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Seven steps to an effective termination

Terminations are inevitable within any organization. And knowing how to terminate employees in a way that preserves their dignity while meeting the objectives of the organization is important.

 

Although having clearly defined procedures will not make the termination process any more pleasant, it could prevent you from making costly mistakes. Here are seven steps that can help you conduct a smooth and straightforward termination.  

 

1) Be prepared. Plan what to say and have everything ready before the discussion. Write a separation letter that includes the termination date and the reason for termination. Develop a checklist for all termination items to be covered including: notification details of benefits available to the employee (COBRA, severance pay, outplacement counseling, use of office and support services, etc.); list of any company assets or property that should be returned by the employee; final pay including unused paid time off, reimbursable company expenses, etc. (many states have statutes requiring final wages be paid to terminated employees on the final day of work). Also, include a breakdown of the final check as well as severance, benefit and outplacement information. Make sure that you’re prepared to answer all the typical questions an employee may ask.

 

2) Have another person present. Ideally, the department leader and an HR representative should be present. If an HR representative is unavailable, ensure another manager is present. This will provide two sets of eyes and ears (and notes, if necessary) in case of later allegations. It can also prevent potentially hostile reactions by disgruntled employees. Make sure the additional person knows his or her role and has been briefed on how to respond to any comments.

 

3) Be conscientious of timing as well as where you conduct the termination. It’s best to conduct a termination toward the end of the day, or when it’s fairly certain the employee will be able to collect his or her belongings without an audience. It’s also normally best to conduct a termination during the first part of the week (Monday through Wednesday). This gives the employee time to begin the job search or apply for unemployment. Never notify someone in a public place or where the discussion can be overheard or seen. Respect the dignity of the employee.   

 

4) Get right to the point.  Keep the meeting short and focused (10-15 minutes at the most). During the termination discussion, use facts to tell the employee why he or she is no longer working for the company. Inform the employee that the decision is final and indicate when the termination is effective. Do not defend or blame yourself or the organization. Do not get into a confrontation, debate or detailed explanation. Transition the conversation to what the employee is entitled to. Present the separation letter and explain any severance, benefit and outplacement information. Give the employee details on whom to call with any questions and proceed to collect the company’s assets and complete the items on the checklist.

 

5) Ensure that only personal property leaves the building. After allowing the employee to gather his or her belongings, escort the employee off or observe the employee leaving the company premises to verify protection of company property. If appropriate, change or disable security passwords, locks, network access, voicemail access, bank transfer and PIN numbers.

 

6) Document the meeting and communicate the essentials of the employee’s departure. Follow up with a letter to HR confirming the details of your conversation. It may be necessary to refer back to the document at a later date. Inform immediate co-workers, subordinates and clients of the employee’s departure. Communicate the fact that the employee no longer works for the company and outline how his or her duties will be covered going forward. Avoid details about why he or she was let go; it is unprofessional and could have unpleasant legal repercussions. 

 

7) Have a clear company policy regarding references. Poor handling of reference requests could result in either a defamation lawsuit or a number of other issues. Employers should designate who provides reference details and limit the amount of information provided in the response to reference requests. The limited information includes only the employee’s dates of employment, position held and salary. 

 

In some cases, employers provide detailed information about the employee’s performance. However, if the employee signs a reference release, from a legal perspective, the release doesn’t always provide sufficient protection. A former employee could allege that you lied with malicious intent so the effectiveness of a release could be problematic.

 

Develop a clear policy on reference requests, and communicate it to all members of management. This will help protect your organization against unauthorized references and confirm that the policy is uniformly applied.

 

These seven steps won’t guarantee an enjoyable termination process, but they can make it less traumatic for those involved. Finally, remember to consult legal counsel if the termination shows potential for legal ramifications.

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Published by Reed Tinsley CPA
Copyright 2008 Reed Tinsley CPA. All rights reserved.
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