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Dismissing Underperforming Employees: Tips and Potential Pitfalls

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As a business owner, you’re responsible for ensuring that your company runs smoothly; that essential tasks are accomplished and that the products or services that you offer work the way they should. While many businesses operate as sole proprietorships, other business owners employ one or more workers to deal with one or more aspects of the operation. But what if someone isn’t pulling his or her weight? At some point, the difficult decision must be made to let that person go. But before you distribute that pink slip, you should dot the I’s and cross the Ts to avoid potential trouble.

Establishing Solid Company Policies
Ideally, the process of dismissing underperforming employees should be in place long before you even consider letting anyone go. That’s the best way to minimize the potential for adverse legal action by dismissed workers, according to Eric LeBlanc, senior associate for Bennett and Belfort, P.C., a firm specializing in employment law located in Cambridge, Massachusetts. In his practice, LeBlanc has worked with employers who have let workers go and with workers who have been dismissed, giving him a unique perspective of both sides of the issue.

“Employers should be proactive in the treatment of employees prior to termination versus reactive in dealing with underperforming workers,” said LeBlanc.

The proactive approach in dealing with workers begins with drafting a comprehensive employee manual. It’s a worthwhile investment to consult with an attorney to ensure that the wording of the employee manual is in compliance with federal, state and local regulations concerning potential trouble spots like age or gender discrimination or sexual harassment, LeBlanc said.

Many managers and owners also fail to recognize the connection between making employees feel valued and minimizing adverse consequences of letting someone go. Employees who have been treated fairly are often willing to take responsibility for the reasons behind their termination, according to LeBlanc.

“If you ask ‘Do you feel as though you were treated fairly?’ most employees will be truthful unless they have an ax to grind . . . They (dismissed workers) may even justify their termination, saying things like ‘I could have done better,’” LeBlanc said.

Creating a Paper Trail
Another aspect of proactively dealing with underperforming employees is creating ample documentation to justify the decision to terminate. Along with documenting any disciplinary action you may take, examine work-related email messages, memos and other communications involving the employee in question. Follow up with the worker’s supervisor to identify possible pitfalls. If a dismissed employee does pursue legal action, you will want to be able to demonstrate that he or she had ample opportunity to improve before you made the final determination to let him or her go.

The process for establishing justification for termination usually includes three phases: a verbal warning accompanied by written documentation, a formal warning and a final warning (which may include a performance improvement plan). There is room for variation in this three step process. Extreme situations such as witnessing employee theft or physical assault often necessitate immediate action. Likewise, blatant cases such as habitual tardiness or an excessive time spent surfing the web on company time may warrant a shorter path to termination, LeBlanc said.

By contrast, a worker who formerly performed well but whose performance has deteriorated merits a more extensive inquiry before considering termination. Investigating the reasons for the decline in performance may reveal shortcomings in company policy or procedures that are potentially easy to fix. For instance, one or more workers may be struggling with a steep learning curve associated with new hardware, software or operational procedures. In such cases, proper training may be all that is needed, and if that’s the case, the company should provide it, LeBlanc said.

Dealing with Workers in Protected Classes
It should go without saying that rules and polices should be applied equally, and discipline imposed fairly. But employers must be especially careful when dismissing workers who belong to one or more protected classes to avoid even the appearance of discrimination. Workers with disabilities, people of color and workers over age 40 are provided protection under federal law against unfair hiring, employment and firing practices. In addition, some state and local jurisdictions provide protection for members of the Gay-Lesbian-Bisexual-Transgender (GLBT) community. Employers must also avoid giving the impression that dismissal was associated with retaliation against an employee, male or female, who had filed sexual harassment complaints in the past.

For instance, LeBlanc mentioned a dismissed employee in his early 60s who had been let go with more than a dozen other workers, all of whom were over age 55. Such circumstances automatically raise red flags concerning age discrimination. Likewise, an atmosphere where inappropriate remarks and offensive jokes were tolerated or encouraged could support claims or racial discrimination or sexual harassment.

This doesn’t mean that employers should never be able to dismiss underperforming workers who happen to belong to a protected class. What it does mean is that employers should be meticulous about addressing possible questions that may arise, and in providing justification for the dismissal of such employees. That evaluation should cover as much of the employee’s tenure with the company as possible.

“Focusing on the two weeks before termination in a vacuum could lead a judge or jury to view a termination as unfair,” LeBlanc said.

Crossing All the T’s
Once the decision to dismiss an employee has been made, proper handling of the termination process is essential. Have the employee’s final paycheck ready, along with the paperwork for the severance package, if there is one. In some states, dismissed employees are also entitled to lump sum pay for any unused vacation time; check the laws in your jurisdiction to determine if that’s the case for your company.

In fact, obtaining legal advice throughout the entire process of letting an employee go may be money well spent. Understandably, many small and medium sized companies may hesitate to take on the expense of obtaining legal counsel. But failure to do so may represent a case of penny wise, pound foolish.

“Prevention now can be worthwhile when you’re not in court later (defending a wrongful dismissal lawsuit), “LeBlanc said.

DISCLAIMER: This article includes general guidelines concerning the legal and policy aspects of dismissing employees. It is not intended to provide legal advice. Please consult with a legal professional in your jurisdiction with specific personnel questions.

Audrey Henderson

Posted In: Management

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