How to Terminate an Employee the Right Way

Terminating an employee from service is not in any day a cake-walk for any employer. It requires tact, level headedness, compassion and adhesion to procedural formalities.

Need for terminating an employee can happen on account of several causes. Some of them are:

1) Employee’s misbehavior / breaking rules/ stealing or such disciplinary reasons

2) Employee inefficiency

3) Business loss/ closure of a specific business activity / Economy drive

4) Egoistic reasons

The way of handling the termination of the employee will have to be suitably fine-tuned with the reason for termination of the employee.

1) Terminating an employee on account of misbehavior / disciplinary reasons

When this extreme step is to me taken, haste is the last thing that an employer can afford; the termination should ideally follow a suspension first. While a suspension may take place in haste, the termination cannot. The extreme step of termination must be done only after conducting a fair inquiry and creating necessary procedural and documentary evidence, so that in the event the employee challenges termination in a court of law, the employer must be fully ready to defend it legally.

It is extremely important that the employee, at the time of entering into service has signed a service contract which lists out the terms under which the employer has rights to terminate the services. As long as the conditions are clear and the actions verifiable, termination can be done confidently.

Depending on the severity of the employee’s misbehavior leading to termination, the final handshake can be either very diplomatic or cold.

In some cases, in order to give a smooth exit to the employee as a face saving grace, asking the employee to submit his resignation rather than terminating the service could be more humane and diplomatic. Likewise, the employer can also behave magnanimously by giving a service certificate (that the employee was in the firm’s service for so-and-so period) in order to help him/ her to seek the next job.

2) Terminating an employee on account of inefficiency

Sometimes employers recruit people in haste and regret their act in leisure. Before terminating an employee on the grounds of inefficiency, an employer must satisfy himself on a few things:

• Does the decision about inefficiency have any bias or malicious intent?
• Is there any deficiency in training up the employee or in deploying him / her at the right slot?
• Is there any scope for fitting him/ her in some other job profile where there is scope for him/ her to shine?
• Has the employee been denied of any reasonable extra time to try and improve himself/ herself?

When the answer is no to all these questions, then the termination can be gone through. However, it will be better that the hand shake is done graciously, by diplomatically and sympathetically explaining the employee the reason for termination, taking care not to bluntly hurt the employee’s tender ego.

3) Terminating an employee due to business loss, business closure etc

Yes. It is an extremely painful decision, whatever be the cause that triggered the extreme step of terminating the employee(s). What is very important in such a situation is that there should never be a surprise element in effecting the termination. Also, rumor mongering should be avoided. Here are some recommended steps:

• At least a month before putting such an inevitable decision into action, the management can send personalized newsletter to all the likely-to-be-sacked employees about the facts and figures of economic difficulty the company is facing and hinting an imminent possibility of down sizing.
• Such a communication should also clearly, but gently state the legal right the organization has to terminate employees, by quoting the appropriate class in the terms of contract.
• The newsletter should also advise the staff to start immediately looking for alternative jobs.
• The company should specifically name a few persons in the HRD department as counselors who can be contacted for any clarifications, advice or any other job related issues.
• The counselors should be hand picked by the management and adequately groomed to be highly patient and sympathetic to the employees who may contact them under panic and try to whip up emotions.
• It should be ensured that all dues payable to the terminated employees are settled in full and correctly when the relieving letters are given.

The last possibility, about terminating an employee purely on egoistic reasons need not be discussed here. Which employer, who has the audacity to terminate the services of an employee purely out of egotistic equations, will ever listen to sober counseling?