Termination or firing employees is an unpopular but mandatory process. All businesses, big or small may, at some time, fire an employee because of business compulsions. However, the recent downturn has accelerated employee terminations largely due to financial and performance problems.
While the decision to fire an employee is never welcome, there are some acceptable reasons:
- poor performance at work or low productivity
- Indiscipline or unethical behavior
- Non-conformance with the company policy
Above reasons are accepted by employees, the business community and the legal framework of the country and states as necessary for business growth.
Unfortunately, there are incidents of “unethical and unacceptable” terminations.
It is unethical and legally unacceptable to terminate an employee on the basis of:
- Sex, race, color, ethnicity
- Medical disability
- Religious faith
- Age, etc.
According to the law, it is “illegal to discriminate in any aspect of employment, including hiring and firing”. Read more information on Unethical Discriminatory Practices.
Firing employees also exposes the organization to potential risks ranging from motivational to legal. Some common risks are:
- Productivity loss: Whenever an employee is fired, the organization risks the loss of productivity. While it is possible to replace employees, there can be a temporary decline in the organizational / departmental productivity. This risk increases if the employee that left held a critical skill or competency required for a business process or project.
- Team de-motivation: Whenever an employee is fired, there may be distress at workplace, at least within the team he / she worked.
- Cost of replacement: Whenever an employee is terminated, a replacement is needed. Rehiring and training a replacement to reach the desired level of performance needs both time and money.
- Litigation risks: Whenever an employee is fired, he / she may seek legal advice. Thousands of employees every year seek legal protection in court for employment related discrimination.
Whosoever initiates it, employee termination is HR’s responsibility
While line managers are responsible for work and performance related issues, employee terminating is primarily the HR department’s responsibility. Whenever a manager or supervisor requests for a termination, HR should critically analyze the case and find if it is a performance related, discipline related or something else.
Employee data: A safeguard for HR
Maintaining proper employee data such as job descriptions, performance appraisal records, employee goal sheet, warning letters, incident reports, etc. helps create a buffer in case of potential litigation. Joseph Cleary, Assistant Legal Counsel, EEOC says, “Employers get into difficulties because they do not document performance-related problems. Then they get to the point where an employee’s performance becomes intolerable.”
Objective, data based and process driven termination arising because of business needs or disciplinary issues not only saves the organization from internal embarrassment but also acts as evidence if a disgruntled employee seeks legal counsel.
Collecting and maintaining employee data requires significant investment in HR technology and time. An organization must start collecting data right from the day when an employee applies for a job and maintain it for as long as 7 years after termination / separation.
What next: Good HR software can ease your employee data management challenges by providing user friendly tools to record data, and retrieve it, when needed. Whenever you have slightest doubts of violation during a termination, you should retrieve and refer to employee records.