STOP! DON’T FIRE JUST YET!

Do’s & Don’ts to Review Before You Suffer the Expense of Replacement

Is there a right or a wrong time to plan an employee termination?

Is there a right time to fire someone?  The wrong employee in the wrong job can be expensive but a manager needs to be clear about the reasons a termination might be appropriate.  Obvious infractions aside, like theft or chronic absenteeism, making sure you have allowed for improvement or change can be vital in reducing liabilities for an employer and avoiding painful misunderstanding and loss of relationship.  Maybe there isn’t any single right time to remove an employee, but there certainly can be a wrong time.  Consider the following before you hold the discussion to terminate an employment relationship.

What is the true expense of hiring a replacement?

Recent surveys estimate costs of hiring a new employee to run between 40% and 200% of the base annual salary of the employee.  The more technical and specific the training for the job, of course, the more expensive the employee is to replace.

For a moment, let’s just assume that the estimates for hiring a new employee are high, by double, than in your company for the position in question.  That means if you are replacing a $60,000 per year employee the value of your decision is, at a minimum, $12,000 (20%) off the bottom line.  Probably, though, that amount is too small.  Still, that is a considerable expense to put on the table, especially if your reasons for the dismissal are not valid.  It is even more so if good documentation and preparations for the termination interview have not taken place.

If the dismissal is inevitable, then it should be professional, rock-solid, and without any wrongful dismissal or other moral or legal faults.  It should also take into consideration the possibility of a gross misunderstanding of the particular situation both from the employee and the management points of view.

Before you terminate, check to see who has the fault for the employee’s shortcomings.

What if the problem isn’t with the employee but with a supervising manager who is lost in his or her inexperience or simply exercising poor judgment?  The first step in the termination process should be to evaluate if management has done all it can do to correct the shortfall in the employee.  In today’s stockholder-conscious, cost-cutting business environment many companies are forcing decisions with such speed that upper management cannot always be sure if middle management really knows what it is doing.  In such cases, it is not uncommon for an employee to be notified of a perceived shortfall in performance or to be placed on probation without the employee even being aware there was a problem.

Such lapses in communication are all too common even in our most developed and stalwart corporations.  One reason is rapid growth within a company.  Another reason is that in the past few years many American companies have conducted mass layoffs and forced retirements, trimming experienced management and outsourcing key and vital processes overseas.  As a result, many skilled employees and managers have been dismissed leaving a management team that is often new, inexperienced and without the life skills to make sound judgments.  This newer generation of managers is often ill-prepared to handle the personnel problems that were not too long ago considered to be the specialty of human resource and organizational management professionals.

What’s first?

Here are five items a superior manager would examine before even considering termination:

• Does the employee have the right set of skills for the position he or she is presently assigned or could the person be reassigned?
• Has the company done what it can to assure that training for necessary skills has been made available and provided to the employee?

• Has management helped establish for the employee documented goals, expectations and job descriptions?
• Does management regularly provide performance reviews and employee feedback—hopefully at least twice each year?

• Does management provide improvement plans following the review that include dates for follow-up, re-assessment and feedback?

What’s next?

Once the self-evaluation of management is complete, the preparation for the dismissal can then take place.  Here are five items to review that will help you protect your investment in replacing the individual so it is carried out properly and needless re-work can be avoided:

• Keep records.  Organize a file indicating management communication with the employee attempting to remedy the situation.
• Document specific conversations addressing specific situations that need remediation.  The key word here is specifics.

• Give him or her a chance to improve performance as outlined in the performance reviews mentioned earlier.  If one has not been given, give it.
• Provide any training that may be lacking for proper skills development.

• Keep a log in the file of any and all incidents.  Preferably, a log should show six months’ activity, but three should be a minimum.  Don’t be in a hurry; this is an expensive decision.  Avoiding an unnecessary replacement is a top priority.

There are, of course, many grounds for immediate dismissal within any company.  Reasons such as chronic absences, theft or misuse of company assets head the list.  Failure to adhere to rules, policies and prohibitions would also be included.  Such reasons are the easy ones.  In the gray area of perceived poor performance, as we’ve discussed here, a superior manager’s real skill in people management must shine through.

For more information about how we can help you with your Human Resources and hiring processes, call us at 888-700-8512, request a proposal or contact us.