How to Properly Terminate an Employee


One of the most difficult aspects of a manager's job is terminating an employee. Whether the reason for termination is business-related, performance-related, or for other reasons, terminating an employee is a serious measure and should be done in the most professional, ethical manner possible.

Having a comprehensive protocol in place for employee termination is beneficial for both the business and the employee. For the business, following a well-designed framework will significantly lessen the possibility of negative repercussions - legal or otherwise. For the employee, although they may feel a sense of emotional distress, a sense of respect and dignity should still remain intact.

We will discuss the important elements of employee termination and what management should consider before making the decision to terminate employment. Among these considerations include pre-termination procedures, the potential operational and legal implications, and the correct way to conduct an employee termination.

Pre-termination procedures

The business should have a set of disciplinary procedures that are followed before a termination is performed. Among these procedures are formation and enforcement of fair rules and guidelines, documentation of disciplinary actions, and performance feedback systems.

Formation and enforcement of fair rules and guidelines

Employees need to be educated on what the business expects of them in terms of professional and personal conduct. The most common way that businesses do this is by having an employee handbook or another document that lays out these rules.

Ensuring that rules and guidelines are equitable and clear is important to both parties involved. For added measure, having the employee sign something stating that they have read, understand, and will adhere to the contents of the handbook or other document is suggested.

Properly enforcing these rules equitably and thoroughly is as important as having them. While disciplining an employee may be uncomfortable, it is often necessary for the business to be productive and for the employee to understand how they are to conduct themselves. In addition, it is important to document any disciplinary action taken.

Progressive discipline policy

A disciplinary framework that many employers use is based on a progressive disciplinary system. In a progressive disciplinary system, disciplinary action increases in severity with each infraction. A general progressive disciplinary system usually follows a similar sequence of events:

1. Oral warnings

2. Written warnings

3. Suspension (or Leave of absence)

4. Termination

The rationale behind using a progressive disciplinary system is that it provides protection to the business, fairness to the employee, and consistency in disciplinary action for all workers, regardless of position.

To reiterate, it is important that these disciplinary procedures are outlined within employee documentation - such as a handbook - and that the appropriate documents are reviewed with the employee, signed, and filed.[1]

Documenting disciplinary issues

Proper and thorough documentation of corrective action is very important to both the business and employee. In obtaining and filing the appropriate documentation, the employer protects itself against adverse actions - such as potential lawsuits. The employee also knows the severity of their behaviors, its consequences, and has ample time to make changes to their performance or conduct.

When documenting disciplinary action, the "5 W's" should be included: Who, What, When, Where, and Why.

- Who was involved? What is their position within the organization? Is there anyone who witnessed the event or has knowledge of it?

Obtain written statements from any witnesses and, as accurately as possible, mention everyone who was there, even if they were not directly involved in the incident.

- What was the incident or recurring issue? What is the specific behavior or actions?

The preparer of the document should be fact-based about the incident and omit any kind of personal comment or interpretation.

- When did the incident occur? Regular business hours? Off-duty?

The preparer should be as close to the time of the incident as possible.

- Where did the incident occur? Was it on business property or elsewhere?

- Why did the incident occur? What, if anything, provoked it?

When attempting to document why something happened, it is important to remain objective and fact-based. This means investigating the incident, obtaining relevant information, and documenting this information. It is also important to allow the employee in question to give their interpretation of the events and write them down.

The documentation should include the date and time, the employee's full name, an opening statement about the documents purpose, a description and definition of the incident, the employee's statement, and the disciplinary action being recommended and why. The preparer should reference the organizational policies (handbooks, code of conduct, etc.) applicable in the incident.[2]

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If and when punitive action is taken, it should be emphasized to the employee that future incidents will result in corrective action, up to and including termination. The possibility of future corrective action and termination should also be documented with the paperwork.

Performance feedback systems

Poor employee performance is among the most common reasons for employee termination. An employee that has performance issues should never be astonished that they are being terminated; as ample warning and appropriate corrective action should have already occurred. This is where performance feedback systems are valuable.

Performance feedback systems involve a continuous process that both analyzes and evaluates employee performance and other behaviors with the purpose of increasing productivity. Performance feedback allows employees to understand what is expected of them, while managers have the opportunity to address any and all strengths and weaknesses in individual performance.

Performance feedback should have the following attributes:

- Accountability. This means accountability for both the manager and the employee. The manager should take responsibility for their thoughts, observations, and feedback. This is done by using words like "I", "me" and "my" while the feedback is being given. The employee should take responsibility for their performance in relation to their expected output if presented correctly.

- Specificity. Concise and direct dialogue is of the utmost importance when giving feedback to the employee. If there are metrics or other quantifiable performance measures, they should be compared to the employee's actual performance and discussed. The manager should articulate the importance of acceptable performance and the consequences of not meeting performance standards.

- Strategy. Follow up the feedback session with a strategy for improving performance. Implement an action plan and have follow-up meetings to review the employee's actual results against their goals and objectives.

- Support. This means having a supportive tone and conducting the feedback in a supportive setting. This also means making it known that the purpose of the feedback session is to help the employee achieve success; not for embarrassment or punishment. If corrective action is being taken, make a distinction between the behavior being critiqued and the individual.

- Timeliness. Feedback should be provided as soon as possible in relation to the occurrence or behavior in question. Timeliness in giving feedback is most influential under these circumstances, as the occurrence or behavior is fresh in the employee's mind. Further, your employee can immediately start taking steps to correct their performance if necessary.[3]

In conducting a review with an employee not performing effectively, it is important to emphasize that a failure to meet performance standards will result in disciplinary action up to and including termination of employment. Again, it is important to include this possibility in any documentation being reviewed.

Operational and legal implications of termination

Possible operational implications

Once an employee is terminated, it is still business-as-usual. The company will still need to continue production of goods and services while doing so, at least in the short term, with fewer people. Operational (e.g. financial) implications should be considered before termination.

It is important to understand that more work will be allocated to the remaining employees who will, in turn, be expected to increase productivity. Management should anticipate these additional pressures placed upon their employees, along with how the company's image and finances may be affected.

Of course, if there is a substantial workload, it is beneficial for the business to quickly, but prudently hire a replacement. Doing so will minimize the financial impact of a terminated employee and lessen the burden placed on the remaining workforce as a result.

The supervisor tasked with carrying out a termination should review company policies and documents - such as a handbook - for policies that may restrict the right of termination. These policies may include: employment-at-will policies, progressive discipline policies, dispute resolution or arbitration policies, and "just cause" termination policies.

If there is an employment contract, it must include the right to terminate an employee. While this seems commonsensical, it is still important to understand your rights as a supervisor to carry out a termination or not.

For businesses that have a policy of progressive discipline, the established policies should have been followed. Oral and written warnings should have been given, and the proper documentation should have been filed. In the event that discipline policies were not followed or the proper documentation not filed, the supervisor should be able to give a valid reason as to why. Usually, this involves a serious infraction such as the threat of physical violence, drunkenness on the job or another serious offense.

Some companies have a dispute resolution policy and are required to give employees ample opportunity to resolve any issues under that policy. The supervisor should know if such a policy exists and take the appropriate measures.

Adherence to policy and well-documented disciplinary measures will protect business interests in the event of litigation.

Legal implications

Most companies have a policy of "at-will employment" - the right of an employer to terminate an employee without giving a specific reason, and right of the employee to end employment at any time. This policy has lessened the likelihood of a lawsuit being filed against an employer. However, the business and the supervisor should always consider potential legal implications before making the decision to terminate an employee.

Federal and state laws exist that prohibit discrimination based on age, gender, national origin, physical disability, race, sexual orientation, and other classifications. Considering these laws when making both hiring and termination decisions to reduces the possibility of litigation.

Some of the federal laws protecting certain classes of employees include:

- Americans with Disabilities Act (ADA). This law prohibits the discrimination of people with disabilities, including in both hiring and termination.[4]

- Civil Rights Act of 1964 (Title VII). The Civil Rights Act prohibits discrimination of employees based on race, color, religion, sex, or national origin.[5]

- Age Discrimination in Employment Act. This law is designed to protect workers who are over the age of 40 years in an employment setting.[6]

- Pregnancy Discrimination Act. The Pregnancy Discrimination Act stipulates that an employer must treat pregnant women the same way as other employees. Of course, this includes in both hiring and termination.[7]

- Family and Medical Leave Act (FMLA). FMLA states that employers must provide eligible employees up to 12 weeks of unpaid, job-protected leave per year. An employee may not be terminated as long as they are within the 12-week allotment provided by law.[8]

In addition to federal laws, states also have their own laws that protect workers. These laws range from workers' compensation discrimination, protection against retaliation (e.g. whistleblowing, freedom of speech, protected personal rights), unemployment compensation and other benefits, such as healthcare.

There are various other federal and state laws on the books that protect both certain classes and other citizens from discrimination in hiring and termination. A good rule of thumb is to ensure that these laws are understood and adhered to, and to seek internal legal counsel if uncertain about any sort of legal matter.

Performing an Employee Termination

Having established and followed pre-employment procedures and examined the potential legal and operational impact to the business, it may be in the best interest of the organization to move forward with termination.

Once the decision has been made to terminate an employee, the manager performing the termination needs to do so ethically and professionally. To do this effectively, the manager must be mindful of where to perform the termination, how to inform an employee they have been terminated, and what know the post-termination actions to take.

The termination meeting should be conducted in a neutral, private atmosphere, such as a conference room or office away from others. This will prevent the employee from feeling singled out and unfairly treated.

When the supervisor and employee have been seated, it is important to follow simple strategies to help make the meeting as effective and professional as possible:

1. Get to the point quickly. Ideally, you want to inform the employee of their dismissal within the first two or three minutes, maximum. The reason(s) for termination should be laid out rationally and concisely.

2. Be tactful, firm, and straightforward . Remain resolute and confident when reiterating the decision. Being uncertain and hesitant could cause resistance and complications.

3. Keep the discussion business-oriented and brief. Discussing topics outside of the business at hand is unprofessional and serves no purpose.

4. Do not soften the message. Sending mixed signals such as discussing positive aspects of the employee's performance is not conducive to the point of the meeting and could cause confusion.

5. Avoid accusations and personal feelings. Emotions may be running high, but it is important for the supervisor to keep emotions in check as to avoid conflict and other repercussions.

6. Do not bring up any differences between the parties. While there may indeed be unstated differences between the supervisor and employee, they are not appropriate to mention in a termination meeting.

7. Inform the employee of payroll and benefits policies. Information to convey includes last paycheck, severance pay (if any), and benefits coverage (if any).

8. Inform the employee of potential employer inquiries. If an employee is leaving on good terms, advise that you may be listed as a reference if allowed by company policy. If an employee is not leaving on good terms and they ask about this, adhere with company policy on how inquiries are handled.

During the dismissal meeting, if the employee shows any signs of agitation or hostility, the meeting should be discontinued immediately, and either human resources or security should be notified.

Once the meeting has concluded,, the manager or security should escort the employee to their work areas to collect any belongings. After the employee has done this, they should then be escorted out of the building or work area. This process should be done as discreetly as possible as to not embarrass or anger the employee.

After the employee has left, it is important to keep any details of the termination confidential. Exposing any kind of information about the termination to others, including other managers, customers, and co-workers, can both harm employee morale and make the business subject to a lawsuit, specifically for defamation of character.[9]


The decision to terminate an employee is a difficult one, but one that must be made in certain cases. If a business moves forward with termination, it must do so with the utmost care and professionalism.

Proper termination of an employee demands both an internal and external examination. Internally, this includes a culture of accountability - established and enforced rules and guidelines, documentation of disciplinary action, and performance feedback systems.

Operationally, the business needs to consider potential changes in productivity, employee morale, company image, and financial returns. Of course, an examination of external factors such as federal and state law as well as other potential legal ramifications is necessary.

When it comes to corrective action such as employee termination, solid internal business processes are a must. If a business is ethical, professional, and knowledgeable about how it conducts its daily business, it will make a very difficult process such as an employee termination much easier on those involved.


Americans With Disabilities Act. (n.d.). Retrieved September 14, 2019, from

Family and Medical Leave Act. (n.d.) Retrieved September 14, 2019, from

Federal Laws Prohibiting Job Discrimination Questions And Answers. (2009, November 21). Retrieved September 14, 2014, from

Ongoing Feedback and Performance Management. (2007, September 1). Retrieved September 14, 2019