Employment Practices: What You Need to Spell Out – Part Three

This week we are continuing our deep dive into what needs to be part of your employee handbook and your policies. Now we are at the toughest point – spelling out the way you will handle discipline and terminations.

Disciplinary Process and Terminations

In this area of your handbook, you’ll address what remedy an employee has if they are unhappy with their supervisor or manager. You’ll want to spell out the steps they should take to make the issue visible without fear of retribution.

This is also the place where you’ll lay out the way someone’s behavior will be addressed in the event that it is out of standard. Typically, you’ll use a three-part process: verbal warning, written warning, termination. This way the department of labor sees that you have made an effort to allow the employee to correct the behavior. This is one of those areas where you want to specifically avoid using the word “probation.” The reason for this is that you want to retain the ability to terminate that person at any time in the future for a similar infraction. If you use the word “probation” in your verbal or written disciplinary process, you are implying that, after they successfully complete whatever the “probationary” time period is without demonstrating the problem behavior, they are not subject to termination in the future for reoccurrence of the same behavior. In effect, the slate is erased after the probationary period of time.

Let’s examine the steps in a disciplinary process in more detail:

Step One: Verbal Warning

You’ll have a verbal conversation with the employee and ask for the behavior to be corrected. Be sure to also keep a written record of this conversation including the date, time, and what was said.

Step Two: Written Warning

You’ll describe the behavior in writing, and also describe what needs to happen by when, and what will happen if it doesn’t. This is a good place to use the phrase: “Consequences for an additional infraction include further disciplinary action, up to and including termination.”

Step Three: Termination

When you have to terminate someone, please do so with the utmost respect for that individual as a human being. So often we get wrapped up in our emotions and feel vindicated by a termination, only to have it haunt us with further threats of litigation or unemployment. Decide if you’re willing to give the employee a severance package. One week for every year employed is typical; one month for every year if it’s a higher-level executive. Of course, get a release of further action if you do give them a severance package.

Don’t worry too much about unemployment if you fire someone. As I said earlier, unless someone broke a stated company rule, that person is likely to get unemployment benefits. Yes, it will affect your rating, but in the long run, it’s cheaper than litigation.

Excerpted from my book, “Putting Together the Entrepreneurial Puzzle: The Ten Pieces Every Business Needs to Succeed.” Available here on Amazon.