When You Have to Fire an Employee - Best Practices

Ready, Aim, Terminate...

Firing an employee can be one of the most unpleasant tasks a small business owner has to perform, but when it needs to be done, here are some ways to make it as painless as possible.

• Be Prepared

  Terminating an employee shouldn't come as a surprise to anyone. If an employee's conduct or performance hasn't improved after a series of warnings or unsatisfactory reviews, it's time to part ways. Granted, there are exceptions to the rule -- someone is caught stealing or picks a fight with their manager -- and in those cases, there's no time to prepare. In ordinary situations, however, here are some ways you can prepare for the termination process.

• Make sure you know the laws governing termination of employment in your state, and if you're not 100% sure, consult an attorney who specializes in employment law.
• Establish written rules in your employee manual that spell out progressive disciplinary actions, e.g., verbal warning, then written warning, then termination. Make sure all employees receive and sign for a copy of the employee manual.
• Follow the procedures of the employee manual and document your actions to help avoid a lawsuit for wrongful termination. Employees should sign and acknowledge each and every infraction incurred.
• Decide in advance whether to give severance pay. While it's not usually required by law unless specified in an employment contract, it may help smooth the termination process and reduce negative blowback.
• Since it's best to hand out the final check at the termination meeting, you'll need to figure out beforehand such items as accrued vacation time and commissions owed.
• Make sure you know how termination will affect the employee's benefits, especially health insurance, so you'll be able to answer their questions.
• If you want them to sign a legal document such as a non-disclosure agreement or non-compete agreement, talk to your attorney and have it ready well in advance.
• Make up a checklist so you don't forget something important during what may be an emotional meeting. Include a list of what you'll need to get back before the employee leaves: keys, company credit card, laptop, etc.
• If you're not good at thinking on your feet while under pressure, prepare a short statement to read that briefly explains the reason for your decision.
• Talk with your I.T. Department about deactivating the employee's access to your computer network, email, and other digital assets as soon as the termination meeting begins.

• Just Do It

  Once you've prepared yourself, it's better for everyone involved to get the meeting over with as quickly as possible.

• Arrange a face-to-face meeting in a place where you won't be overheard.
• Don't give more than a few minutes' advance notice. It would just create a sense of dread for both of you, and if the employee expects what's coming, it might give them a chance to sabotage one of your systems.
• If you anticipate trouble or think the employee may be inclined to protest the termination, consider having another person as a witness. This could be the employee's supervisor or someone from the HR department, if you have one.
• Get to the point. Starting the meeting with small talk is only delaying the inevitable.
• Briefly state your reasons for the termination. Don't get into a lengthy discussion of grievances that will only encourage the employee to rebut your arguments.
• Make sure they know the decision is final. Don't be wishy-washy.
• Although the employee may become emotional, resist the urge to follow suit. Remain calm and in control.
• Make sure you have their signature on any required legal documents before giving them their final check.
• Answer any questions they may have about their final check, severance pay, benefits, etc. Give them the name of a contact person for any questions that come up after they leave.
• End on a positive note and wish them well. Use words of encouragement about finding a job that's a better fit for them.

• Tie Up Loose Ends

  While it may sound practical to give the employee a couple of days to finalize ongoing work, it's best that they leave right away, not only for company morale but also to lessen the risk that they'll retaliate in some way. Quietly escort them to their work area and get all company-owned items immediately. If it's possible to collect their personal items without drawing the attention of co-workers, give them some time to do that; otherwise, arrange a time outside regular work hours for them to return. Limiting contact with co-workers will minimize the potential for drama.

  After the employee has left the building, call a meeting to inform the rest of the staff of the termination before the rumor mill has a chance to do it for you. Assure them that all company procedures were followed, and reassign the terminated person's job duties.

Bottom Line: Maintain a good relationship with the terminated employee if possible, and don't speak badly about them to the rest of the staff, who will be watching how you react to the situation. While it's never easy to fire someone, handling it in a professional manner will make it easier for all concerned.