Strategies For Terminating Employees

Updated Mar 21, 2013

Dismissing an employee is a difficult but necessary aspect to operating a business. Sometimes employees must be let go. It’s the way of the world.

In situations where you are forced to dismiss an employee, your human resources department should utilize a straightforward action plan, complete with techniques for notifying the employee and strategies for dealing with their response. No one wants to hear they’ve been fired, but the stronger and more professional your approach, the easier it can be for both sides.

In cases when a termination prompts some litigation, a strong action plan will assure your business is prepared.

Employees can be terminated for an infinite number of reasons — poor performance and downsizing are common reasons. But letting someone go isn’t a black and white issue, and it’s imperative to be thoughtful, deliberate and organized when deciding to cut staff.

You need a good reason and evidence to support it — rash decisions can lead to problems.

“It’s much more difficult to let somebody go than it is to hire them,” says R. Eddie Wayland, partner at King & Ballow in Nashville. According to Wayland, hiring an employee means you’ve qualified them to work in your facility. So, to let them go, you must prove otherwise.

This is where strong documentation comes in. Wayland recommends honestly cataloging all personnel information after hiring an employee. If an employee’s performance is lackluster, describe it as such. When you’re forced to terminate someone, you don’t want a personnel file filled with glowing remarks.

After you’ve made the decision to terminate someone’s employment, you need to acquire the necessary paperwork for separation and pick a time to notify the employee.

In the middle of a heated argument on your shop floor isn’t the best time.

“When it comes to letting someone go, there is a certain way to do it,” says John Hauge, partner at Ford & Harrison.

Hauge recommends picking a time late in the week near the end of a workday to privately pull an employee aside and notify them of your decision. He says you should be polite and professional, and be honest with the employee about the decision. If the employee needs to leave immediately following the interaction, provide him with a private exit from the facility.

“You want to avoid the ‘walk of shame’ of them having to walk out of your office at 9 a.m. on Monday with everyone knowing they’ve been fired,” he says.

During this process you also should provide the employee information about closing his benefits packages and removing his personal effects.

Wayland recommends having an intelligent but fluid strategy here. Different situations will require different levels of tact.

“I think it’s helpful if you have some procedures in place (that) everybody follows them,” he says. “But I think the more specific you try to make it, the more problematic it can become.”

He says the one thing you should always do is be honest. Inconsistency can raise questions. So can poor wording. A layoff is different than a termination, and Wayland says you should call each by its proper name.

“If you aren’t laying them off due to a lack of work, the fact that you call it a layoff doesn’t really make it a layoff,” he says.

All of this comes into play when a former employee files a wrongful termination lawsuit.

Wayland says “more than 75 percent” of employment lawsuits come from a separation of employment. Hauge recommends contacting legal counsel before terminating any employee, but says that can only minimize, not eliminate the risk of a lawsuit.

Termination is such an emotional situation, he says, you have to be aware of the possibility.

It should come as no surprise that angry and embarrassed employees are more likely to file charges or make legal claims against their former employers, he adds.

Both Hauge and Wayland believe an honest, planned and well-documented interaction with an employee is the best way to prevent and these situations.

Adds Wayland, “If a termination is investigated, are you going to be in the position to articulate with legitimate reasons why you did what you did?”

This is the second of Successful Dealer’s two-part series on making staffing changes. For the first installment on adding staff, please CLICK HERE.

Learn how to move your used trucks faster
With unsold used inventory depreciating at a rate of more than 2% monthly, efficient inventory turnover is a must for dealers. Download this eBook to access proven strategies for selling used trucks faster.
Used Truck Guide Cover