Firing workers comes with the territory, but business owners can do it fairly
By Jenny C. McCune • Bankrate.com

If you hire employees, eventually you'll have to fire someone. It's never easy, but it pays to be fair, both from a legal and ethical standpoint.

If you're growing beyond the sole proprietor stage and you're building a system to let you hire effectively, now's the time to build a system in place for firing people, too. They're different sides of the same coin. The hiring policy ensures that you hire equitably and a firing mechanism means that any dismissals will be fair, consistent and legal.

Write job descriptions
Start with job descriptions for each position. These outline each job's requirements: what skills are required and what performance standards must be met for an employee to be considered to be doing a satisfactory job.

If learning a new task is part of the assignment, then it's fair to give a worker a specific amount of time to master that skill. In addition to spelling out performance requirements, many companies will also give new hires a probation period. That puts in place an early alarm system to alert you when an employee is having a problem. "Any dismissals should be based on performance issues," says Donald H. Weiss, a book author and president of Self-Management Communications Inc., a human resources consulting firm based in Florissant, Mo., a suburb of St. Louis.

As a business owner, you should also draft an employee's manual that spells out acceptable and unacceptable actions. Two sources to learn how to ink a policy manual are: The Employee Handbook and Personnel Policies Manual by Richard J. Simmons (Castle Publications Ltd.) and "Employee Manual Maker," a CDROM program from JIAN software.

Once the rules are drawn up, distribute them and have employees sign a statement that says they've read the rules and regulations and understand them.

Now you've got a problem
What do you do if the person is not satisfactorily meeting the performance requirements you've set?

First, a company needs to consistently enforce performance requirements. That means you can't fault Sally for coming in late if you don't do the same to Sam.

If a problem arises, help the worker correct it. You or an immediate supervisor need to meet with the underperforming employee, explain the problem and work toward a solution. If a telephone order-taker has difficulties, for example, you might assign a mentor -- a more experienced worker -- to help the problem employee learn the ropes.

Perhaps the person's work continues to lag. Each step of the way, you apprise the person of the problem, go over solutions and warn about what the ultimate consequences are if the person's performance fails to improve. You also need to keep a "paper trail" of each meeting and warning.

When all else fails, fire
If the person fails to improve after repeated warnings and within the specified period -- say, the end of a three-month probationary period -- the time has come to let the person go.

Your legal right to fire a worker usually arises from the "employment-at-will" doctrine that is in place in most states. That means that it's the employer's right to terminate without cause, just as an employee has the right to quit at will. That right, however, is limited by federal and state law and by court rulings, collective bargaining agreements and statements made in employee handbooks.

It's a complex and ever-changing issue, so ask your lawyer or contact your state's department of labor for more information.

Once you're sure you're on solid legal ground in firing a worker, here's what the experts say about handling the act in a fair and diplomatic way:

• Do it face to face. e-mail or a phone call won't cut it.
• Gather the "evidence" -- the documentation that shows the person hasn't lived up to the job's requirements.
• Figure out what severance pay is owed to the person (if any), how long the company will cover his or her medical benefits, and how much notice the person will be given -- that is, how long the person will be employed at the company. Many companies extend severance only to employees who sign a promise not to sue or disclose company secrets.
• Arrange to meet the person at the end of the day. "The late-afternoon timing makes it possible for the individual to go to their desk and clean it out without other employees around," says Elizabeth J. du Fresne, an attorney with Steel Hector Davis, a Miami-based law firm.
• Meet on neutral territory, such as a conference room. "I've learned this from conducting termination interviews in my office and not being able to get the individual out of my office," du Fresne says. "I don't want to walk out myself and leave them with all my stuff. Thus, you sit ... a very long time sometimes. A conference room eliminates that problem."
• Explain to the person that his or her performance has been unsatisfactory and why it's failed to pass muster. Try to do this quickly rather than drawing it out.
• Listen to any complaints the employee has, but continue to be firm. This is a decision that's already been made.
• If you feel it's reasonable, offer to write a loosely worded letter of recommendation or help in finding a new job.
• Do it quickly. If someone's not working out, don't let them spend years at your company while you get up the courage to fire them. It's fairer to let them know right away. It also puts you in a better legal light. If you fire someone after many years on the job and without proper documentation (a history of performance problems) or an out-and-out fireable offense such as theft or violence against another employee, you're leaving yourself open to a lawsuit.
• Never fire in haste or in anger. Take the time to cool down or seek another person's perspective on the problem.

Keep in mind that even if you do everything "right" that doesn't guarantee that you won't be sued. What it does guarantee is that you will have a good case that the firing was justified and legal.

Jenny C. McCune is a freelance writer based in Montana.

-- Posted: Dec. 9, 1999