Termination can be just as devastating for the person doing the terminating. The Wall Street Journal has reported that firing someone is one of three situations that make company presidents most anxious. It's probably safe to assume there's plenty of stress inside the person saying, "You're fired."
Aside from the emotional strain on both owner and employee, there are also legal ramifications involved in the act of termination. The following article is geared towards outlining ways of dealing with problem employees and making sure the company doesn't suffer in the long run.
Disciplinary Problems and Probationary Periods
Establishing clear and logical rules, along with an atmosphere of trust between management and labor, will minimize disciplinary confrontations with employees. Often it's the manner in which rules are established and enforced that makes the difference between a smooth-running operation and a company plagued by employee-related disruptions.
First, any rules established by the company should be reasonable, and workers should be consulted before the rules are adopted. The rules--and consequences for breaking them--should be known and well-understood by all workers. They should be impartially enforced, with any punitive actions understood by employees beforehand. You should be flexible in the enforcement of certain rules, taking into account extenuating circumstances when applicable. Communications channels should also remain open so that employees feel free to question rules they feel are unreasonable.
If a circumstance arises in which an employee warrants punishment, you should develop an employee warning system which should be implemented in a predictable and logical sequence, and should be easily adaptable to varying circumstances. For example, you might devise a system by which the employee is gently reminded of company policy on a certain issue the first time such a warning is warranted. The second time, a sterner warning is given, often in the form of a written reprimand outlining past performance and the prior warning(s) given; a probationary--and final--warning can be issued the third time, with a thorough accounting of employee performance and a clear understanding that violating the probation will result in dismissal. All such warnings must be done in private so as not to embarrass the employee, with counseling offered on improving performance. The warnings should also be recorded in the employee's personnel file, as mentioned in more detail below. Also, warnings must carry weight behind them or they won't be taken seriously; if a probationary warning is given, there should be systematic follow-through the next time serious disciplinary action is needed. Probationary periods should have an established time limit. The probationary warning should make clear what you expect in the way of performance improvement and over what time frame.
Try to Salvage the Job
Terminating an employee in haste or on the basis of fuzzy evidence can cause more problems in the long run than the ones you think you're solving. In these cases, it's better to try to turn the employee around than go through the painful firing-hiring process--unless the person has committed acts that are clear grounds for immediate termination, such as impropriety, gross incompetence or theft.
First, ask yourself who is really at fault in the situation. Perhaps the employee has had little or no control over his or her performance. Often in small companies, job assignments are poorly defined. This is one of the reasons writing down a job description when you are hiring is so important. Yet it is a sad fact that lack of adequate support and communication are often the real reasons behind poor results from an employee.
If the employee is actually at fault, a performance review can allow the person a fair chance to change. Remind the employee what is expected of them and that continued failure to perform will lead to dismissal. You must lay your cards on the table and establish goals from him or her to achieve.
Document Poor Performance
You should get an agreement on these goals and deadlines in writing and have the employee sign the form, so you have complete documentation on file. This written process forces you to analyze exactly what poor performance means to you. Misunderstandings about job duties will be brought out in the interview, as well as personal problems that are affecting performance. Sometimes these problems are temporary and can be worked around.
The most important reason for fully documenting performance reviews is to protect yourself in the event that the employee must be fired later. You will have clear and objective information on which to base your decision. The employee can't say he or she wasn't warned or given a chance, and you will have vital written evidence for use in supporting your case.
In fact, we recommend a performance-review policy for even the smallest of companies with only one or two employees. Basic to this procedure is a personnel file for each new employee hired. Into the file go the job description, job application (signed), resume, if any, and regular performance reviews.
Every six months, reviews or efficiency reports should be conducted for each employee after an initial probationary period. Review should be more frequent during the probationary period, perhaps monthly. Write a dated memo for the person's file whenever performance problems arise between reviews. Disputes among employees, missed assignments and the like should be documented in writing. This not only helps you do a better evaluation, but serves as evidence if you need to produce later.
If your employee doesn't make a comeback in performance after being put on notice, you must replace that person. The best way to approach this situation is quickly, without procrastinating. Use compassion and sensitivity when dealing with this task, avoid lecturing and, above all, do not resort to a shouting match. Limit yourself to facts supported by written documentation. Some labor attorneys counsel that a witness should be present at a firing for better protection in the event controversy arises later.
In recent years, labor boards and courts have sided with terminated employees more and more by awarding punitive damages or requiring payment of compensation in cases where termination grounds were unclear. The number of terminated employees who seek judicial relief is clearly on the rise, due in part to the impact of well-publicized sums of money awarded, job reinstatements with retroactive pay, etc.
Written evidence is the only material acceptable to labor boards and the courts. You can't afford to rely on your memory. A hazy recall of the facts or reasons for dismissal will tip the scales toward the employee in almost any case where cause for termination is questionable. It's worth your time to seek the help of a competent attorney familiar with labor laws in your state. He or she will help you understand the steps you should take to protect yourself from the nightmare that a botched firing can cause.