Employee Terminations: Humane Treatment Can Benefit the Bottom Line

Abstract: Employee terminations are an unfortunate but necessary part of every business operation. Managers need to prepare carefully for exit procedures that provide a clean break with departing individuals while maintaining staff morale. Adopting an empathic approach can assist terminated employees in their transition while upholding the company’s reputation.

You’ve tried everything to get Andy up to speed. Despite your best efforts, though, his job performance remains poor. You’ve reluctantly decided it’s time to let him go. But how can you fire Andy without hampering his career, demoralizing the remaining staff, and upsetting the customers with whom he’s worked?

Very often the difficulty in answering that question delays the scheduling of a termination meeting — famously the least popular management duty. Managers can hesitate to take action anytime a company needs to terminate personnel—whether for job performance failures, violation of company policies, chronic absenteeism, or as part of a reduction in force required by re-structuring.

Maybe termination is an unwelcome task, but it’s important to move sooner rather than later. “Sometimes you just have to cut your losses,” said John Tschohl, president of Service Quality Institute. “Delays only make the problem worse and can result in a hit to the bottom line.”

Show empathy

Thankfully, there are a number of ways a manager can smooth the rocky road to termination. One is to exhibit an understanding of the emotional trauma termination can have on the affected individual. “Demonstrating empathy to exiting employees reflects healthy company values and has a profound impact on business culture,” said Stephanie Reitz, Director of Client Services at consulting firm myHR Partner. “The remaining staff will feel better about where they work and will be encouraged to stay aboard.”

Botched terminations, on the other hand, can damage retention and recruitment efforts. “Employees who observe callous treatment of terminated workers may think, ‘Maybe it’s time for me to seek other opportunities with a better, more respectful company,’” said Cissy Pau, principal consultant at Clear HR Consulting.

Poor treatment of departing employees can also lead to damaging word of mouth and negative online reviews that make it tough to attract future hires. “Job candidates today are extremely well-informed,” said Reitz. “Accepting a job offer is no longer just about a prospective paycheck. It’s also about the experience, the culture, and about how people are treated throughout the entire work life cycle, from onboarding until the time they walk out the door.”

One more thing: Angry or upset terminated employees may seek relief in legal action. “People who are treated in a way they find insulting, aggravating, cold or callous, are far more likely to go to a lawyer and see if there’s something they can do about it,” said James W. Seegers, partner at law firm Baker & Hostetler.

“Treating people with respect and a little bit of compassion can help de-escalate emotions. And keeping just a few people from seeking out lawyers will save a company a lot of money.”

Related: How to Attract and Retain the Best Employees

Maintain privacy

No performance-related termination should come out of the blue. “Prior to letting an employee go, there should have been one or more meetings during which the supervisor discussed performance issues and detailed what the individual needed to do to improve,” said Thomas W. Slattery, a San Diego-based attorney. This graduated approach not only communicates fair treatment, but also helps defend against any charge that the termination was done for reasons other than poor performance.

Advance preparation is also necessary for cases in which the employee has violated company policy. It is critical to lay the groundwork by thoroughly investigating the misdeeds. The results of such investigations should be recorded in written reports.

Chronic absenteeism, too, needs to be adequately recorded. Here, past attendance records of the individual will speak for themselves, as will copies of written warnings given the employee over time.

Whatever the cause, when the decision is made to separate an employee, practice makes perfect—or at least reduces the chance for costly errors. “Rehearsal is essential for a successful termination meeting,” said Pau. “Plan what you’re going to say. Practice your script with another company manager to evaluate its effectiveness.”

Empathic employers will schedule termination meetings in locations that minimize the risk of embarrassment. “Avoid any public place where everybody can see that a termination is taking place,” said Pete Tosh, Founder of The Focus Group. “The employee’s office is a good choice because it is private. And if they’ve got just a few personal things, they can just pick them up and leave.”

If the employee does not have a private office, it’s wise to schedule the meeting in a conference room or other private setting. “To minimize observation by colleagues, offer to make arrangements for the individual to come into the workplace one evening or on a weekend to remove their personal belongings,” said Tosh.

The termination meeting is no place to engage in small talk, negotiate a resolution to the employment crisis, or argue about the person’s work history. “One of the biggest mistakes companies make in an exit interview is getting into a debate with the employee about their past performance,” said Seegers. “The approach should be that the termination decision has been made and now that decision is simply being communicated.”

The manager should not be overly apologetic or give too many unnecessary details that can complicate and prolong the process. “A supervisor who has gotten angry about some past deed should avoid the temptation to make personal comments or try to ‘get even,’ so to speak,” said Tosh.

Bonus tip: If the employee must return to their work area at the conclusion of the termination meeting, a management representative should accompany them to discourage conversations with colleagues.

Plan the future

Despite the desirability of keeping the departure meeting brief, a rushed job can create unnecessary distress. A common error is not addressing and communicating separation logistics. “The terminated employee should leave the meeting with a clear understanding of what to expect next,” said Reitz.
To clear a path forward, the manager should prepare answers in advance for commonly encountered questions such as these:

• Do I work the rest of the day?
• When can I get my personal belongings?
• Do other employees know about my termination?
• What should I say to my customers?
• What should I do about appointments I’ve scheduled for the rest of the week?
• What about my email?

Ideally, the manager will present the final paycheck at the termination meeting. This practice communicates an effort to make the process as easy as possible and gives the worker an opportunity to ask questions about the dollar amount without having to call later.

“The departing individual should be given clear details about how their final paycheck was calculated, any severance package, and the availability of continued benefits,” said Slattery.

The employer can help the terminated worker plan their next career step by providing a reference letter, or at least the name and contact information for someone who can provide references. “If possible, provide a connection to an outplacement service company that can meet with the employee to help with such tasks as preparing resumes and dealing with job boards,” said Tosh.

Bonus tip: It can be prudent to give the employee a letter which details everything discussed in the meeting. “Very often the employee will be in shock about their termination, with the result they don’t listen to, or forget, what you say,” said Pau. “It’s important to have everything written down.”

Move forward

What information should be shared with the remaining employees? Managers need to avoid invading the departing worker’s privacy by stating why the person left. Mindful of the risk, some managers are tempted to say nothing at all. That can create morale issues. “I’ve seen organizations where a person disappears and nobody knows anything,” said Reitz. “That can create paranoia, and lead to rumors spreading like wildfire.”

A generic statement is best. “I usually recommend sending a company-wide communication that acknowledges the individual is no longer with the company and that everyone wishes them the best of luck,” said Reitz. “If asked why the individual left, it’s wise to say something like ‘Well, that is not important. What is important is that we wish them well.’”

Bonus tip: If a small group has worked closely with the departing individual, it can help maintain morale to bring them together in a private meeting to announce the departure.

Keep in mind that the exit interview will be the last personal interaction the terminated individual has with the company. While the meeting can be stressful for everyone involved, proper planning and a professional attitude can help smooth the process. Treating the individual with dignity, and maintaining a professional and helpful manner, can go a long way toward enhancing the company culture and reputation.

“I don’t believe there’s any perfect way to let people go,” said Slattery. “I would defy anyone that walks on the face of the earth to find me a person who says, ‘Oh yeah, I got fired from my job for exactly the right thing at exactly the right time.’ The best a manager can do is be kind and gracious about it.”

Phillip M. Perry is an award-winning business journalist based in New York City. He covers management, employment law, finance and marketing for scores of business magazines.