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When And How To Fire An Employee: A Step-By-Step Guide

When And How To Fire An EmployeeWhen And How To Fire An Employee
min read
August 21, 2023

Let's not sugarcoat things: Firing someone is a sad, stressful scenario employers and employees want to avoid. But, in most circumstances, it's a necessary step to improving your company and team. Firing someone is a big decision that shouldn't be taken lightly, so how do you know it's time to let an employee go? Read on to learn when and how to fire an employee. 

What Does It Mean To Fire Employees?

Contrary to popular belief, firing an employee is not as clear-cut as it used to be. Now more than ever, more employees have been laid off or furloughed, rather than fired. Before you learn how to terminate an employee, it's important to understand what firing an employee actually means. 

Firing vs Laying Off 

There's a big difference between firing and laying off an employee.

While firing someone is usually the result of poor performance or their office conduct, laying off an employee has nothing to do with their work. As a general rule of thumb, a layoff occurs when a company is restructuring or downsizing, and multiple team members are released from their jobs. 

While letting a worker go is never ideal, how it's done will impact your former employee's eligibility for unemployment benefits. When a company lays off its employees, they will often ask their workers to sign an employment separation agreement, which prevents the former employee from taking legal action. In return, companies will often give their laid-off employees a severance package, where former employees can continue to receive pay and benefits like health insurance for a small period of time. Usually, severance pay is typically one to two weeks for every year spent at the company. According to federal law, laid-off employees can also file for unemployment and receive some financial aid. 

However, firing someone is a little different. Since the employee's actions are the reason for their termination, they may not be eligible for a severance package. While fired employees can file for unemployment, they may or may not receive financial support depending on the circumstances of their termination.

So where do furloughs come in? Think of it as a temporary layoff. Technically, a furloughed worker is still employed and will resume their job after a short period of time.

What About At-Will Employees? 

Fortunately, parting ways with an at-will employee is a little easier. An employer can stop working with an at-will employee at any time and for any reason. (Provided the reason behind the termination isn't illegal.) That being said, at-will employment is a two-way street. If an employee doesn't want to work for a company, they don't have to. 

Reasons To Fire An Employee 

So, how do you know if it's time to let an employee go? Just because you're the boss doesn't mean you can fire an employee whenever you please. In order to avoid a wrongful termination suit, it's important to understand how you can legally let an employee go. While breaching company policy and poor performance are signs it's time to part ways, other reasons can include:

According to federal law, employers cannot fire a worker because of their race, ethnic background, sexual orientation, gender, religion, or political beliefs. Before you start the firing process, consult your human resources department to ensure your grounds for termination are legitimate.

Addressing Performance Issues

For many bosses, firing an employee for performance issues can feel like a Catch-22. While you need to have competent, qualified individuals on your team, it can be all too easy to give your problem employee the benefit of the doubt. After all, isn't there a reason you hired them in the first place

If you want to reaffirm your hunch that an employee isn't the right fit, check out their performance reviews or consult a trusted colleague. According to the Harvard Business Review, consulting others will eliminate confirmation bias, which is when you view all of an employee's actions in a specific manner.

From there, check-in with the problem employee. Little do you know, there might be a reason your employee isn't performing to your standards. Is there a bandwidth problem? Are they dealing with personal issues such as the loss of a family member? Understanding the root of the issue will give you some perspective. For example, firing someone for their tardiness may seem drastic once you realize they have a sick child at home. While these underlying causes shouldn't excuse poor performance, having an open, honest conversation can lay the groundwork for an improved work environment.

Once you've addressed the problem, implement a development plan, which outlines three to four ways your employee can improve their overall performance. Chances are, change won't happen overnight; however, it's important to schedule a follow-up meeting to check in on their progress.

When To Contact Human Resources

Depending on the situation, contacting your company's HR department at the first sign of trouble seems drastic. After all, some conflicts might be rectified with an honest conversation with your problem employee. However, it's a good idea to get your human resources department involved sooner rather than later. Oftentimes, human resources will require you to fill out a performance improvement plan (a.k.a PIP). Unlike a development plan, which covers broad ways an employee can improve their performance, a PIP is an official notice of probation.

4 Steps To A Successful Termination Meeting 

If your employee hasn't made the necessary improvements outlined in their PIP — or if they've committed unethical conduct — it's time to let them go. But, no matter how experienced you are, firing an employee is never easy. More times than not, emotions can run high during termination meetings.  Check out these four thoughtful ways to ease tensions. 

1. The Right Timing

Though it's easy to think there's never a "right" time to fire employees, most companies fall into one of two schools of thought: Firing an employee on Friday or Monday. Firing an employee on a Friday makes it slightly easier for your payroll department to calculate the employee's last paycheck. Plus, the employee's team members can have the weekend to process the change. However, many people argue Monday is the better option because it gives your former employee the opportunity to apply for new jobs as soon as possible. 

No matter which day you choose, have the termination meeting at the end of the day. Not only will it be easier to calculate their last paycheck, but it will also ease tensions at the office. Simply put, very few things can ruin company morale like seeing a colleague pack up their cubicle in the middle of the day. 

2. Keep It Brief 

Firing someone is like ripping off a Band-Aid. Instead of having a long, painful termination meeting, it's in both parties' interests to keep this tough conversation brief. If your employee continues to have performance issues, simply explain they did not meet the expectations outlined by the Performance Improvement Plan. If your employee has shown unethical behavior, tell them their actions breached the company's code of conduct. More times than not, an employee will react or share their take on the situation. While you can be an empathetic listening ear, reiterate their employment has been officially terminated. 

3. Enlist Human Resources 

At least one member of your company's HR department should always be present at a termination meeting—and for good reason. For starters, human resources can act as a mediator between you and your now-fired worker, which is important if the former employee does not take the news well. Additionally, human resources can confirm the effective termination date and share any important documents such as COBRA paperwork. According to the Consolidated Omnibus Budget Reconciliation Act of 1986, former employees can extend their health insurance coverage for a premium rate.

Once the meeting is over, your human resources representative can also escort the former employee to their desk to collect their things and leave the premises.  

4. End On A Good Note

Just because your former employee wasn't the right fit at your company doesn't mean you have to harbor any ill feelings. Unless your company is doing a round of layoffs, you should never feel pressured to apologize to your now-former employee. Instead, keep things cordial by wishing them the best of luck at all their future endeavors. It's a small, kind gesture that can end the meeting on a somewhat positive note.

Make Filling Open Positions Easy

After you fire employees, it's important to fill those open positions with eager, qualified workers. Fortunately, Hourly makes it easy to onboard new employees. Simply text your new employee a link to join Hourly, and they can add in all their information from their phone. Hourly also lets employers create custom rules like enforcing 8-hour days, 30-minute lunches, and setting mandatory start times. That way, you can rest easy knowing your new employee isn’t working overtime to get up to speed. 

Have questions? Reach out at (844) 800-2211 to learn more!

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