How Do You Terminate an Employee?
Updated: Sep 4
Of all the tasks required of management, terminating an employee is probably the most difficult and discomforting. In my years running a company and consulting with others, I found very few managers who could conduct a termination in an effective and humane way. And today more and more managers take the easy, colder way of terminating people via email.
But before one reaches the point of terminating an employee (as distinct from laying one or more people off due to business conditions or changing the work environment) there are a number of steps to go through before reaching that point. Along with the emotional and human impact on everyone, terminating an employee is also a decision with legal and financial consequences. Thus it's important to ensure that a termination is legally sound, fair, and respectful.
Leading up to Termination
By the time you're considering terminating someone, there should have been several conversations about performance and key incidents and concerns should have been documented. Feedback should be provided so that the individual understands the changes and improvements needed. Absent a direct violation of a company policy (drinking on the job, stealing, specific incident of insubordination, striking another employee) an employee should not be terminated based on a single act or failure. There should be performance or behavioral issues that have been addressed. And these issues should be, as much as possible, based on objective facts. In turn, the changes needed should be measurable (timeliness, frequency, etc.) as much as possible.
Once you perceive a performance issue with an employee, it's essential to review the employee's contract, company policies, and the employee handbook. You need to be sure that any issues that have arisen are not somehow addressed in any of the referenced sources. For example, the employee consistently leaves a half hour early.
Is that in the employment agreement as the employee is allowed to leave early for a personal reason. Or the employee doesn't participate in company meetings as there is a sensitivity to large crowds. Just as conducting performance reviews involves being familiar with an employee's unique circumstances, addressing perceived performance issues involves also being sure that there is not some prior agreement that supports the employee's actions.
The Problem with PIP's and Termination
PIP's (Performance Improvement Plans) have become very popular over the last decade or so. In general, PIP's are developed when a decision has been made that someone is not performing well. However, PIP's more and more appear to be a means to the end of firing someone rather than an actual tool to improve performance. In a recent article in the Wall Street Journal (Nov. 29, 2024), Anna Tavis, a human resource professional, says that a PIP is an oxymoron. "I spent 15 years on Wall Street and other places. It's a cover up. It's window dressing. None of these performance improvement plans lead to improving performance...it's an excuse to walk you out the door and say 'We gave you an opportunity. You didn't perform and off you go.'"
In too many instances, a PIP is only offered to ensure that the organization minimizes the potential for litigation after termination. If PIP's were effective, employees wouldn't be surprised, as they so often are, when told that they are being put on a PIP. Certainly, there are some instances when a PIP makes sense. If the performance of an employee who has been performing well begins to deteriorate, it would make sense to meet with that individual and discuss the gaps. If an employee is relatively new and not performing up to expectations, a PIP can be a helpful vehicle to guide that individual over a period of a few months until performance achieves expectations.
But if a PIP comes as a surprise and the employee feels blind-sided, most will see the PIP as a set up for failure. In fact, in the same article, HR veteran Steve Cadigan noted that they assessed the effectiveness of PIP's when he was at Cisco. "We did a five year lookback at every PIP and found that 90% of people who were placed on a formal PIP, whether or not they survived it, left within a year of that warning. Which to me suggests there's a fundamental break in the trust of that relationship."
As noted at the beginning, terminating an individual is often a difficult task. And, for many managers, giving people useful feedback that is intended to improve performance can also be difficult. However, if the organization has an effective performance review process and the manager is consistent in providing feedback that is targeted and appropriate, an effective performance review process will reduce the need for a PIP and even allow the organization to reasonably terminate an employee who is not performing well without the time and energy that a PIP requires, especially when the outcome is so often pre-determined.
All that said, there does come a point where you need to tell someone that they are being terminated. Following are several steps that I have found to be very helpful over the years. And while terminating an individual will always be one of my least favorite responsibilities, having a stable process with clear rules has always made it a little easier.
Preparing for the Termination
Once a decision has been made to go ahead with a termination, there are several preparatory steps.
Meet with human resources to inform them of the impending termination and review supporting documentation and company policies about termination. All companies should have a policy of always having two people conduct a termination. A manager should never conduct a termination alone as this opens the organization to accusations of inappropriate behavior during the termination process. Ideally, an HR representative should participate. But if someone from HR is not available, another manager should be in the room.
The manager should meet with finance to assess what monies are owed to the employee. Depending on the state, locale, or company policy, an employee may be entitled to severance, payment for unused vacation, payment for unreimbursed expenses, etc. The manager should know what is due to the employee and a check should be prepared to ensure that the employee is fully compensated for any monies due.
Make sure that you have reviewed any organizational protocols for termination, such as warnings, performance reviews, or a probationary period. Violating these terms may open you and the employer to legal consequences; so it's important to follow the procedures outlined in any company policies or employment agreements.
Conducting the Termination
When you meet with an employee to conduct a termination, informing them that they are being terminated should be virtually the first thing you say. If there's been a PIP and the employee has not performed sufficiently, you should have already shared that feedback. If the employee is being terminated for cause, you should say something to the effect of "We're terminating you / letting you go / ending your employment because...." The reason for stating here is that it's actually the kindest thing to do. Dragging out the process while the individual waits to hear the bad news about losing their job accomplishes nothing other than making the process more painful and more awkward. If you have done a good job of providing feedback, and helping the employee understand the consequences of poor performance you should be comfortable informing them of the decision.
Don't apologize. If you've made the decisions to terminate someone, you should not say "I'm sorry." If you're sorry, don't do it another way, own the decision. Saying I'm sorry either suggests that this is somehow out of your control or that you're doing something you don't want to do. If you've decided that termination is in the best interest of the organization then there's no need to apologize.
Keep it short. If you've given consistent feedback, you shouldn't have to explain why the person is being let go. Thus, one should deliver the news and not go into a lengthy explanation. That should only be needed if you haven't provided consistent feedback which has pointed to performance issues.
Don't negotiate. Do not argue or suggest that you are open to negotiation. By the time you're telling someone that they are losing their job, you should have given them opportunities to improve performance, been clear about changes needed, and ensured that they understand the potential consequences.
Remember - This is not about you. Don't talk about "how bad you feel," or how hard this is for you. You're not the one losing your job so don't try and solicit sympathy. It is inappropriate to ask someone to be sympathetic when you are telling them that they are losing their job. So don't try to elicit sympathy or tell them how bad you feel.
Allow them their dignity. If necessary, offer a tissue. But learn to live with the silence that may ensue after you've told someone they're losing their job. Allow them to absorb the news. Don't fill the silence because you're uncomfortable. After a minute or two you can go to the final step.
Tell them what happens next. Inform them about company policy around computers, removing personal effects from an office, who will be with them and help them out the door, etc. Explain all relevant information about a final paycheck, any expenses or vacation pay due and anything pertinent about a company 401K or other financial matters. If your organization offers outplacement services or career counseling, explain those services and how to take advantage of them if appropriate.
Termination and the rest of the staff. Whenever someone in an organization is terminated, other team members have to be informed as you need to address who will receive emails, etc. And the reality of organizations is that people often anticipate a termination when they know a person has received negative feedback (and people often tell their colleagues when that happens). Regardless, you should never discuss an individual's impending termination with other members of their team or the larger organization.
In my over 40 years as a business owner and executive, I have inevitably had to terminate a number of people. It is always hard and, not surprisingly, sometimes leads me to wonder if I made a mistake hiring the person (and sometimes I did). But I have arrived at this process by thinking about both the human aspect of having to tell someone that they are losing their job and the organizational need to conduct the termination process in a straightforward, safe and professional fashion.
Originally Published in Hotel Business Review - Hotel Executive
