Pink Slips, Red Flags
Do you need to release a bad hire? Here are basics on the termination process from behavior triggers and pinpointing if termination is necessary to proper documentation procedures and warding off legal complications.
By Erinn Morgan

Surveys show that most managers know they've made a hiring mistake within 30 days but wait six to eight months to resolve the problem.

This is a bad decision. While turnover is costly, keeping bad employees on board is even more expensive. "Statistics indicate that the cost of a bad hire is three times that person's salary," says Daniel Abramson, president of Staffdynamics and speaker at Vision Expo's Business Edge program. "The costs include training, infecting the staff with bad morale, and upsetting customers or patients."

Managers should resolve bad hires quickly, and proper understanding of termination procedures and techniques is paramount. "In the optical profession, and others like chiropractic and family MDs, most managers don't know what to do when they have to fire someone in an office of four or five people," says Kevin Muir, managing principal of the Austin, Texas-based consulting firm Turnaround Central and author of The Employee Termination Guidebook.

Following these firing procedures can help ease a difficult process.

STEP ONE: WARNING SIGNS

Warning signs of a problem employee include tardiness and absenteeism, says Abramson, "Or they are confrontational and feisty, or they buzz out exactly at 5 p.m."

According to Muir, the top three reasons people fire an employee are:

• They are not performing their job properly/meeting expectations.
• They have poor attendance.
• They repeatedly break the rules. (See Termination Triggers sidebar, page 52.)

"If you fire for reasons other than these, you can potentially get into hot water," says Muir.

Most states have ruled that employers can fire at will. This means the employer can fire for any reason. Still, employers need to have a good reason and document it.

"If they want to file a suit, they probably can," she adds. "I recommend you assume that you can't fire at will--you have to have cause. And you need to have the proper documentation lined up."

STEP TWO: COMMUNICATE AND DOCUMENT

Following proper procedure will help you eliminate some of the stress and legal problems associated with terminations.

Set up a probationary period. A 30- to 90-day period for new employees will help facilitate firing, if necessary.

Sit down and talk. When employee problems arise, immediately sit down informally to discuss the problem. "Have a heart-to-heart and address it," says Abramson. "Say something like, 'I have noticed over the last couple of weeks that you have been a little bit grouchy. Is there anything I can help you with?'"

In situations where employees are caught stealing, immediate termination is acceptable, he notes, adding, "Otherwise, sit down informally so no one else can hear. Then write it up as a memo of record and put it in the his or her employee file."

Make it formal. If the poor behavior continues, then begin formal memos and meetings.

"Sit down again and say their behavior cannot be tolerated," he recommends. "Say if it keeps happening in the next 30 to 45 days, you may have to terminate them."

This meeting should be documented and placed in the employee's file--as should all subsequent meetings. "There can be a perception on the part of the court that if you didn't create the documentation, the problem didn't happen," Covey says.

"Put the documentation in the file; it will be accepted as a business record and will not be challenged."

Examine the legal angles. Employers should also look at the employee in question, says Amarillo, Texas-based Vicki Wilmarth, an attorney who deals with termination issues.

"When clients call me and want to terminate an employee, there is one main issue: Is the employee in one of the protected classes of discrimination by gender, race, or religion?" she says. "Even in an at-will employment state, I am concerned about the reasons for the firing."

This doesn't mean that you can't terminate an under-performing employee who is in a protected class. "I want to make sure the client has done due diligence and has documentation. I want to see some written warning that gives the employee time to respond and improve," Wilmarth adds.

STEP THREE: T-DAY

"Prepare ahead of time," suggests Muir. Before starting the day, have the following ready, he says.

• Have their final paycheck and COBRA notice for health insurance extension in hand.
• Have a witness in the room, if you can.
• Have packing supplies. Be prepared with moving boxes so you can allow the person to pack and quickly leave the area.
• Have an agenda.
• Have the termination letter ready to go and include the cause in the letter. "This should not come as a surprise to the person if you have been giving them warnings," he adds. "If the warnings are in writing, I'd have them in my file at the meeting. It shouldn't be any shock."
• Time it carefully. "Fire when its appropriate--don't wait. But if you do have some choice, it is better to do it at the end of the week, particularly on Friday. The person will have a support group to go home to. If you fire them during the week, everyone else will be at work," he says.

"I like to say that the employee has chosen to no longer work for the employer. I would say, 'I don't fire good employees. You chose not to work out.' It makes them take responsibility."

STEP FOUR: REACTION TIME

Worried about negative reactions by the employee to the termination? According to Muir, "A study was done by Cornell on reactions to terminations. The freaking out is a lot less than the manager or owner may think it will be, especially if they have been giving warnings."

Afterward, be aware of the following Abramson says.

Security. Change passcodes, Internet passwords, locks, etc.

Staff. Have a quick huddle meeting with the staff. Tell them what happened. "Otherwise, they will fill in the blanks. If they do, it will probably be wrong," he says.

End the discussion. If the former employee is going to sue, you don't want it coming back that something negative was said in a meeting.

Move on. Abramson notes: "Let the staff know it will be difficult until you hire someone else, but you know they will pitch in."