief. Remember, gossiping is unprofessional and detrimental to your company culture overall.

Make sure your termination process considers situations such as future reference requests or return of any personal items. For example, personal items could be mailed directly to an employee's address, or instead, an employee could be granted permission to stop by the office after work hours to collect their things.

A crucial best practice step for concluding the termination process is performing a retrospective review each time it is utilized. Consistently reviewing your termination process keeps it up-to-date and as efficient as possible.

Key Takeaways

  • Whether due to poor performance or absenteeism, sometimes employees need to be dismissed from their role.
  • A comprehensive and standardized termination process avoids violation of employment law and state laws as well as wrongful termination lawsuits.
  • Make sure to provide a clear job description and employment contract to every new hire to avoid misunderstandings.
  • Directly reference your employee handbook and company policy when forming your termination process.
  • Performance reviews and the development of a performance improvement plan are great tools for addressing employee performance issues. Additionally, progressive discipline aims to improve performance through disciplinary action and ultimately avoid employee termination.
  • Schedule termination meeting with a legal or human resources witness present. If necessary, allow employees to come back for personal items or mail items directly to their address.
  • Notify relevant employees of the termination and any anticipated changes your business will experience as a result.
  • Review your termination process each time you use it for any improvement possibilities or updates.

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