The Right Way To Fire An Underperforming Employee

Originally published
Originally published: 11/1/2011

Use performance-improvement plans, but also be prepared to protect company assets.

Many business owners find it difficult to terminate bad employees. Some owners are overly concerned about potential legal difficulties with a terminated employee. Others become paralyzed by a concern over fairness. They want to give the bad employee several chances in order to assure themselves that the termination is justified. Finally, some owners are just too nice. Employment-law attorney John D. Rapoport of New York offers an interesting perspective to employers on the termination process.

"Business owners need to intellectually separate themselves from their business. The business stands apart from the owner and exists not only to provide for the owner and his or her family but also to provide for the employees and their families. Consequently, the owner owes a duty of loyalty to the business in the same way that employees do. If a bad employee is hindering the success of the business, the owner has a duty to terminate that employee." 

Thus, in making termination decisions, the owner is not acting on his own behalf but rather on behalf of the business and all who depend upon it. Rapoport contends that owners that adopt this type of perspective will find it much easier to make decisions that are in the best interest of the business.

And "good" termination starts almost from the time that the employee is hired. Good management requires that employees be given clear instructions concerning the scope of their employment duties, as well as how they are to conduct themselves on behalf of the company. A good way of communicating this information is to identify your best employees and describe those characteristics that make those employees "the best."  That should become the standard that the company uses to measure its other employees.

Once the employer has focused on the successful employees, identifying those who are not successful becomes somewhat easy. If an employee is not measuring up, rather than describe to the employee his or her failings, consider describing in a performance-improvement plan what changes are required to make that employee like the best employees of the company. If possible, include in the performance-improvement plan criteria and goals that can be measured. If an employee fails to meet the criteria and goals, he or she should be terminated.

Rapoport recommends that all employers maintain a termination checklist. The checklist should remind the employer of the company assets (equipment, tools, etc.) in possession of the employee so that the company is sure to recover those assets. It should identify the employee's access to the company, such as keys, Internet and e-mail privileges, and the like. All of these points of access need to be changed immediately following the employee's termination of employment. The checklist should also identify any forms or information that must be given to a terminated employee, such as information regarding benefits and when those benefits will be discontinued.

The termination decision should be communicated quickly, calmly, and concisely to the employee. Rapoport notes that it is a time for action not talk. Indeed, too much discussion, particularly when emotions are running high, can create more problems than the termination itself.

Finally, keep in mind that feelings do matter — the employee's feelings, not yours. A termination discussion that is nasty or demeaning serves no benefit. 

Michael P. Coyne is a founding partner of the law firm Waldheger Coyne, located in Cleveland, OH. For more information of the firm, visit: or call 440.835.0600.

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