Ashley Meadows
August 1, 2023
Letting go of an employee is never easy. In fact, the recent series of layoffs saturating the news cycle has strained workplace relationships. 66% of employees claim to be disengaged from their work entirely. A poorly timed termination can swiftly decrease any remaining company morale and worsen the rift between leadership and staff.
Although uncomfortable, terminations are an important part of running a healthy business. They require tact, emotional intelligence, and finesse to pull off. So, the question is how do you terminate an employee “correctly”? This article will teach you how to prepare for employee termination, deliver it, and maintain a positive connection to remaining staff.
Understanding different employment types
In the United States, employment is typically broken down into two forms. The most common is referred to as “at-will”. The second will be called “contracted”, though this word is used in different contexts.
Contracted employment is primarily used for employees who have been specifically hired for their skill set. It comes with different offerings, such as a negotiated salary, severance package, bonuses, and other benefits that come with the position for a set duration. Sometimes, they can even include a sign-on bonus. However, as stated before, “at-will” terms are commonplace and have become the standard for American employment. This means that either party can end the conditions of employment at any time for any or no reason, so long as the termination doesn’t violate the law in a state or territory.
Employers and HR professionals have to be careful not to take care of this somewhat vague explanation. It’s still your responsibility to make sure that at-will employees are properly informed of responsibilities and expectations. When it comes to at-will employment, the goal is for both parties to maintain a strong relationship and to keep working together for as long as possible.
What to ask before settling on a termination
Remember the human element when it comes to employee terminations. Employees are people, too. They do the best they can. They all contribute in some way to your business, and it’s ideal to make the separation process easy for the employee. Before setting about letting go of staff, here are a few things to consider:
1. Is this a necessary step?
Take a step back and understand why a termination has to happen. Have there been behavioral issues? Has productivity decreased? Was there an irreparable breakdown in communication? What steps were taken to mitigate any problems? This has to be the first step to establish a professional and objective basis for termination. Even as an at-will employer, you should be able to justify this course of action.
2. What were the conditions of employment?
Was an employment contract created, or was the employee hired at-will? What was their job classification? Were the terms properly communicated prior to termination? Was there anything about the role that was agreed upon verbally that was never set to paper? Understanding the role the to-be-terminated employee held will quietly set a precedent for those who maintain the same position at your company. Depending on how the termination is handled, remaining employees will either take note without worry or will to fear for their own job security.
3. Has the employee contributed outside of their role? If so, how?
Has the employee contributed in a way that has positively impacted their coworkers and/or the company? Have they added to the business flow in a way that can't be easily replicated? Have they been properly acknowledged or compensated for their work in the past? The last question is particularly important. Work that goes unrecognized and/or uncompensated will quickly teach employees that their contributions don’t matter, and if someone who's become a pillar of the workflow is terminated, this could negate morale completely.
4. Does the separation have to happen immediately? Can it wait?
If the termination doesn’t have to happen quickly, allow a grace period for your employee to get their bearings. Unemployment can be difficult to prepare for, and having a sudden lack of funds can leave someone distraught.This is where true compassion shines. Allowing an employee to stay long enough to leave with some income won't only leave them with a positive impact, but their coworkers as well.
5. Am I following the law according to state and federal regulations?
Some of the questions you may ask yourself will feel familiar to those in step one, but it’s important to rehash them to make sure that the termination is justified. Seeking legal counsel during this stage is crucial. An attorney will help you avoid accusations of wrongful termination and ensure that you’re compliant with state and federal regulations.
Crafting your termination letter
Once everything has been decided, it’s time to write the termination letter or as it’s also called “a notice of separation.” This will also act as a script when you speak to the employee. Whatever you say to them must also be outlined in the notice. Writing a separation notice is a tightrope act of being professional yet empathetic. Make the termination as painless as possible and to allow your employee to leave with dignity. The steps to writing a termination letter are:
1. Start by writing the date, your name, and the company’s information. Having this information is important for both your records and the employees.
2. Start and end with an abbreviated, positive review. One way to make things easier to digest is to acknowledge the employee’s work performance and how they’ve interacted with everyone at the company. It can be bittersweet to read, but letting employees know that they are seen and noticed can help them maintain their confidence as they move into a new position.
3. State the reason or reasons they’re being terminated. Tact is crucial. Keep your reasons clear and concise. If possible, offer to be a reference for the employee in the future.
4. Outline the terms of separation. Write their final date of employment, final wages, and any additional benefits that they might have access to once their employment ends. If they are under non-disclosure or non-compete agreements, this would be the time to remind them.
5. Thank them for their time. After your final positive note, thank them for being a part of the company. It can be difficult to move on past their role, but wish them well and provide them with Human Resources’ contact information.
Some states have requirements regarding written notices, so it’s best to cover all your bases before handing the notice over to the employee. If you’re worried about a negative outcome following this termination, create steps for conflict management. Allow existing employees to air their grievances in a confidential and organized manner.
Severance and unemployment
Knowing the law is your friend (and your responsibility). Even if your company doesn’t have severance or unemployment clauses, your state might have some requirements you’ll have to adhere to. If you are terminating a contracted employee, revisit the contract so that you can fulfill any severance clauses.
Terminating difficult employees
Connecting remember that all infractions must be properly documented and investigated prior to termination. If they’ve acted against the employee handbook, be sure to note misbehavior accordingly. There has to be proof of a pattern of unproductive or even dangerous behavior before termination.
Discussing end of employment
After seeking legal advice, gathering your documentation, and writing your separation notice, it’s time to communicate. Set a time and day to have a candid and private conversation with the employee in question. It would be ideal to have a witness present as well for the proceedings. If you are an HR representative delivering the news, bring in someone from upper management. If you are a manager, ask a team leader to sit in. Stay aware of their body language and listen to what they’re saying. If you believe that the encounter has the potential to take a negative turn, keep surveillance and bring security to stand as witnesses instead. Don’t control the meeting. Allow the employee to ask questions and create a safe environment where they can discuss their grievances or observations. Once again, wish them well and try to end the meeting on a positive note.
How to store documents after termination
Once you let go of an employee, you have to retain their documentation for a set period of time. Here is a short list of records to hold onto and their duration: Employment records. One year from the termination date. Payroll records. Three years. Employee benefit plans. For the full duration of the plan and then a year after it ends. Recruitment records. One year. Equal pay records. At least two years. I-9 forms. Three years after hiring date or one year after termination, whichever is later. It’s important to have a well-organized, easy-to-use system when it comes to recordkeeping. Some states might have laws that change how long to keep certain records, such as payroll and tax information. Be sure to look into that as well.
How to maintain morale and productivity in the workplace
Employees talk. One person will come back from vacation or their day off, notice their coworker is missing, and cause a communication cascade. How you deal with the termination will help employees build a collective narrative about the company and their futures in it.
This isn't the time to overcompensate the loss with team building exercises, events or events, nor should you pretend that everything is business as usual. Losing a team member can cause a ripple effect with employees. Before checking in on them, try to take an objective stance and figure out how productivity has been affected.
Has the workload changed? Has someone taken on new responsibilities that they aren’t prepared for? Are operations truly able to function as normal? Understanding these things first will help you understand the team’s current mood, and from there, you'll know how to approach them.
The key thing to always remember is the human element. Tensions might be high, or some employees might become resigned to their fates. Be sure to check in and allow staff to vent their frustrations or concerns. Keeping an open channel of communication will pay off in the long run and can help gain insight on how the hiring and termination process is viewed from their point of view.
No matter the reason, it can be difficult to part ways with an employee. It truly is an indelicate art, and regardless of how careful you are, feelings can sour a once positive relationship. But don’t let this discourage you. The best way to deliver bad news is with empathy and decisiveness. Maintaining a professional yet amicable relationship will help smooth any roughness and create a standard for remaining employees.
But you don’t have to go at it alone. Reach out to Bambee, and a dedicated HR manager will help you navigate the termination process with poise, clarity, and compassion. Our team will build policies that'll protect your business, keep you compliant, and maintain positive work relationships across the board.