Human Resources

How To Properly Terminate An Employee – Blog Series Pt.1

Hey Compliance Warriors!

Welcome to a special ten-part series on employee termination. Letting go of an employee can often be a difficult process to take on from determining the cost-benefit of terminating an employee to documenting the deciding factors leading up to the termination. And of course, the laws can be different for these things depending on the state in which you live. This series will give you practical insight into what you need to know and the steps you need to take before terminating an employee.

“You have to be responsible when you’re running an organization; and firing people who are your friends is part of that responsibility.”
   -Ben Horowitz

Part One: Placing an Employee on a Performance Improvement Plan (PIP) Before Firing
   An employee performance improvement plan (or PIP), also known as a performance action plan, is a great tool to help employees that are struggling with performance, while still holding them accountable for their past mistakes.  A PIP can help managers and employees determine a pattern of performance and can identify areas that may need more improvement than others.  Through feedback and one-on-one communication,  PIP should guide the employee toward the right track and away from any poor performing behaviors.

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   The first step to creating an effective PIP is to establish why the PIP is being implemented and what the employee should gain from it.  Typically, PIPs are put in place when it is shown that an employee is performing poorly and will need some form of improvement before moving forward with other forms of discipline.  The PIP should be specific as to what areas need to change or improve and should create some sort of outline for the employee.  The manager should discuss with the employee why their performance needs to change and what will happen if it does not.  Outline the path of consequences that can occur if there is not improvement, including termination.

   After the PIP has been fully explained and the benefits as well as consequences have been defined, the manager should ensure that the employee understands why they are being placed on the PIP and if they know what is expected of them.  Once the employee has been notified of their placement on a PIP, the manager should ask the employee if they have any initial questions or have any feedback they’d like to offer up front.  Some employees may wonder why they are on a PIP for certain behaviors and will need clarification on what actions are not working for them and what areas of behavior will need to change.  The manager should always obtain some form of confirmation that the employee understands why the PIP is necessary and why they will need to participate.

   The manager should bring out the basic guidelines of a PIP and should explain to the employee why the PIP is being utilized for them.  While some actions are created by the manager for the employee to follow, it is important that the manager include the employee in ways of creating solutions to the problem at hand.  Ask the employee how they think the problem can be resolved and how they perceive putting their plan into action.  If the employee is unsure how to handle the situation or how to improve their problem, offer feedback and advice, but don’t answer the problem for the employee.  Allowing the employee to take place in their own PIP and define ways they are capable of improving themselves allows them to have a greater stake in the plan and will feel more confident about undertaking the massive changes outlined for them.

Be Grateful
    Managers know that a PIP is best used for creating improvement methods for employees that are showing poor performance in certain areas.  PIPs are most commonly associated with employee problem areas.  However, when discussing a PIP with the employee, it is important to also include forms of praise and positive feedback as well as problem areas.  Acknowledge the employee’s prior achievements and give credit to their previous positive behaviors.  Let the employee know that while you can recognize the good work they have done for the company, their recent behavior or performance has caught your attention and needs to be corrected right away.  Employees will be more likely to fully participate if they know that their positive qualities are being noticed by management, and not just their negative aspects.

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Practical Illustration
   Joseph was reviewing one of his employees, Yvonne, and noticed a trend of poor performance on her telephone surveys.  She was taking too much time to complete the survey and was not gathering enough information from the caller.  Joseph called a meeting with Yvonne to assign her to a performance improvement plan, or PIP.  Once in his office, Joseph reviewed the information he had with Yvonne and outlined what areas she needed to improve while on the PIP.  Joseph made sure to compliment Yvonne on her great customer service skills and praised her ability to connect with the customer during her surveys.  He asked her how she thought she could improve the problems she was having.  Yvonne offered suggestions such as altering her script and learning better ways to lead the customer through the survey.  Together, Joseph and Yvonne created a PIP that would help Yvonne improve her scores over the next six weeks.  When finished, Joseph warned Yvonne that if she was unable to improve her scores within their timeframe, further disciplinary actions would occur and could lead to her eventual termination.


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Lisa Smith is CEO of Andere Corporation and Chief Content Developer at HelpDeskSuites.com. Follow her on Twitter, connect with her on LinkedIn, listen to her Small Business Spoonfuls Podcast, and find more in her Compliance Warriors Facebook Group.

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