Find out how to handle under-performing employees with a fair performance improvement plan and process that can end in a well-documented termination if needed.

Terminating an employee on a whim can be a risky move for your business. You need a practical and fair process to help reduce your liability. Moreover, it’s best to give employees plenty of time to improve while also providing the tools they need to grow.

And, because recruiting, hiring, onboarding and training a new employee can be very costly, the extra effort may prove fruitful – provided the employee transforms their behavior.

Here are a few things to try first, before resorting to termination of employment.

1. Write down everything

Documentation is key. If you don’t write something down, it can be argued that it didn’t happen. Even informal conversations written in a notebook can be helpful and count toward documentation.

I know what you’re thinking – documentation takes time. Time you don’t have. Nonetheless, it can be your friend should you have to defend your decision down the road.

Here are some examples of important documentation to collect:

  • Electronic communications
  • Phone conversations
  • One-on-one chats
  • Unprofessional or subpar behavior in group settings
  • Feedback and complaints from coworkers, managers or clients

2. Clearly communicate expectations

For every job, you should have a job description. Even if you don’t have anything formalized, you should have a solid understanding of the functions and responsibilities of each role on your team. You should also know what it takes for employees to be successful in each role.

And it’s essential that your employees know this, too.

Don’t assume. People come with their own perspectives that don’t always match what their boss has in mind. To avoid confusion, each role should be clearly defined. This makes it easier to pinpoint and correct problems.

Similarly, your progressive discipline policy should already be established and recorded, outlining how corrective action and termination would take place should you need to go there. This helps ensure every issue is handled consistently and fairly.

3. Be a good coach

Both new and existing employees should be coached. This is informal feedback and consists of what’s right, as well as what’s wrong. Think of a football coach. He gives praise for a good pass or a solid tackle, but also points out the missed catches and holes in the defense.

Your employees need this feedback to understand how they are doing well before you get to the point of considering disciplinary action or termination.

4. Initiate a performance improvement plan (PIP)

So, let’s say you’ve provided ongoing coaching, but you’re not seeing improvement, or you see some major concerns with performance that the coaching has not improved . This would be a good time to develop a performance improvement plan (PIP).

The PIP should articulate specifically what the problem areas are and give detailed goals for what the employee must do to correct it.  PIPs aren’t typically for behavior issues or policy violations, but rather to bridge a skills gap or point out where development is necessary.

Here’s an example:

Sally Brown has been submitting reports with numerous grammatical, spelling and technical errors. Within the next 30 days, Sally needs to complete Business Writing 101, as well as utilize grammar and spell-checking tools prior to submitting reports. Technical data should be reviewed by the Engineering group. We will meet again on next Tuesday to review progress.

Remember: the timeline given for improvements should be reasonable. Some deficiencies are quicker to fix than others.

Finally, be sure to have your employees sign an acknowledgement form to confirm that they understand.

5. Conduct a verbal counseling

In situations where a policy is being violated, a verbal counseling might be the better way to go. Use this option to address things like, attendance, communication and other behavioral issues.

Here’s an example of the right way to word an attendance-focused counseling:

John has been late every Monday since the beginning of the year. John will arrive at work before the start of each work shift and clock in on or before his start time. He will promptly return from scheduled break times and work until the end of each shift. Improvement needs to be immediate, marked and sustained. Failure to work all scheduled shifts in their entirety or continued punctuality issues could result in discipline up to and including termination.

If you do a verbal counseling, send a follow-up email to your employee. (No signed document is needed in this option).

6. Conduct a written counseling

If things are especially tough to handle and you feel like you need to escalate the matter, you may need to move to a written counseling.

A written counseling is similar to the PIP in that it should clearly outline areas that employees need to correct. Again, in writing, detail specifically what needs to improve and how this should be accomplished.

In addition, the written counseling document should make clear (and in no uncertain terms) that improvement needs to be immediate, marked (noticeable) and sustained.

Employees should sign this form after you’ve discussed it with them. (This doesn’t mean they have to agree with what you’ve documented.) Their signature simply indicates that they have received the counseling.

What comes next

Hold regular follow-up meetings. Don’t put them off. Make sure you document all conversations and have the employees sign to demonstrate that they attended the meeting. Give them specific feedback on how they’re doing. If results are mixed, share with them what they’re doing right as well as what they’re doing wrong.

Now – and this part is important – if you don’t see improvement, or if the employee is still making similar errors, address them. Don’t wait until your next follow-up meeting. And keep notes on what you’ve addressed and when.

When all else fails, termination may be necessary. In these cases, it’s best to follow a well-documented progressive discipline process first, to minimize problems and to demonstrate you’ve tried to make the situation work for all.

When all else fails, here’s how to terminate an employee

Despite your efforts, you still may not see the type or quality of improvement needed. More than likely, the only remaining option is to sever the relationship. By now, having clearly documented what you did to help the under-performing employee improve – and discussed it with them – they’ll be less surprised by your decision.

So, prior to terminating your employee, be sure to review all associated documentation. Also, contact your legal counsel or HR representative to ensure your case is supported, justified and sound. Confirm that you’re following all state-specific wage and hour regulations. And if you use employment contracts or non-compete/non-solicitation agreements, you should ask your legal counsel to provide you with validity and enforcement guidance.

In releasing employees, honesty is the best policy.

While your goal is not to make anyone feel bad, you should also not disguise a performance-based termination as a “layoff” or request the person to resign. Employees who are asked to resign may later claim that they felt they were under duress to do so, pointing to something possibly untoward involved.

Additionally, employees who resign are typically not eligible for unemployment. If you choose to terminate the employee, own that decision.

For example, you can say, “John, as you know, we’ve talked a few times about your attendance, and we haven’t seen this improve as we would have liked. That said, we have made the decision to terminate your employment effective immediately.”

When to have the termination conversation

Honestly, there really is no “good” time to break the news that you’re terminating an employee, and it’s never an easy conversation to have. However, there are some times that are less desirable than others.

Opinions on when to terminate can vary widely, but ultimately, earlier in the week is preferable, as well as earlier in the day. And, as tempting as a Friday may be, you don’t want your employee stewing all weekend, either.

Regardless of what day or time you choose, generally it’s best for the employee to leave promptly. You can provide them some time to gather their personal belongings, or you can box them up and mail them, if they prefer. If it makes sense to have someone escorted out, do so, just make sure this is your consistent practice.

Summing it all up

There are many steps and factors to consider before terminating an employee for poor performance, and it’s not an easy process for any of the parties involved. But with a clear, thoughtful plan of action, good follow up and patience, you’ll rest a little easier knowing you’ve taken the rights steps.

Perhaps the only thing worse for your business than a bad employee may be bad HR documentation. Why? Because it can expose your business to potential risks. For more advice on avoiding common HR errors, download our free e-book, 7 most frequent HR mistakes and how to avoid them.