Terminations done right: How to avoid potential liability by thinking it through first

By Chad V. Sorenson, SPHR    

Fired. Terminated. Dismissed. Let go. Made available to the industry. There are many ways to say it, but they all have the same result—you’re down one employee and there are probably some hard feelings and bruised egos left behind.

Hiring and firing, when done right, can be very effective and lead to better results. When misapplied or misunderstood by managers, however, hiring and firing can cause headaches and increase an employer’s potential liability.

There is an old saying that states one should “hire slow and fire fast,” but many employers often get it wrong. Just like investors who know they are supposed to buy low and sell high, too many do just the opposite.

Last month, Richard Hadden talked about behavioral interviewing and getting it right the first time when hiring an employee. Now, what do you do when you need to terminate that employee?

Just do it

The natural tendency of most people is to avoid conflict and confrontation, but as a manager, you are doing a disservice to yourself, the company, the less-than-adequate employee, and your top performers by avoiding performance or behavior related issues at work.

Each stakeholder is affected differently by your inaction when dealing with performance or behavior issues.

•The manager: You probably spend more time dealing with these issues than serving your customer or working with your top performers.

•The company: Productivity can be impacted by a low-performing employee. Customers often see the issues directly or indirectly, which, over time, can impact their image of your company.

•The nonperforming employee: If you, as the manager, are not addressing the issue, you are, in effect, telling the employee their behavior or performance is acceptable. You may also be letting the other employees know that substandard performance is tolerated.

•The top performing employee: Your inaction can lead to your top performers becoming disengaged in their job and eventually lead them to move to another company. Your attention has been diverted to the nonperforming employee and your star employee has been picking up the slack.

Step by step

Once you have determined that an employee needs to be terminated, there are a series of steps you need to take to protect your company and minimize the disruption in the business that may follow.

1. What is the issue? What is the specific policy or rule that has been violated; or what is the performance issue that needs to be addressed? Once this is known, talk to the employee in a nonthreatening way. Don’t beat around the bush, but be tactful in your conversation.

Explain the issue and talk about how to resolve it. It is always better if they can come up with a solution that is acceptable to you rather than simply telling them what to do. In the end, be sure to clearly communicate the consequences of not correcting the problem or not improving the performance.

2. Is the consequence fair? Not every result or consequence has to be the same; however, the actions of an employer must be fair. In other words, are the actions consistent with your company policy? Have other employees in similar circumstances been treated in this manner? Does the punishment match the action?

3. Is the decision based on a business reason? The best way to avoid a charge of discriminations is to ensure all decisions to terminate someone’s employment is based on a business reason or need. In addition, informing the employee of the business reason for the termination will reduce the chances of them believing you are singling them out.

Your company needs to have employment policies in place to ensure a safe and productive work environment. If an employee violates these policies, he or she needs to be told about it. In some cases, the employee needs to be given the opportunity to correct the behavior. However, if the behavior continues, the next step in the disciplinary process must occur.

The same holds true with performance-related issues. There should be performance standards for every employee in order to deliver the best product or service for your customers. If an employee is not performing to these standards, tell them about it, develop a plan to improve the performance, and reward success—do not accept subpar work.

In addition, you need to verify that there are no other legal reasons why this termination cannot occur. There are numerous employment laws that preclude the termination of employee at certain times during their employment. It is always best to seek the guidance of a human resources consultant or employment attorney to get answers to all the proper questions before stepping over a line.

4. Have you documented every step in the process? One of the best protections against an employee’s charge of discrimination is proper documentation. Document every step in the process as you go. Don’t wait for a termination to occur or a charge to be filed to document what happened and why.

Memories fail and people leave. If you can show the business reasons why someone was terminated and the steps that led up to this outcome, you should be able to reduce your liability.

5. Terminate with dignity. No employee should be surprised by their termination. If you, as the employer, did everything right, the employee should know the consequences of their behavior or lack of performance.

In the event of an immediate termination for a flagrant violation of a company policy, the employee should still not be surprised because they would have been made aware of the policy when they were first hired.

During the termination meeting, be direct, polite, and courteous. Explain the reason for the discharge, tell them the next steps in regard to their benefits and final paycheck, inform them of the effective date of the termination, and the manner in which they must leave the premises.

Do not hold out hope for the employee that the situation can be reversed. Do not blame others for the termination. Do not discuss the termination with other employees.

By terminating the employee with empathy (not sympathy) and dignity, you may be able to minimize the amount of resentment the terminated employee may have toward the company. In addition, you are showing the other employees who remain that you apply the company policies in a fair and just manner.

It’s never easy

Terminations are never easy. Sometimes managers avoid them because they are afraid of lawsuits or simply dealing with the confrontation. This doesn’t have to be the case.

If you address situations as they arise and be clear about your expectations of the employees, they will respect your decision as an employer. Most importantly, you will retain a high-quality workforce that produces results you desire—and your employees will thank you.

Chad V. Sorenson, SPHR, is the president of Adaptive HR Solutions and vice president of Talent Development Inc. His primary focus is helping small and mid-sized employers navigate employment law and get the most out of their employees. He can be reached at

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