6 Signs It’s Time to Terminate an Employee

Signs it’s time to fire an employee

So how do you know if you should give your employee another chance or if it’s best to cut ties with that person altogether? Here are six signs that it may be time to terminate an employee. 

1. Productivity is down in the organization.

A productive business is a successful business. If your business productivity is down, it may not be because an employee is slacking. However, reduced productivity is still a strong sign that something is wrong. 

If a certain employee is constantly struggling more than others or frequently misses their deadlines, it may be a sign they aren’t up to the job. Most companies allow for warnings and reminders in situations like this. However, if you’ve given an employee numerous chances and enacted a performance improvement plan that hasn’t panned out, it may be time to let that person go.

“When I spend more time managing an employee than the business, then it is time to let them go,” said Andrea Donnor, executive coach with The Souleil Group. 

Donnor said she asks five questions before making the final decisions:

• Are their job duties clear and did they receive clear performance expectations?
• Did they receive adequate training?
• Did they have a mentor or buddy available for questions?
• Along the way, did they receive timely feedback about deficits and specific coaching on how to improve their performance?
• Did I document performance gaps and coaching conversations over a period of time?

If the answers to those questions are yes, Donnor said it may be time to part ways with the employee. 

2. The employee is a central figure in office drama.

Some people thrive on office gossip, drama and pot stirring. This behavior creates a hostile and challenging work environment, leading to insubordination and a lack of trust. Over time, after constantly being pitted against one another, employees may have difficulty working together. 

Unfortunately, some employees enjoy starting rumors, bad-mouthing management and finding ways to cause trouble. These people are toxic to your organization and are unlikely to change, regardless of how many warnings you give them. 

3. The employee is static and unwilling to grow.

If employees aren’t willing to train, pursue professional development or improve themselves to keep up with others, they’ll be left behind. Employees who can’t keep up will drag you down.  

If they don’t want to fix their mistakes or work to improve issues stopping them from being valuable team members, then let them go. Sometimes, people do not have the business skills needed to push your organization ahead, which means they’re holding you back.

4. Customers, vendors or co-workers are complaining.

You can’t afford to keep someone around who is creating issues for your customers and vendors. According to Dixa, 39 percent of consumers won’t frequent a business after just one bad experience, and 95 percent will share their negative experience with others. 

Most people won’t come directly to management to address a bad experience. If you hear about it, you’ve likely already lost business. You can’t let a problematic employee affect your bottom line. 

5. The employee is violating company policy.

Sometimes, employees unintentionally break the rules. However, if they’re consistently breaking rules even after being reprimanded, they just may not care. In some cases, you can institute a three-strikes policy. Other times, a single violation is enough to indicate the employee has to go.

“When an employee engages in gross misconduct — actions that are illegal, unethical or inappropriate and violate company policy — there are typically clearly-stated repercussions in company employee handbooks which would include grounds for dismissal,” said Mary Rose Wild, founder and CEO of AvalonLane Partners. 

When it comes to criminal violations and safety offenses, no employee should be surprised that they’re getting fired. However, every employee should be well aware of your business’s policies and the penalties for breaking them. Examples of critical policy violations include weapons in the office, theft and substance abuse. 

6. The employee is frequently late or absent.

Occasional tardiness happens to everyone. However, when tardiness and workplace absenteeism happen repeatedly, you have a right to take action. While you should have a time-off policy, every absence costs you money, which hurts your business.

“Don’t rush the decision but don’t drag it on forever, either. Take your time, gathering information, considering all angles, and giving the employee a fair chance,” said Gary Gray, co-founder of Coupon Chief. “This could just be a very important wake-up call for them and they may just surprise you and come back working harder than before. Be open to that possibility.”

How to terminate an employee

Here are five steps you can take to terminate an employee. 

1. Document issues and warnings.

Before terminating an employee, you’ve likely given them ample opportunities to improve and stay with the company. It’s essential to document any issues that have arisen and how you handled them.

“Document every performance issue, feedback, and coaching given,” Donnor said. “Be balanced. Very few employees are 100% bad hires. Keep some of the kudos they received. If they challenge the termination they will have those receipts. You want to have them too, to acknowledge that yes, some things went well, but overall these are the deficits that are driving termination.”

Every time there’s an incident, write down the date, what happened and any warnings you gave the employee. Written documentation proves you made every effort to work with the employee before firing them.  

2. Conduct a pre-termination review

Once you’ve made the decision to terminate an employee, review everything to make sure the decision is the right one before moving forward. This should include verification of the reasons you intend to fire the employee and a legal review to make sure you’re in compliance with the law. 

Ask yourself hard questions about whether the termination is legitimate and nondiscriminatory under the letter of state and federal law. Make sure you also have clear evidence in your documentation to support your decision. Always include legal counsel and HR professionals in this process to make sure you’re approaching everything in an airtight way.

3. Schedule and conduct the termination meeting

When the time comes to actually terminate the employee, prepare all necessary paperwork and schedule the meeting. This should include a termination letter, final paycheck details, information about benefits continuation, and instructions on how to return company property. 

Make sure to schedule the conversation in person or over video call for remote employees — never just send an email or a text message. When terminating an employee, show them the respect by making face-to-face time to explain the decision and allow them to ask any questions.

“In terms of handling the termination discussion, managers should plan for an in-person conversation when possible and this includes choosing a private, closed door location for the discussion and involving HR or a witness if necessary,” Wild said. “Managers should be direct, brief and compassionate in delivering the message, while also being clear about the reasons for termination.”

Bring a checklist to your exit interview to stay focused and on-topic during the meeting. Explain why you’re terminating the person, and give specific examples to support your reasoning. You should also let them know what will happen to their healthcare, 401(k) plan and any other employee benefits the company provides. 

5. Let the terminated employee ask questions.

Let the person you’re terminating ask questions, and answer them as honestly as possible. Everyone reacts to a termination differently, so let the person process the news how they need to. However, it’s best to avoid arguing or getting defensive. 

“Compassion and empathy are essential,” Wild said. “While the manager may feel frustrated now, it’s important to remember that they initially hired the employee with hope and optimism, believing they would be a valuable addition to the team.

“When approaching terminations, I used to frame it this way: ‘the employee is not finding success here, and the situation isn’t working well for either side. By parting ways, we’re giving them an opportunity to find a role and an environment where they can thrive,’” Wild added.

Tejas Vemparala and Justin Walker contributed to this article.