How to terminate an employee: Doing the job no one wants to do

Terminating an employee isn’t a job that anyone wants to do. 

No matter the circumstance, it’s not easy to fire someone. But it’s incredibly important to handle the situation well for the sake of both parties. And according to one survey, it’s more common than you may think. In fact, nearly one-third of respondents reported having been fired at least once. 

And unfortunately, we know that economically, things have taken a turn. Companies are already conducting layoffs to help curb the impact of a potential recession. Terminating an employee isn’t always because of an insubordinate employee or poor employee performance. There are plenty of reasons why you might need to terminate employees. 

While employee terminations can feel transactional, they’re also emotional. Terminations need to be handled with the utmost care to keep employee engagement and morale high.

And for people managers, terminations can be anxiety-inducing. It can also stir fear and anxiety within remaining team members. Some might start to fear for job security or already experience fears of job insecurity. It’s a process that requires wraparound support from multiple touchpoints to do well. 

And, if possible, organizations want to prevent terminations from happening. Of course, no one wants to terminate employees. So getting proactive about employee performance is critical, whether that’s through professional development, coaching, inclusive leadership, and more.  

If you have found yourself in the difficult position of having to fire someone, we don’t envy you. But we are here to help. If you’re not sure where to start, here’s how to terminate an employee. It’s a job no one wants to do, but it’s important that if you do it, you do it well. 

5 steps to terminating an employee 

First, before you take any of these steps, consult your legal and human resources teams. With legal and HR guidance, you can make sure your organization is taking all the necessary steps. But you also need to ensure you're terminating employment lawfully and respectfully. 

1. If applicable, give the employee an opportunity to improve first 

If your organization is struggling with poor performance, there are ways you can be proactive. It's important to help them improve before it gets to the termination phase. 

Employee performance is an issue that virtually every organization deals with. And most of the time, it’s possible to turn employee performance around with the right support. 

For example, a coach can help push employees to look inward at the skills, capabilities, and potential they hold. By providing personalized support, you can also cater to how you’re improving your employees’ performance. 

At BetterUp, we’ve measured key components of employee performance. Think: resiliency, cognitive agility, productivity, goal attainment, and innovation. We’ve also measured the impact coaching has on each of these dimensions. Here are just some outcomes of BetterUp on employee performance: 

• BetterUp coaching has been shown to boost productivity by 2.1X 
• For those who start out low, Members see a 2X increase in goal attainment 
• For those who start out low, Members see a 2.5X increase in resilience 
• When it comes to handling stress, 90% increase in stress management for those who start out low

Bottom line: Give your employees an opportunity to improve. If they don’t, as a manager, you should be documenting performance issues as they happen. Together with support from HR and from BetterUp, you can put together a performance improvement plan. 

If the employee in question isn’t meeting expectations after you’ve given them ample opportunities to improve, it might be time to move on to the next step. 

2. Consult your HR and Legal teams 

While at-will employment is common, your company needs to ensure all terminations are in accordance with federal law. 

As a best practice, it’s good to make sure you’re walking through the termination process with your HR and legal professionals. Of course, your organization wants to avoid things like wrongful termination. You also want to make sure you’re gathering as much information as possible about company policy, any applicable severance packages, and more. 

Lean on your HR and legal teams to make sure you’re checking all the necessary boxes. An employee termination is not a process you want to enter into without professional support. 

3. Prepare for the termination meeting  

Firing employees is a nerve-wracking process. And it’s one that takes plenty of preparation. 

First, make sure you’re gathering all the information and documentation you need. For example, if you’re firing an employee because of performance, you need to have that documentation ready.

If you’re firing someone because they’ve violated a piece of the employee handbook, have that at the ready, too. If you’ve noted issues in past performance reviews, gather that data. Then, start to think about what you’d like to say. This isn’t a conversation you can simply “wing.”

You might want to script out exactly what you’d like to say. As you script out what you want to say, keep in mind you need the employment relationship to always hold a level of professionalism. Sometimes, companies encourage managers to have an HR professional present if they’re terminating an employee as well. 

You also want to work with your HR professionals to put together a formal termination letter. Just like employees use resignation letters when quitting their jobs, employers use termination letters. This termination letter should include everything the employee needs to know. For example, it should include things like: 

• Reason for termination (or termination for cause) 
• Severance pay or severance agreement (if applicable) 
• COBRA and health insurance benefits information 
• Final paycheck information 
• Anything else in regard to the employment contract 

Make sure you have this termination ready before you set up the face-to-face meeting with the employee. This will also help you to answer any questions the employee will have before their last day. 

4. Conduct the meeting — and listen to the employee

Here comes the hard part. It’s time to conduct the face-to-face meeting. 

Every terminated employee is likely to respond differently — and that’s OK. But this makes it hard to anticipate how the terminated employee will react. In this meeting, we recommend using these tips: 

• Be clear and direct from the beginning. If there’s ever a meeting to get straight to the point, it’s this one. Lean on your communication skills to be clear and direct at the very beginning of the meeting. This will help to make sure you can cover all the information you need to (and not leave the employee wondering or anxious about what’s to come).
  
  You can start off by saying something like, “I’ve got some bad news for you. Unfortunately, your employment has been terminated effective immediately. I’m going to walk you through all the information on my end but want to leave some space for questions.” 

• Give all the necessary information. If you’ve had ongoing performance issue conversations before, cite them. Your employee will know that this isn’t the first time you’ve brought performance issues up.
  
  Similarly, if there are things like violations of company policy, cite specifics. The more data and information you can reference from documentation, the better. Of course, if it’s a harassment or discrimination situation (like sexual harassment or illegal conduct), lean on your HR and legal experts to help guide the conversation. They might also be present if that’s the case. 

• Listen to the employee. Give the employee space to digest. It’s likely that the terminated employee will experience waves of grief, loss, shock, and sadness. They might also express anger, frustration, or other emotions.
  
  It’s best to simply allow the space to listen to them. In this step of the conversation, lean on your emotional regulation skills. Getting fired isn’t easy for the employee either, no matter the circumstance. While you might not know what they’re feeling, you can make the space to listen to what they have to say. 
• Answer any questions as best you can. It’s likely the employee will have some questions. Try to answer questions as best you can. This is also where the documentation will come in handy.
  
  For example, if an employee is confused as to why they are being terminated for poor performance, you can cite specific examples. Being well-prepared for the conversation will help you answer as many questions as you can. 
• Tie up all the loose ends. This is where you want to make sure the terminated employee has all the information they need. Go over things like unused vacation or vacation time, when they’ll receive their last paycheck and healthcare benefits. If your employees work in person, make sure you give them the time to gather personal belongings. 

5. Gather any company property 

Most business owners provide employees with some sort of company property. Make sure you’re gathering all property that you can, like laptops, files, and any other sort of company devices. For example, some companies distribute company phones or iPads. 

Make sure you’re also giving the employee time to gather their personal belongings. If your workforce is remote, you also want to make sure you give the employee instructions on how to return company property. 

5 things to not say when terminating an employee 

For managers, it’s not easy to terminate an employee. It can be anxiety-inducing and nerve-wracking. For some managers, you might also feel that sense of guilt, shame, or grief associated with firing someone. 

But as much as it’s an emotional process, it’s important to make sure you avoid letting your emotions get the best of you. Especially if an employee retaliates in a disrespectful way, it’s important to keep your cool. You also don’t want your nerves to get the best of you to where you put your foot in your mouth. 

We’ve compiled a list of five things to not say when terminating an employee. 

• “This is really hard for me.” Let’s stop right there. No matter the circumstances of the termination, the employee getting terminated is losing their job. Don’t make it about you. It’s important to lead with empathy but also have a direct, clear communication style. 

• “Compared to this team member, you’re just not doing well.” Managers should know that employee performance should never be compared to a fellow colleague. Employees should be compared to the job requirements at hand, not to the teammate next to them. 

• “Some details will need to be worked out later.” No, the details should’ve been worked out by now. If you’re inclined to say this, you need to go back to the preparation stage to make sure you’ve ironed out all the details. 

• “Let me know if I can do anything to help.” While this is said with good intentions, it’s not helpful. It can come off as condescending and patronizing to the employee. 
• “Our team is like a family, so this was a difficult decision.” Companies aren’t families. It can hint at the toxicity of the company culture if your organization thinks of its employees as family members. Of course, you wouldn’t terminate a family member from your family. 

5 reasons you would fire an employee 

There are plenty of reasons why you might fire an employee. We’ve compiled five of the most common reasons for employee termination. 

Discrimination 

If an employee has discriminated against others in the workplace, it’s grounds for termination. Under federal law, it’s illegal for a person to discriminate against another because of their race, religion, gender, sex, ethnicity, etc. 

If you think there’s a case for termination due to discrimination, consult your HR and legal professionals. It's likely it might be signs of a hostile work environment. 

Poor employee performance 

Poor employee performance is a common reason for terminating employees. If employees aren’t performing their duties, it causes a ripple effect across the organization. Sometimes, it can impact other employees’ work performance, too. 

While this is a reason that employees get fired, it’s also preventable. With the right support and resources, you can be proactive about how often you’re terminating employees due to performance. 

Unethical behavior 

It’s likely that your organization’s code of conduct or employee handbook has information about ethical behavior. If an employee violates that code of conduct through unethical behavior, that can be grounds for termination. 

For example, a sales employee could bribe a prospective client. In your code of conduct, your company clearly outlines a policy against bribery. This could result in this person’s terminated employment. 

Harassment or other illegal activity 

If you’ve found an employee has participated in harassment or other illegal activity, this could be grounds for termination. Under no circumstances should any sort of harassment be excused in the workplace. 

Downsizing 

Unfortunately, layoffs are common, especially when companies are responding to a larger economic climate. This is often the most difficult termination as many employees are let go who might have been fantastic workers. 

But there are costs that companies pay in response to layoffs. We know that layoffs hurt employee morale, employee engagement, productivity, and overall business performance. If you’re in the impossible position of having to lay off employees, lean on your coach. With the right support, you can make sure you’re doing what you can within your control to make this type of termination the best possible. 

Don’t forget the human element of terminating employees 

While it seems like a transactional process, terminating employees is emotional. It has negative impacts on the employee being let go. But it also can impact your hiring managers, team members, employee engagement, and overall morale. 

Work with BetterUp to make sure your workforce is building the mental fitness to be able to weather challenging times. By investing proactively in your employees, you can curb the negative impacts of things like terminations. And, at the end of the day, you’re investing in the power of your people.