This article was updated on Sept. 10, 2018.
When an organization lacks enough work, has to downsize or has an employee who doesn't meet expectations, a responsible business owner may decide to let someone go. Letting employees go is never easy, but handling terminations respectfully can go a long way toward fostering goodwill with current and future employees, in turn helping maintain the business's reputation. In a transparent world of company reviews and social networking, the manner in which your small business communicates employee terminations is vital to its long-term success. Here are some communication guidelines to follow:
Prepare for Employee Reactions
Before letting an employee go, consider how the news will affect the employee initially and how she may respond. Prepare a few brief points to answer any questions that may arise regarding benefit end dates or the delivery method of the final paycheck, for example. Inform other employees in advance on a "need to know" basis. Once the individual has left the premises, you may opt to hold a private office meeting to notify the individual's team members or the entire staff. Some organizations send out a staff-wide email or other notification that the employee is no longer employed with the company.
Keep Your Language Compassionate and Brief
Don't prolong the termination process. Instead, simply let the employee know that the company has decided to release her from employment. Explain that this is not a personal decision, but rather a business one. It's difficult to argue or negotiate when the reason for termination is stated in these terms. Careful phrasing and honesty help prevent employee confusion and also helps protect the company's best interests. For example, you may want to say, "Thank you [name] for your 10 months of service. We appreciate your hard work, but at this time we have to make some tough business decisions that include letting you go." Or, "Our business is going in a different direction; therefore we have no choice but to let you go at this time."
Have a Written Termination Letter Ready
To help facilitate the procedure, prepare a termination letter ahead of time and hand it to the employee after you've explained why you need to let her go. This letter should be brief and concise, reiterating that her employment is terminated on the effective date and, if applicable, that she can expect to receive information about COBRA benefits within the next two weeks. Depending on your state's regulations, you may be required to offer a severance package; consult with legal counsel to determine if these laws may apply in your company's circumstances. Include a contact name and phone number in case the employee has any questions.
Explain What Will Happen Next
Allow the employee a few moments to absorb the news, and then explain what she should expect next. This may be as simple as advising the employee that you or a member of management will accompany her to her former workstation to collect any personal belongings and return company property. Then respectfully walk the employee out to her vehicle and ask if she is OK to drive.
Remember to never use accusatory, threatening, abusive, belittling or angry words or postures when letting employees go. Not only is this type of behavior inappropriate, but employees are likely to react negatively to such behavior, which could cause problems for the company down the road.
It is possible to handle employee terminations gracefully by phrasing your language clearly and succinctly and by demonstrating respect and understanding to the employee.