Handling the discipline and termination of employees is one of the most difficult and uncomfortable parts of operating a small business. As opposed to larger employers with many employees, it’s harder to confront performance or behavior issues in a small workplace because of the negative effect that criticism will have in the smaller environment. So many small employers or managers will tolerate these issues for as long as they canThis happens because the employee’s work isn’t that bad or because the employee gets along with everyone. As a result, this particular employee’s issues continue with no correction or intervention until the manager just can’t deal with it anymore. At this point, it’s not unusual for the manager to then fire the employee for a seemingly minor reason.
Upon being fired, the employee won’t remember all the past issues because they were not called out. Instead, the employee will only see the minor infraction, perceive it as trivial and lawyer up. Worse yet, if the employee is in a protected class, i.e., over forty, female, disabled, etc., the reason for the termination will be characterized as illegal discrimination.
The conventional way to avoid these situations is to adopt and consistently apply company policies that address work performance, attendance and behavior. Usually these kinds of rules come in an employee handbook or something similar. While adopting these rules is not especially difficult or expensive, applying them can be a different story. The real work is in identifying poor performance or behavior as early as possible and addressing it. The longer these issues are tolerated by management, the less credible they are as justification for the discipline.
How do you address these issues? There is usually no problem with verbal warnings, especially with non-union employees, but such a warning should be documented. As for the actual discipline, it should be progressive in nature. For behavior that is not really serious, an example might be a warning first, then a suspension and then a demotion or pay cut. The goal is to show the employee that continued employment depends on correction or improvement.
If this course of action doesn’t work and termination is the only option, managers should consider whether the circumstances leading to the action are putting the employer in the best position for a lawsuit. Three basic questions will usually suffice here: i) Has progressive discipline been applied and documented? ii) Were these procedures applied consistently to everyone? iii) Does the timing of the termination suggest some other motive?
In a small workplace, employers can be reluctant to tell employees the real reasons for the termination for fear of confrontation or awkwardness. Employers, however, should always give the true reason for a termination, assuming the reason is legal. For example, if the employee is told that the reason is lack of work, going out and hiring a replacement worker completely undermines the legitimacy of the termination in the first place. In fact, most discrimination-based employment suits are won when a pretextual reason for termination is proved.
For all these reasons, a manager should always be frank with the employee about his or her shortcomings and, if applicable, give the true reason for the termination. This leaves much less room for the employee to believe that some other discriminatory reason is behind the employer’s action.