Sooner or later, a business owner will have to terminate an employee.
Terminating an employee’s employment is an unpleasant task because no one loves to let employees go.
For one thing, it takes a lot of time and other resources to replace employees that leave the organization.
How about the subsequent training and onboarding process for the new employees?
This also takes a lot of investment on the part of a business owner or entrepreneur.
Additionally, when you have to terminate employees, it leaves a gaping hole in your business that needs to be filled.
It might take a while to get the right candidate(s) to fill the void left by a dismissed employee.
During this period of searching for a replacement, a lot of pressure would be on your workforce, and employees might have to work extra hours and take on added responsibilities.
This might drain your employees’ energy and also adversely affect their productivity.
Despite the various demerits associated with employee termination, it is something that every business will have to face at one point during operation.
This is because there are grounds for terminating an employee’s contract in your organization.
Also, when you fail to terminate an employee’s contract on those grounds, it might cause more harm than good for the company.
Therefore, regardless of the relationship you have with an employee or whatever you have invested in them, you need to let go of such employees.
But before we go into that, let us learn what it really means to terminate an employee’s contract.
What Does it Mean to Terminate an Employee?
Employee termination means to terminate employment/an employee’s working contract with an organization.
You can also define it as officially calling off an employee’s job in your organization.
When you hire an employee, you’ll give them a contract as a staff of your organization.
You’ll also task them with certain duties and responsibilities which you’ll pay them for.
However, as an employer, you can terminate an employee’s contract based on credible reasons.
This type of termination is referred to as involuntary termination.
However, it is worth noting that termination of employment is not always involuntary, and some are voluntary in nature.
Voluntary termination of employment is when the employees themselves resign from your organization.
Employees might decide to leave your company owing to several reasons.
Some of these might be; personal problems, poor work benefits, an unhealthy work culture, lack of growth or bad leadership e.t.c
However, going by the context of this article, our focus will be on involuntary termination.
We will be looking at the termination of employment by the employer.
Let us now consider some of the reasons that might warrant terminating an employees’ contract.
Reasons to Terminate an Employee
As an employer, you have the prerogative of hiring and firing employees.
However, you should be careful.
You should honor and respect the contract you have with your employees.
It is not uncommon, however, to hear of situations where some business owners opt to terminate employees at will and without justifiable cause.
As an employer with good business ethics, you should not be guilty of this unfair treatment of employees.
Hence, we will show you some of the justifiable reasons for terminating employees.
While these may not necessarily be reasons for terminating an employee’s employment, they are still grounds for termination.
Some of these reasons are:
Consistent Poor Performance
This is one of the main reasons why employers might decide to terminate an employee’s employment.
Why is a poor performance that serious to the point of warranting termination?
Well, the goal of running a business is to make profits.
Also, to reach this goal, you decided to source out the best hands to handle different responsibilities in your organization.
This is because you understand that your employees are very integral to reaching your business’s goal.
Therefore, there is a certain level of performance you demand from employees.
If you have employees who constantly put in poor performance, it can stifle productivity.
It can also prevent the entire organization from reaching its goals.
However, it is important first to offer correction in this area and give time for implementation before termination.
Termination is usually the last resort after all other options have been exhausted.
Lack of Respect for Designated Authority
In every organization, there is always a hierarchy of authority that employees are expected to respect.
This starts from the CEO or Director of the company to the manager(s) and various departmental heads or supervisors.
If you have an employee who is fond of disrespecting their superiors in the office, it is a bad trait.
They might show this disrespectful attitude by speaking back at senior staff or throwing tantrums.
It could even be using insulting language when addressing those in authority.
Another sign of insubordination from employees is deliberately and stubbornly failing to carry out designated duties and responsibilities.
Of course, as a first step, it would be practical and beneficial to reprimand an act of disrespect from an employee.
However, when that attitude becomes too frequent and the employee shows no sign of improvement, it can lead to termination.
Dishonesty/Lack of Integrity
When it comes to moral ethics to have as a good employee, honesty and integrity are right there at the top of the list.
No doubt you want to work with trustworthy and reliable people and speak the truth at all times.
Dishonest acts and behaviors can put you as the employer and the entire organization in a difficult situation.
An act of dishonesty on the part of employees is lying about their qualifications or work experience.
This is a serious one because this must have influenced your decision to hire this employee in the first place.
An employee might also be fond of manipulating others, his position, or office files for personal gain.
This also counts as an act of dishonesty and lack of integrity on the part of the employee.
Dishonest employees might also be ripping off customers by tampering with the price of goods and services, putting the company in a difficult situation.
Employees who also spread malicious gossip and false stories about co-workers and customers are equally bad for business.
Hence, this is a very justifiable reason to terminate an employee’s contract with your organization.
Causing Damage to Company’s Properties
An employee might also be terminated owing to damage or damages to the company’s properties.
This might be a result of a burst of anger or violent conduct in the workplace.
An employee might have instigated or participated in a fight with a colleague, which might have led to the destruction of office properties.
This damage could also be a result of negligence or lack of regard for set policies and protocols.
In this set of circumstances, you can decide to terminate the employment of an employee.
It is worth noting that the circumstances surrounding the damage and the gravity of damage done would predict whether or not a termination is necessary.
However, if the company’s disciplinary committee or employer reviews the incident and decides that termination is needed, it would be justified.
Poor Attitude Towards Work
Another reason that might warrant terminating an employee’s contract is if the employee has a persistent poor attitude towards work.
Poor attitude towards work can reveal itself in different ways.
One very common sign of a poor attitude towards work is when an employee comes late to work frequently.
It is less of a problem when the cases of late coming are rare and far between.
However, it becomes more serious when the employee makes it a habit and becomes a regular occurrence.
Another way an employee might demonstrate a poor attitude towards work is by not giving their job the time and attention it deserves.
Such employees would be lazy during work hours or spend the time engaging in other less important activities.
As an employer, you’ll most likely understand the repercussions of such an attitude.
Hence, this might leave you with no option but to terminate the contract of the employee.
Indiscipline and an Unprofessionalism
As a business entity, it helps to have employees who are of the topmost level of professionalism.
Professionalism gives your organization a good brand reputation among customers and also helps to improve the internal work culture.
On the other hand, when employees are unprofessional, it can make work-life difficult for their fellow employees and turn away customers.
A signal of unprofessionalism from an employee towards customers might be being rude or disrespectful to customers.
It can also be revealed in failing to address customers properly or leaving their issues and complaints unresolved.
An undisciplined and unprofessional employee might also call in sick all the time, even with little or no evidence to back it up.
When an employee also makes it a habit of showing up at work drunk or heavy on drugs, it is also a sign of indiscipline that can’t be tolerated.
If an employee exhibits these negative traits, it would be best to call it to their attention and encourage them to change such behaviors.
However, if no improvement is forthcoming or the indiscipline is beginning to affect your business adversely, then it’s time to call it to quit and terminate the employee.
When an Employee does not Fit-in Properly into the Organisation
There is a type of employee termination referred to as termination by mutual consent.
This is when an employee and the employer both agree to terminate the contract of employment based on common grounds.
One of such common grounds is when an employee is not a good fit for your organization.
Note that being a poorly fit employee for an organization doesn’t necessarily mean that the employee is underperforming or not good enough.
An employee might be a professional in skills and attitude, but the skillset might not benefit or be useful to your organization.
Whatever you do might not yield positive results, and it might be frustrating for both the employee and you as the employer.
Instead of holding on to the employee and risking disengagement, dissatisfaction, and frustration from the employee, it might be best to terminate the contract of such an employee.
This is a higher grade of dishonesty that an employee might exhibit.
Employee theft on any level is a bad trait and can put the organization they work for in a bad light.
This theft might be done within the office environment or with customers.
Whichever the case, cases of employee theft cannot be treated with levity, and it’s a solid ground for terminating an employee’s contract.
How to Terminate an Employee – Steps You Can Take
Terminating employment is not as easy as putting a call across to the employee and saying: “Hey Mate, it’s been a nice ride, now it’s time to say goodbye.”
It is also more than sending an SMS or Email communicating your decision with the employee.
Just as there is a standard process for hiring employees, so there is also for terminating employment.
Here are some tips and steps you can take when it becomes necessary to terminate employees:
Don’t Make Termination the First Option
This tip is actually one to apply before ever deciding to terminate an employee.
As mentioned earlier, a lot goes into hiring employees and resorting to termination as the first option is not the best.
Loss of employees will always leave a hole in your company, regardless of their designation or years of experience.
Hence, when appropriate, it’s necessary to allow employees time to make improvements and change before resorting to termination.
Some issues with employees where warnings can suffice before termination include: poor performance, poor attitude towards work, disrespectful attitude, late coming, e.t.c.
It would be best to let them know about these and offer verbal or written warnings first while giving enough time for them to work on it.
However, in cases of gross misconduct, a summary dismissal might be an option without a need for dialogue or warning.
You would need to use your discretion to know when a situation warrants a warning first before termination.
How to Terminate an Employee – Arrange a meeting with the Employee
You might have heard stories of organizations that terminate employees over a phone call or by SMS.
Some even go the route of using a message on social media to inform an employee of termination of employment.
However, that’s not the best approach to terminating an employees’ contract.
It’s always best to make it official.
Hence, arrange for a face-to-face meeting with the affected employee.
This would give you the proper atmosphere and opportunity to discuss and hear what they have to say.
Write a Formal Letter of Termination
This process also bothers around making the process professional and official.
When you hired the employee, you most likely gave them a letter of employment/appointment letter.
When terminating an employee, it is likewise essential that you put it in writing.
That rules out termination by phone call or through a random SMS.
It’s courtesy on your part to honor the employee this way.
Keep it Brief and to the Point
During the meeting where you communicate your decision to terminate an employee, emotions might be running high.
This is especially so when you are firing an employee based on poor performance, and you have a liking for that employee for other reasons.
You might be tempted to want to talk too much or try to sugarcoat the main point of the discussion.
However, you need to avoid this.
It helps to go straight to why you have called the meeting, and mention the reason for the decision you’ve taken.
Choose the Right Setting and Time
Termination of employment is a private and personal affair.
Hence, it would be inappropriate to have such a conversation in the presence of other team members.
Accord them the respect of having the conversation in a private and controlled setting.
Regarding the timing, it is also best to have such conversations at the close of business for a day.
That way, you can get the private and calm atmosphere the occasion needs.
Slow Down on the Commendations
Some letters of termination might leave employees confused about why they were fired.
This is because the employer, probably out of empathy and compassion, tends to overemphasize the positives of the employee.
While it is necessary to touch areas the employee excels at, helping them keep their confidence and dignity, do not exaggerate things.
It might make your employees wonder: “If I am this good like you say I am, why then are you letting me go?”
We know you are empathetic and compassionate, but don’t let that make you deviate from the primary reason for the discussion.
Involve a Third Party in the Meeting
When discussing with an employee to let them know they are being dismissed, it is best to have a third party present.
This person can be someone in the HR department.
One advantage of this is that it shows the employee that the decision is a general company decision and not yours alone.
Also, it is best to have someone else present as you cannot predict how the employee will react to the news.
People’s reactions vary and having another person present will help to take care of any eventualities.
Stand By Your Decision; Do not Negotiate
It’s not uncommon to have some employees plead for another chance when they are being laid off.
They might make promises that they will do improve.
When you’ve decided to fire an employee, you need to stand by your decision.
Allowing room for negotiation might just put you across as a weak leader and might actually make the situation with the employee worse in the long run.
Hence, once you’ve made the decision, stand by it.
Don’t Shut The Door Completely; Part on a Good Note
Employment termination doesn’t have to be the end of your relationship with the employee.
As earlier mentioned, your hands might be forced to terminate employees when they are not just suited for your organization.
In such cases, do not make the process an end of your relationship with them.
Let them understand the reason why you are letting them go.
You could make it a bit better by genuinely letting them know that if there’s a space for them in the future for a position, you’ll be glad to have them on board.
If you also know of other organizations where they can fit in better, you can refer them to such and try to render assistance where possible.
Of course, you won’t be offering this helping hand to an employee who has been terminated on the grounds of gross misconduct like harassment.
Collect Office Properties and Withdraw Access to Valuable Resources
Do not forget to collect all office properties from the individual, including ID cards, badges, office keys, uniforms, e.t.c.
If they also have access to some office systems and online resources, remember to withdraw this access.
The last thing you want is to have a former employee of your company possess items or access your business’s valuable resources.
Bottom Line on How to Terminate an Employee
Terminating an employees’ contract is quite a tough decision to make.
Many employers fear making this decision, but it might sometimes be inevitable.
When the presence of an employee poses a danger to the survival of your business, it is a decision you have to make.
To ease up the process, we’ve outlined steps and measures you can take to do this.
Apply these steps when you have to terminate an employee, and it would be a seamless and successful process for you.