Employee terminations are one of the ugliest parts of business ownership. Whether it's from a financially-driven layoff, a reorganization, or a performance issue, it's never a good day at the office when there's an involuntary separation. Terminations are expensive, costing the company about 50% - 60% of the terminated employee's salary to refill the position.
Employers always take a short-term bottom line hit when there is a termination, especially if the employee files for unemployment or files a wrongful termination suit.
For highly visible situations, the fallout can be even worse. Fired employees can easily become damaging whistleblowers, as ex-Volkswagen employee Daniel Donovan demonstrates.
When a company terminates a volatile employee, they are potentially unleashing a poisonous can of worms. I'm not suggesting that companies retain toxic employees out of fear for retaliation. However, it's essential that business owners anticipate the damage an irate ex-employee can cause, and move swiftly to contain it.
Before The Termination
Terminations are rarely knee-jerk reactions for the employer, and if they are performance-based, they are rarely surprises to the employee. Prior to terminating an employee for performance, follow this HR process to legally protect the company:
- Document as much as you can. I'm a big fan of conversation recaps and email trails. Expect that an employee will have a much different perspective on how you arrived at your decision to terminate.
- Know the job description well. The job description is an essential tool in the termination process. You can not fire for performance if you can't reach back to mutually agreed upon expectations.
- Provide coaching. This demonstrates your commitment to the employee's success, and shows you are willing to do whatever is possible to salvage the situation.
- Provide written counseling of what is going to happen if performance is not improved. This is a form letter that the employee must sign. It spells out the problem, what the company has done to address the problem, and what the next steps will be if performance doesn't improve.
In addition to protecting the company legally, the company must protect itself from a data breach. Immediately prior to the termination, put processes in place to shut off access to the network and to email. The IT department and HR department must work closely together to ensure all bases are covered.
During the Termination
- One of the most valuable pieces of advice I learned while running Information Experts for 15 years was from our outsourced HR Director Jennifer Brown, CEO of PeopleTactics: Always have a witness during a termination. The third party will eliminate a he-said-she-said scenario, which can sometimes lead to a lawsuit.
- Always keep the termination as professional as possible. "We've eliminated the position" is the safest termination clause. Keep the conversation focused on the steps ahead. Terminations are emotionally charged conversations, and it's best to resist being drawn into a defensive dialog. The less an employer says, the better.
- Present the employee with a termination letter outlining the reasons for termination, what they can expect moving forward, and any legal restrictions on them, including slanderous or damaging behavior.
After the Termination
- Be proactive with communications to all stakeholders (employees, customers, partners, etc.) as soon as possible, with simple messaging you've created prior to the termination.
- Activate a plan to have other employees be customer points of contact if the employee was customer-facing. This should happen immediately. For very large customers with a high strategic importance, the CEO should reach out personally.
- Don't discuss the details of the termination with anyone. Other employees will watch to see how you handle it, and some will likely inform the terminated employee of what is happening in the office. Former employees often stay friends with current employees long after their termination,especially in the social media era. Your conduct as a leader will definitely be discussed.
- Don't engage in an online war with an ex-employee. You will lose. They will likely post disparaging comments about the company, and maybe about you. Handle it privately, and remind them of their legal obligations to protect company information.
The tighter you can contain a toxic employee with preemptive processes and legal documentation, the more quickly the drama surrounding the termination will dissipate. It gets easier with every termination when we remember that our decisions ultimately serve the greater good of the organization.