An Employer’s Guide to Terminating an Employee

Shefali Vasave | February 14, 2022 | 193 views

Why is it Necessary to Terminate Employment?

Sometimes, there is just no way around terminating an employee.

Employment termination can be a difficult and emotional decision for both the employer and the employee. Employers should be aware that such a decision is not to be taken lightly. There is a lot of weight to the fact that terminating an employee can cost as much as 200% of the employee’s annual salary.

Sometimes there are some serious reasons and external factors that compel an organization to terminate employment. Whether it’s organizational requirements like restructuring your workforce, revisiting your staffing needs, and optimizing resources, or individual grounds of termination like incompetence, insubordination, dishonesty, or even fraud, there can be many acceptable reasons.

Top Four Tips for Terminating an Employee with Dignity and Respect

An employee termination policy can guide your decision to terminate an employee and address the legal implications of the termination. Because wrongful termination can cost a company upwards of $100,000, you need to mention all the reasons, policies, and tactics for firing employees.

A conversation about firing an employee would be incomplete without revisiting the hiring of the employee. Most terminations can be avoided with the right hiring process. Some precautions that can be taken to avoid bad hires are:

  • Establishing an appropriate level of performance and expectations for the position
  • Determining the cause of the employee's inadequate performance and deciding if it is something that can be addressed with training and reskilling
  • Providing feedback on performance, including both positive and negative, to the employee so they know improvement is key
  • Creating a plan for how you will provide them feedback on their performance in the future, such as requiring regular reports or scheduling weekly meetings

Employee termination should be the last resort, as it is a terrifying experience for an employee. The least you can do is make sure that the employee is terminated in a dignified manner.

An Employee Termination Letter Shouldn’t Be a Surprise

Employee termination letters should not be a surprise because they are an important part of the process. They provide a formal notification to the employee that their employment is terminated. The letter should include specifics about the termination, like the date of termination, the reason for termination, and any benefits or severance packages.

The letter should be kept as short as possible. It is best to keep it to one page and avoid using emotional language or personal attacks on the employee. The key points that need to be included in this letter are:
  • Date of notice
  • Reason for termination
  • Severance package
  • Benefits continuation
  • Notice period

“It isn’t stated values, but rather behaviors and norms that actually comprise a company’s culture.”

- Julia Markish, Director of Advisory Services at Lattice

Planning Ahead When Terminating an Employee

The best way to plan when terminating an employee is to consider all your options before making your decision.

This is where your employee termination policy comes in. First, consider the reason for the termination and what would be the best course of action.

If you believe that they will be able to find a new job quickly without much difficulty, then it may be best to offer a severance package in exchange for their resignation.

If you think they will face difficulty in finding a new job, then you may want to offer them other options, such as additional training or coaching sessions. This will help them to find another position or suitable alternative.

Terminations are rarely mutual, but there are some steps that you can take to make this process easy and smooth for both parties.

 

Scheduling the Termination Meeting Quickly

Many companies face the challenge of quickly terminating an employee. This is often because they are trying to avoid any legal backlash or to save time on recruiting. You don’t want to dwell or negotiate once the decision has been made.

The first step is to make sure that you have a clear understanding of what the termination entails. You need to know what your company's employee termination policy is, how much notice you have to give by law, and what kind of severance package your company is giving you.

Next, it is important for you to schedule a meeting with the employee as soon as possible. It should be scheduled at least one week in advance so that it doesn't interfere with their work schedule and deadlines. The meeting should be short and sweet, just enough time for them to know what's happening and for you to give them prior intimation.


Communicating the Termination - Do’s and Don’ts

The termination process is an important step for every employee and their employer. In addition to making sure that all legal obligations are met, it is imperative to make sure that all communications are done in a professional manner.


Do’s

  • Document all the necessary information
  • Be mindful of confidentiality and privacy laws
  • Communicate with the employee as soon as possible, preferably in person
  • Be clear about your reasons for terminating them, including any performance issues or misconducts
  • Offer to help find new employment opportunities if they want to continue working in their field of expertise. You can also offer to provide a reference letter if they don’t want to continue working in their field of expertise


Don’ts

  • Don’t terminate an employee on a Friday. It is a bad idea to terminate an employee on a Friday unless it is necessary. Monday would be the best day to have the meeting.
  • Don’t communicate or share the employee termination letter through email. It is not advisable to send an email as it may seem cold and impersonal. Instead, try communicating face-to-face or through phone calls.
  • Don't terminate an employee without notice. The last thing you want an employee to do is walk out of your office in anger or frustration.


A Final Word

In the past, terminations were generally based on poor performance and misconduct. But nowadays, organizations are shifting towards more strategic terminations as part of organizational restructuring and workforce planning. They may terminate employees to reduce costs or to make room for new talent.

For instance, ByteDance, the owner of the video sharing platform, TikTok, recently laid off a global talent development team. According to a CNBC report, 70 to 100 people were affected by ByteDance’s decision to revisit and restructure the team to make the overall HR process more efficient. ByteDance handled the termination by offering the affected teams’ opportunities within the company. Most of the team members were internally accommodated into new job roles.

The decision to terminate an employee can have a significant impact on the organization's culture and morale, as well as its productivity. Termination is often necessary when there are performance issues or when the company needs to make changes to survive.


Frequently Asked Questions


How do you know if it's time to terminate an employee?

There are many signs that can indicate that it's time to think about terminating an employee. Some of these signs include:
  • The employee doesn't meet performance expectations
  • The employee has broken company policies
  • The employee is not a good fit for the position they were hired for
  • The employee is not a good fit for your company culture


What are the benefits of terminating an employee?

Terminating an employee will allow the company to free up resources and time that they can use to hire a new employee. This is especially true for small businesses that need to save money on overhead costs.


What is the legal process for terminating an employee?

If an employer terminates an employee without notice or without following the necessary procedure, then they might face legal consequences. For instance, people can sue their former employer for terminating them without notice.

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