Q&A: How can employers reduce risk when terminating an employee?

Lora Patterson, HR Advisor at Zenefits
Sep 21, 2021

When it comes to employee terminations, there is always a risk of things going sideways. In this episode of POPS!, Zenefits HR advisor Lora Patterson explains how to reduce risk with clear company policies, regular performance discussions, and manager enablement. After you listen: Order your copy of our book People Operations: Zenefits.com/pops-book Follow the podcast  […]

When it comes to employee terminations, there is always a risk of things going sideways. In this episode of POPS!, Zenefits HR advisor Lora Patterson explains how to reduce risk with clear company policies, regular performance discussions, and manager enablement.

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On this episode, you’ll hear: 

  • [00:46-01:39] Mitigating risk with “at-will” company policies
  • [01:39-02:37] What to know about disciplinary policies
  • [02:37-05:03] How to manage employee’s performance
  • [05:05-05:53] The importance of training managers
  • [05:54-07:13] When to involve your legal team

POPS Star Bio

Lora Patterson is a Senior POPS Advisor at Zenefits, where she advises clients on a broad range of human resources issues including employment laws and regulations, management practices, policies and procedures, and best practices regarding people management, development, and engagement. She lives in Phoenix, Arizona.

Transcript

Lora: How can employers reduce risk when terminating an employee?

Didi: Welcome to POPS, the show that shows you how to shift from human resources, paperwork to people, operations for the new world of work handle. By answering one question at a time

today, to help us answer your question. Here’s Lora Patterson, Senior HR Advisor at Zenefits

Lora: Well, there’s always going to be some risk around terminating an employee. I do believe there are steps companies can take that can help them mitigate that risk that I’ve broken down into several categories. The first category is going to be around company policies.

If you’re in an at-will state, then I would have a policy that outlines at will. So at will employment means that an employer can terminate an employee at any time for any reason, except in illegal. Or for no reason without incurring legal liability. Likewise, an employee is free to leave a job at any time for any or no reason with no adverse legal consequences at will, can be put into question.

If you have a contract or agreement that guarantees employment for a certain period. Which is why it’s so important to include at-will statements in offer letters, contracts, and handbooks. So employees understand that they are, the company can decide to part ways I would then have your employees sign those agreements, confirming that they’ve read the at-will statement and they understand it.

The second thing to look at is it’s important to let employees know about your various company policies and the repercussions of violence. Policies, this will help them be aware of any possible recourse depending on their actions. A big one of these policies that you want to have outlined is a disciplinary policy.

Typically, these policies outline a list of steps that company will take. When a company policy has not been followed. This could look like having several verbal warnings or written warnings leading up to a termination. In that policy, I would include a statement that the employer reserves the right to forego these steps, depending on the gravity of the offense.

Basically, you don’t want to lock yourself in to having to take five steps before you terminate. If the situation warrants it, you want to be able to go directly towards termination. The next thing is you’re going to want to have a statement that this policy does not change the actual status of the employment relations.

The next category I want to discuss is around managing an employee’s performance. I think it’s important for managers and employees to have discussions around performance for the entire duration of life cycle as an employee. So the first thing you’d want to do is establish a performance management process that encourages managers.

And employees to meet regularly to discuss their performance. While meeting frequency is going to depend on your company and your needs. I typically recommend anywhere from one to two times a month during these meetings, managers can help employees understand the specific performance expectations for them, any goals they need to be needed.

The metrics that are being used to measure those goals and success in the role, it should also go over their progress on meeting their goals, any sort of challenges they’re experiencing and any issues that need to be correct. I would then have your managers document these discussions, especially if they have to do with employees performance, they should then make these notes available to their employees.

So they can always go back and see what was discussed in that meeting. This is going to let employees know what they’re doing well and give them the opportunity to improve. Basically employees should really never be surprised by that performance review because these discussions should be taking place frequently enough for them to understand, okay, this is what I’m doing.

Well, this is what needs work on. I would also have an annual review process where supervisors can provide feedback to the employees and then meet with the employees to discuss. The next thing managers should be doing is they need to meet with employees when there are behavioral or performance issues.

These meetings are going to help your managers follow the disciplinary policy. You’ve already established. Once these discussions have taken place, managers should document them. And I would recommend having employees sign them. The reason why you want them to sign it is you want the employee to agree that they met.

They talked about certain things and they understand what took place in that. Something. I see a lot of is companies saying that they’ve had several issues with an employee, but they never addressed it with them. However, if you look to terminate an employee for performance issues and you didn’t document any performance issues, you have nothing to prove that those issues actually exist.

Which opens you up to the risk that employee could then claim they were terminated for reasons other than performance. The next category I want to touch on is the importance of training your managers. So I would develop an interactive training for your managers and supervisors regarding at-will employment.

Um, the disciplinary policy, the performance management steps, they should be taking and include any sort of information around documentation. So they know what’s expected of them. I would also educate managers around workplace laws and how those laws impact the relationship with the employees. Basically you should help managers understand that if employees need leave or accommodation or.

Basically any sort of benefits that are protected under certain federal or state laws managers should know what keywords to look out for and what steps to follow once the employee has brought up the situation. The last category I want to go over is when to involve your legal team. So there are certain scenarios around terminating your employees, that you put your company at greater risk, which is why I recommend involving your legal team.

When these situations arise. The first one is if you’ve had an employee who has filed a complaint around sexual harassment, and then shortly after you decide to terminate that employee, it could look like retaliation. Similar to this is if you’ve had an employee complaint about being discriminated against, and then you decide to let them go, it could also look like you’re trying to get rid of an employee because they brought up a problem.

Some other things to look out for is if an employee has asked for an accommodation due to a disability, if they’ve asked for medical or family leave, or maybe they just joined the military. All of those scenarios could potentially provide protection to an employee and terminating them will come with additional risk.

Finally, while at will employment means an employer does not need a reason to end employment. I would highly recommend only using legitimate business reasons for all decisions related to employment, having a legitimate reason and having the documentation to back it up. Is going to help protect your company.

Didi: Do you have a question for our experts? Click the link in the show notes, or if you’ve got other ideas and feedback about our show, send them to podcast at dot com.

 

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