My last post was on when to fire an employee. This post is on how to terminate one of your direct reports with dignity, while also limiting your exposure to a wrongful dismissal lawsuit. Once you have made the decision to terminate a poor performer I suggest you move quickly with the termination, but not so quickly that you violate the law or leave yourself open to a wrongful dismissal suit. You should also be aware that not only can your company be sued for wrongful dismissal but you, as the terminating manager, can also be sued personally. Now that I have your attention, here are my tips on how to fire.
- Review the dismissal in advance with your labor lawyer or your labor law consultant. We have a labor law consultant on retainer for just $90 per month. That is less than one phone call to a good labor lawyer. The labor law consulting firm we use has been in business for over 30 years and has an outstanding reputation in our part of the country. Our retainer entitles us to unlimited consultation on labor law issues. Even after over 35 years in business, I almost always find I have overlooked one or two key things after I talk to our consultant. If you can’t find a good labor law consulting firm in your area then you should review all terminations with a labor lawyer prior to the termination. Even an expensive lawyer’s fee is less than a wrongful dismissal settlement or judgment.
- Decide on a severance package. Unless I terminate someone for theft, repeated insubordination, or some other serious offense, I offer a severance package to the person being terminated. There are several reasons why I offer a severance package. First off, it’s the humane thing to do and I have to look at myself in the mirror every morning when I shave. I try to treat other people the way I want to be treated. Second, a fair severance package can salvage a relationship with the person being terminated and you never know when your paths will cross again. Third, your remaining associates take note of how you treat people you’re terminating. Humane treatment of people being separated from your company scores points with your other employees and may keep some of them from looking for another job if they feel that departing associates are being treated shabbily.
- Be aware of discrimination laws. Most business owners I talk with aren’t aware that anyone over 40 is protected by a different set of labor laws. When we terminate someone over the age of 40, unless they are being terminated for a serious offense, we offer a severance package to the terminated employee in return for signing a full legal release. In the state where we are headquartered (South Carolina) employees over the age of 40 need to be given up to 20 days to decide whether to sign the release, and they have seven days after they sign the release where they can rescind the agreement. While you may not want to offer a severance plan to someone over that you are terminating for poor performance, I submit that it is worth the peace of mind that you get when someone over 40 signs a legal release. The cost of an age discrimination lawsuit is generally much more than the cost of a fair severance plan. You also need to be aware of other protected classes. Sex, race, and religion are other protected classes as well. Most people are surprised to know that there are no federal laws against discrimination for sexual orientation (but some states do forbid discrimination based on sexual orientation).
- Terminate in private. I know that most labor lawyers and labor law consultants recommend that you have a witness with you during the termination but I have found that it only adds to the embarrassment for the person being terminated if you have an HR representative or another manager present for the termination. I have done it both ways and I have found that it has been much less embarrassing to the person being terminated if only two of us are in the room during the termination and I’ve not regretted it yet.
- Terminate in person. Recently the Wall Street Journal did a story on Carol Bartz, the CEO of Yahoo, being terminated over the telephone. Terminating her over the phone only made a bad situation worse and made her a lifelong enemy of the company. She immediately sent out an e-mail to all of Yahoo’s employees stating, “I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s chairman of the board,” she wrote. This made the company look cruel and heartless to every employee. There are times when you can’t terminate in person such as when you have a remote employee who works several states away. If you set up a special appointment with a person who works remotely they almost always know why you are coming to see them and it only makes the situation worse. I have learned this the hard way. Years ago I called a remote employee who I only saw quarterly and said I wanted to see him in two days. He said to me, “You’re coming to fire me aren’t you? If so, save yourself the price of the airline ticket and just fire me now.” I took his advice and did so. As I was prepared for the termination already I immediately launched into my severance offer. He and I are still friends as I treated him well with the severance package.
- Offer outplacement. For salaried positions I have found that offering an outplacement package also helps salvage the relationship with the person being terminated. If you can help your former employee get a new job quickly that not only can salvage the relationship with that person, but your other associates don’t have survivor’s guilt. Most outplacement packages are not very expensive and I have found them to be effective in most cases. I also have found that I sometimes end up having to do business with someone I previously terminated. It makes future business dealings much easier if the person you terminated has no animosity towards you.
- Always terminate quickly. Once you begin the termination you should try to conclude it within five or 10 minutes. If you have your severance offer ready it doesn’t take long to go over the high points of it and hand it to the person you’re terminating. Also, if you’re asking for a legal release you should go over that briefly and leave it with the person being terminated as well. Do not engage in a debate. Be polite but brief.
- Meet the terminated associate after normal business hours to clean out her desk in private. I think it’s cruel and embarrassing to march a terminated associate from your office or a conference room to her office or workstation and watch her put her personal effects in a box and then walk her out of the office in full view of all of her coworkers. I think it is much more humane to conclude the termination and then set a time to meet the terminated associate in the evening or over the weekend so that she can remove her personal effects in private. Again, the idea is to mitigate the embarrassment of the termination as much is possible.
These are some of the ways that I’ve learned to terminate associates while still allowing them to retain as much dignity as possible. If you have any other ideas about this sensitive subject I would like to hear from you.
© Copyright 2011 by Jim Sobeck. All rights reserved. This information may be reproduced as long as full credit is given to the author.