You're Fired! How to Properly Dismiss Employees
Dismissing employees is never easy. Here’s how to do it carefully and constructively.
Luckily, most builders and remodelers don’t dismiss their employees with that flippant phrase and hand flick Donald Trump made famous. But sometimes they wait too long to do something about “problem” employees.
Foot-dragging on firing issues costs businesses plenty in diminished productivity, quality, profits and customer satisfaction.
Some builders and remodelers fire employees improperly — and get themselves into trouble. Pat Sargent, president of Sargent Consulting in Claskton, Wash., which offers training and operations consulting services, has encountered several cases of unfair dismissal.
She knows builders who gave their employees regular cost of living raises — and then told them they weren’t performing. She’s also heard of builders who fired employees without any documentation to support their termination decisions. “They didn’t have anything written in their files to protect them in a litigious environment,” she says.
Business owners know when they have employees who aren’t team players. “It’s usually not difficult to identify who should be fired. The challenge is figuring out what the employee is doing and then determining how you can do something about it legally,” says Andrew Remm, executive vice president of operations for The Home Service Store, a home improvement contractor located in Kennesaw, Ga.
Use the following pointers to take action on employee performance or behavioral issues:
Build a Foundation for Good Performance
Many firing issues can be prevented by testing job candidates and hiring smart. “Determine the necessary skill set for each position and then advertise for and hire someone with those skills,” Sargent says. While you don’t want to hire someone who is curt, rude or disruptive, you shouldn’t consider friendly, outgoing or agreeable candidates until you’ve determined that they have the skills you need. There’s no point in hiring a friendly estimator who can’t do take-offs.
Provide a basic orientation for all new hires that describes exactly what’s expected of them in their job function and as an employee of your company. Consider an employee handbook to outline your policies.
“Job descriptions, including responsibilities and standards, must be in place for employees to do a good job,” says Chris Thompson, president of On the Level in Chaska, Minn. “Disorganization, confusion and lack of direction can lead to unhappy employees and poor performance.”
Be sure to update job descriptions regularly. If the company grows, an employee’s duties and responsibilities will probably grow, too. Don’t forget to periodically review and update your employee handbook, too.
Coach and Counsel
The word “probation” is rarely used these days because staffers are either employed or not — there’s no middle ground.
Spend time at the front end — when a new employee is hired — to coach, counsel and direct his development and ensure that the employee has a good start. In addition, counsel employees when they do something that contradicts company policy and/or their performance negatively deviates from procedures and standards specified in their job descriptions. Dave Stormont, president of Stormont Company in Kitty Hawk, N.C., uses the following counseling techniques:
Small builders often lack effective personnel management procedures. “Many of them fly by the seat of their pants,” says Sargent. “They don’t have consistent forms or orientation processes and they don’t do exit interviews when employees leave.”
It’s very important to treat all employees the same way. Consistency is crucial in human resource (HR) functions — and in every other aspect of your business.
If you counsel an employee for a specific issue, you must counsel all employees with that issue. Remm uses the example of three employees who frequently arrive at work late. One of the tardy employees is a high-producing salesperson. Don’t let the salesperson “slide” just because he makes a lot of money for the company. Counsel him just as you would the other employees with that attendance issue. Otherwise, it could be proven in a lawsuit that an employee received preferential treatment.
Follow Up on Recommended Improvements
“Don’t tell an employee he needs to attend anger management classes and then not follow up on his progress,” says Sargent. “An employer needs to accept some responsibility for an employee’s success.”
Setting goals and milestones in counseling sessions gives the employee something to work toward. It reinforces that you are giving him a chance and that you want him to succeed.
Monitoring an employee’s progress eliminates the risk of performance or behavior problems snowballing or continuing unchecked. Follow-up also yields additional information to make future decisions.
Once you’ve identified a problem and spoken to the employee about it, begin making notes about the problematic performance or behavior. Document your meetings and counseling sessions with the employee, too. And don’t shy away from letting the employee know that his job is on the line. The employee deserves to know that if the problem is not corrected and the correction sustained, his employment will be terminated.
“If someone presses you about why you made the decision to fire someone, you can pull out your file of documented counseling sessions and demonstrate that there was cause to fire that employee,” says Remm.
Maggie Geoffroy, vice president of sales and marketing for CDCI in Atlanta, uses an employee counseling form. The document states the performance or behavioral issue, the expected way to handle the issue in the future, how the issue affects the entire company and what will happen the next time it occurs. The form includes space for employee comments, the employee’s signature, and the supervisor’s. “This form has made my life so much easier,” says Geoffroy.
Use Third-Party Help
“Employment law changes so much it’s hard to keep up with it,” Remm observes. If your company is too small to have an HR department or an employee who handles HR functions (Sargent recommends either of these options for businesses that employ 60 people or more), consider outsourcing HR functions to a third party.
Business owners can hire HR consulting firms for a few hours a week or month. “For what you pay your CPA, you can retain an HR consultant,” says Remm. The firm can do employee counseling and documentation and can dismiss employees, too (with your input and approval, of course).
Remm advocates finding an HR consulting firm through the Society for Human Resource Management Web site: www.shrm.org. SHRM’s site includes a directory of consultants (www.shrm.org/consultants/directory).
Sargent suggests finding an HR consultant by asking your attorney for recommendations or checking your local home builders association’s membership list.
Whether you perform HR functions in-house or outsource them, run all firing concerns past your lawyer first. The lawyer can tell you whether or not you’ve got just cause to terminate an employee.
Put Your Emotions on Hold
A decision to terminate an employee — and the corresponding communication it entails — are business functions. If you’ve followed a process for providing sound orientation and if you’ve coached the employee on what is required and how to do it, he should know, maybe before you do, that his work is deficient or his behavior is unacceptable.
If you feel guilty or scared about terminating an employee, or if you fire him in anger or haste, he may try to talk you into letting him stay with the company. Even worse, you may face an angry person who’s demoralized by the way he has been treated.
“If you can’t remove your emotions from the process, that’s even more reason to outsource HR functions,” says Remm.
Make a Decision
In small companies, business owners usually make hiring and firing decisions. In larger companies, managers often handle those matters. Remm recommends that an owner or executive require a manager’s justification for firing decisions. The manager must be able to document and articulate the reasons for terminating an employee.
“When you have to terminate someone, you should not be wrestling with the issue any more. If you are, you haven’t made the decision yet,” says Remm. “Don’t bring the employee into the office prematurely.”
Conduct a Termination Meeing
Remm and Sargent recommend having at least one other person in the room, in addition to the employee. This is especially important if a woman terminates a man or vice versa.
“Sexual harassment is the number one charge employees try to bring against employers when they are fired,” Remm says. It doesn’t matter what gender the other person is — just as long as there is someone else in the room. Then it’s not one person’s word against another’s. The other person shouldn’t be one of the employee’s peers.
“Unless the employee has done something illegal on the job, I ask for his resignation and explain to him that it is always better for reference purposes to resign than to be fired,” says Stormont.
The employee may become emotional during the termination meeting. No matter how he reacts, be sure to treat him with dignity and respect.
“The most important thing I have found in firing employees is not to lay blame on them,” says Geoffroy. “At this point, they’re gone and there’s no advantage in further embarrassing or confronting them. If they didn’t get it when you tried to counsel them, they certainly aren’t going to get the point now.”
The meeting should be short. Remain calm and confident when speaking. “When I’ve terminated someone, it was rare that I spoke to him for more than five minutes,” Remm says. At the end of the conversation, stand up and tell the employee you are going to walk with him to his workplace to help him collect his possessions.
Retrieve Company Equipment
Have the employee give you all company-issued equipment (cell phone, pager, keys, credit-card, etc.). Sargent recommends using a standard form to list items issued to employees when they are hired. This makes it easy to collect those items if the employee leaves the company.
“Too many people fire employees and then expect them to return company equipment,” says Sargent.
Change the employee’s security code and computer password and disable his e-mail account the same day he is terminated.
Escort the Emloyee Fom the Building, Shake Hands and Wish Him Well
This brings closure. It also prevents the employee from sabotaging computer systems or taking client files with him.
If you’re worried about what the terminated employee may do, have another person help you escort him from the building. It can be the other person who was in the termination meeting.
Be Mindful of Morale
It’s best to dismiss an employee first thing in the morning at the beginning of the week. “That way, it doesn’t seem as though you’re trying to squeeze more work out of the person before letting him go,” Remm says.
Naturally, other employees will want to know about the terminated employee. For legal reasons, you must be very careful about what you say to other employees. Simply let them know that the employee is moving on. Don’t ever tell them he was fired.
To protect a terminated employee’s privacy, don’t announce his dismissal to everyone. Share that information only with department heads, managers and supervisors on a need-to-know basis. Do this right before or after the termination meeting. “Tell them, ‘I want to make sure that everyone still feels good about working here,’ ” says Remm. The key employees will let the rest of the staff know that the employee has moved on.
“If you have to do a lot of work to rebuild other employees’ morale after you fire their co-worker, you may have made the wrong decision to fire that person,” says Remm. “You protect morale by making the right hiring and firing decisions.”
Look on the Bright Side
“You and your company will learn and benefit from having to fire an employee,” says Thompson. “The employee you fire will also learn from the experience. It should make you feel better knowing that you’re actually helping the employee improve himself.”
Learn How to Successfully Manage Your Employees
“Managing Your Employees,” available through BuilderBooks.com, will help builders manage the people and paperwork of their businesses easily and productively. “Managing Your Employees” will help you establish, communicate, implement and document effective human resources policies and procedures. To view or purchase this publication online, click here, or call 800-223-2665.