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How to Respectfully Terminate Employees

These 4 tips will help avoid lawsuits and keep your reputation intact.
August 18, 2009
URL: http://www.entrepreneur.com/article/203070

Terminating employees is never an easy thing to do. There is a right way and a wrong way of doing it--with suitable guidance respect for all involved parties can be intact.

There are three key aspects of a proper termination: legal, psychological and sociological. The legal component involves reviewing the law and making a reasoned business decision, reviewing records and obtaining valid releases of potential claims. The psychological component involves allowing the terminated employee to tell his or her story and leave the company with dignity. The sociological component involves considering the impact of a termination on remaining employees and the outside world.

1. Strive for objectivity. Emotions run high in an office environment, especially during difficult economic times when both employees and employers feel constant pressure to perform. The decision to terminate--like most employment decisions--should be a factual business judgment rather than an emotional response. Nobody should have the universal right to fire an employee without proper protocol that involves oversight. The most severe action taken by any individual within an organization should be an administrative suspension that gives the company proper time to collect and review its facts and consult with counsel if necessary.

2. Create a bridge to the future. It is important for companies to protect their reputation when terminating employees. Past employees may not only be future sources of business, but how a company handles terminations can also affect its future success recruiting sought-after workers. Employers should strive to separate individuals through a process that helps the employee leave the company with his or her pride intact. It is critical that someone within the organization, whether it is the individual's direct supervisor or someone in human resources, allows the employee to tell her story. A terminated employee should understand that while the employment relationship did not work out, the employer appreciated her service and does not fault her in a personal sense. Employers should make an informed decision regarding whether to contest unemployment, as this may also impact the employee's perception of the company.

3. Review records and organize paperwork . If a terminated employee decides to seek legal counsel for a potential discrimination or other claim, the plaintiff's attorney may look to find violations the employee was never even aware of. Employers can ward off potential claims by carefully reviewing an employee's accrual of vacation time and reviewing records for any potential wage and hour violation early on to ensure a plaintiff's attorney doesn't discover some impropriety down the road. Companies should consider requesting the terminated employee signs a valid release of potential legal claims. It's important to remind the exiting employee of any ongoing obligations such as maintaining the confidentiality of trade secrets.

4. Recognize lessons learned . Although the company may think it handled a particular termination well, employee sentiment may not line up with the employer's perception. It is important to talk to employees and supervisors left behind to ascertain their thoughts and feelings about how the company handled the departure keeping in mind confidentiality issues relating to the termination. This helps prevent low morale following the "resignation" of someone well-liked within the organization and helps the employer gain insight for how to handle similar situations in the future.