It is probably the worst part of any Financial Executive’s job, but sometime during the course of any career in corporate finance, you are going to have to fire someone. It is bad enough knowing that you have to tell an employee that he is losing his livelihood. It also means another round of recruiting, hiring, on-boarding, and training that will cost the firm money, time, and productivity.
The cost of keeping a poorly performing employees is tremendous, and the ripple effect is seemingly never ending. Many companies cite the primary reason for not letting employees go that are clearly not performing up to standards due to the fact that they simply do not have the resources to back-fill the employee and they feel that a sub- par employee is better than no employee at all.
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Firing an employee is never pleasant, but by adhering to several guidelines, leaders can get through the termination process with as little awkwardness as possible – and without opening the company or its personnel to potential lawsuits:
- Document everything. First, make sure you record all incidences of job under-performance, no matter how seemingly insignificant. Tardiness, insubordination, failure to meet deadlines, or non-compliance with dress codes must be documented, and records of progressive disciplinary measures must be on file. By crossing all the T’s and dotting all the I’s, you will show that the employee has received due process, and his termination is being done by the book.
- Get to the point. Meet with the employee in a quiet, private location. Directly tell him that he is being terminated for performance reasons, and that the decision is final. It is OK to be compassionate, but do not give the impression that you might be persuaded to give him a second chance. If you have followed guideline # 1, the employee should not be taken by surprise. He will know his performance has been below par.
- Take care of business. Know before going into the meeting what needs to happen next, and communicate those steps to the employee. Your company probably has a policy for reuniting fired workers with their personal effects, filling out COBRA paperwork, and compensating them for vacation days not used. If it does not, implement one now, and follow it to the letter. These housekeeping steps may be better handled by a representative from Human Resources, rather than the employee’s supervisor.
Even the most diligent company cannot bat 1.000 when it comes to hiring the best candidate for every job. Skills claimed on resumes don’t always materialize on the job. Charming interviewees can fail to display tact with co-workers. Strong supervisors quickly assess these problems and eliminate them before they infect the rest of the workplace. In most cases, good managers should never have to surprise an employee by terminating them. If you have meticulously cataloged an employee’s shortcomings, not only are you covering yourself from a legal standpoint, but you are also ethically giving your employee every chance to succeed, and providing them with clear communications when they are not performing up to company standards.
No one should ever be truly surprised when terminated, and conversely, all employees should clearly know where they stand at all times. It is one of a managers most important roles to let their direct reports know what they need to do to excel in their roles, and when they fall short, then need to know when that happens, what they need to do to rectify the situation, and the repercussions of what will happen if they fail to do so.