How to Terminate an Employee

Blogs and pegs in a maze

Every termination is unique, and there's no magic wand to make it an easy process.

Involuntary termination of employment can affect morale, productivity, employee satisfaction and more, which makes it critical for HR to follow a process regarding how to terminate an employee. Not only does a termination impact the business, but there are also legal risks that can arise when employment is terminated.

Step 1: Create Clear Expectations

Create fair and equitable performance standards, job descriptions, policies and standards that outline clear expectations around employment with your organization. These documents are the groundwork upon which a solid talent management strategy is built. This foundation allows HR to set new employees up for success, to manage ongoing employee performance and to terminate employment if expectations are not met. Without this clarity, employees must navigate their role without direction, which can lead to poor decisions and even unlawful conduct. And, without these standards, it's much more difficult for an employer to make a case for terminating an employee.

Step 2: Communicate and Document Any Performance Issues

Before you need to terminate an employee, be sure you have everything in place. That means providing all employees with access to your organization's termination policy, as well training managers and supervisors about the importance of documenting negative performance patterns in a methodical, timely manner. Managers should communicate with employees when performance issues arise. If behaviors continue, they should start recording their observations and statements based on fact.

Step 3: Identify Any Protected Factors That May Create Risk

Federal law prohibits employers from discriminating against and firing employees based on the employee's membership in protected classification (e.g., race, color, sex, religion, national origin, age and disability). Depending on the situation, after termination, an employee may take legal action against the employer, as well as others involved in the decision, if there is a reason to believe the termination was a result of membership in any of these classifications. Before terminating an employee, HR should evaluate any factors that may be cause for discrimination and ensure that requirements of employment laws and regulations have been met. In some cases, organizations offer separation packages to reduce risk when terminating employees.

Step 4: Plan and Prepare for the Termination Conversation

By planning and ensuring everyone is ready for what can be an awkward conversation, it's more likely the conversation will go smoothly. Schedule a meeting with a member of the HR team, the employee and the employee's manager. Clarify roles prior to the meeting — the manager should lead a brief conversation, the HR staff member is there to provide support, deliver the final paycheck (if State law requires it) and provide information about benefits. Critical information to convey during the meeting includes notifying the employee that their employment is being terminated, the reason(s) and facts behind the decision and the date of separation.

Step 5: Treat the Employee With Dignity and Respect

Even when ending an employee's employment with the organization, make sure the situation is handled respectfully. Before the employee leaves the premises, you'll want to collect any business devices, disconnect their access to the building as well as your organization's electronic network. Allow the employee time to gather their belongings, either directly after the meeting or arrange a time outside of business hours when someone from the organization will be present to assist and observe.

Unfortunately, every termination is unique, and there's no magic wand to make it an easy process. As any HR leader will tell you, none of the above steps are guaranteed to prevent issues. There is a long list of federal, state and local legislation that gives employees avenues to take legal action against perceived wrongful termination. When the end of employment is handled with care, and these basics steps are kept in mind, it's less likely to encounter risk. HR must follow a process regarding how to terminate an employee to not only avoid risk but also to ensure employees are treated with respect and dignity.

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