By Jim Sobeck
Terminating underperforming employees is one of the most distasteful parts of management. No one likes to do it, but not terminating poor performers can lead to the demise of your business.
In my over 40 years in business, I have terminated a lot more people than I would like to admit. Many of the terminations were my fault because I never should’ve hired some of those people in the first place. However, as distasteful as terminations may be, I have found it’s not the people you terminate that make your life miserable, it’s the ones you don’t.
I’ve never terminated someone and regretted it. The only regret I have ever had is that I didn’t do it sooner. Years ago I saw a survey that showed most managers know they have made a hiring mistake within the first 30 days — but it takes about one year to terminate someone you recognized as a bad hire.
Why is that? I think there are many reasons:
- Not wanting to admit to your employees that you made a bad hire.
- Not wanting to have to go through the hiring process again.
- Not wanting to have to meet with the underperforming employee and terminate him or her.
- Not wanting to pay severance.
- Not wanting to worry about a wrongful dismissal suit.
Of those reasons, the most valid one for dragging your heels on terminating someone is worrying about a wrongful dismissal suit. Even if your state is a “right to work” state, which ostensibly gives you the right to hire and fire at will, you still need to worry about wrongful dismissal suits, especially if the person you’re terminating is in a “protected class” (over 40, a female, a minority or disabled). The worst possible scenario is that the employee is all of the above.
The best way to protect you and your company from a wrongful dismissal suit is to “build a case” prior to terminating the employee. By this I mean taking the following steps:
- Noting in an annual or quarterly review form that the employee’s performance is substandard and needs to improve or the employee may be terminated. Be sure the employee signs the form.
- Putting the employee on probation and giving a series of goals that must be met within a reasonable period.
- A series of written warnings signed by the employee.
- Holding counseling sessions with the employee to help him or her meet the goals he or she has been given.
If you terminate someone in a protected class after taking some or most of the above steps, your chances of losing a wrongful dismissal suit are much lower. I also recommend that you consult with a labor lawyer prior to terminating anyone in a protected class.
If you terminate someone in a protected class without taking the above steps, in addition to a wrongful dismissal lawsuit, you also have to worry about an Equal Employment Opportunity Commission claim. The EEOC was established to protect the rights of people in protected classes, and losing a case brought by the EEOC is no fun. So no matter how anxious you are to terminate an underperforming employee, if they are in a protected class you need to proceed with extreme caution, and with the benefit of professional advice.
Jim Sobeck is CEO of New South Construction Supply, a building products distributor based in Greenville with nine locations in the Carolinas and Georgia. He is the author of “The Real Business 101: Lessons From the Trenches.”