Dismissing an Employee: The 5-Step Process You Can’t Afford to Skip

It doesn’t matter good you get at recruiting and managing staff, it’s a sad fact of employing staff that you’ll have to dismiss some as well.

Dismissal for gross misconduct is the immediate termination of an employee’s contract due to a serious violation of company policy or the law. Examples of gross misconduct include:

• Theft, fraud, serious dishonesty.
• Violence.
• Harassment or discrimination.
• Gross insubordination.
• Misuse of company property.
• Being under the influence of drugs or alcohol at work.

In these situations, it’s important you follow your written policies on what constitutes gross misconduct and the process for handling such cases. A typical dismissal process may include:

• Conducting an investigation, which may involve interviewing witnesses and reviewing evidence.
• Holding a disciplinary meeting where the employee has an opportunity to respond to the allegations before any action is taken.
• The employee appealing the decision if they have the right to do so.

Sometimes, the process can be swift. I once had a new employee who turned up drunk to an after-work meeting and swore at people in the room. I was present so didn’t need to conduct an investigation. The person accepted dismissal that day and didn’t want to appeal.

The Five-Step Turnaround Process

You may wish to dismiss a Poor Performer because they aren’t meeting the Minimum Acceptable Standards or are toxic to the company’s culture. I believe that dismissing Poor Performers is usually the right thing to do. The remaining staff will no longer be held back and be more excited about having you as a leader. In some instances, you may want to make one last attempt at rescuing the situation with a turnaround process. I call it a “turnaround” rather than “performance management” or “dismissal” process because its aim is to help quickly improve performance. If this doesn’t lead anywhere, then the person is dismissed, which helps protect the organisation’s future.

The turnaround process typically lasts three months. This is a reasonable amount of time to improve an employee’s skills or behaviour, or be reasonably satisfied that they aren’t going to change.

The process follows five steps:

1. Identifying why they haven’t met your expectations.
2. Conducting performance reviews and verifying their understanding.
3. Issuing a verbal or written warning.
4. Doing a sanity check.
5. Dismissing the employee.

1. Identify why they haven’t met your expectations

Reviewing the Great Performance Profile, take a moment to score the employee against the Minimum Acceptable Standards. Highlight where the employee’s score is too low and make brief comments as to why. Then consider the following:

• Are there other reasons why they haven’t met your expectations? If so, it may be appropriate to add these to your Great Performance Profile.
• Sometimes employees create friction because of their attitude. Does your Great Performance Profile explain what attitude is expected? Could future Job Simulations be modified so that they give you a better understanding of how well candidates would integrate with a team?
• Did the recruitment process indicate any underlying problems? Two common problems include: seemingly insignificant points were not probed properly; and the ability to train and change someone is challenging because a behaviour is too ingrained.
• Is the Great Performance Profile realistic? While you may want to update the Great Performance Profile for future employees, this might not be possible with the current employee. This is because it may be part of the contract of employment and so can’t be changed without an employee’s consultation or agreement.
• Were Minimum Acceptable Standards properly communicated? Great Performance Profiles should be provided at induction. Performance reviews should also discuss achieved and expected standards.
• Did the employee oversell their capabilities during the recruitment process? If so, how will you spot similar issues in future Structured Interviews, Job Simulations and Reference Calls?
• Did you oversell the capabilities of the organisation? Too often employers make promises that they can’t deliver on.

2. Conduct performance reviews and verify their understanding

Conduct performance reviews.

Keep monitoring standards and expectations during weekly performance reviews. Ask the employee to state their understanding of desired actions and outcomes.

3. Issue a verbal or written warning

Subject to contracts of employment and policies, the next step is a verbal or written warning. If they don’t meet Minimum Acceptable Standards in a specified time, their position will become untenable.

4. Sanity check

Before dismissing someone, consider the following:

• Could they be a Great Performer in a different job? While you shouldn’t create a new post unnecessarily, if the employee was a good cultural fit and was good enough to be hired, think about whether they might be successful in a different kind of role.
• Do you need to rehire for the position? There may be the potential for outsourcing or automating parts of the role.
• Can you reduce the need for immediate rehiring? For example, could you temporarily or permanently redistribute the role to other employees?
• If you need to rehire, could someone be promoted?
• Do you want to confidentially start the recruitment process before dismissing the employee? This may mean the job will be unfilled for less time. You might find, however, that it’s not possible to find a replacement due to difficult market conditions.

5. Dismissal

If you want to dismiss someone and can do this legally, then do so. You can’t wait for a Poor Performer to leave; often they can’t leave of their own accord very easily as there are fewer opportunities for them.

If you’ve struggled with the decision, that is perfectly normal. But once you’ve reached a decision do it quickly out of respect for everyone. In six months, you’ll wish you’d done it sooner.

Whatever you do, approach the situation in a humane manner.

I’d strongly recommend that you have a fellow director or HR specialist as a witness. You should also observe any company policies which allow the employee to bring a representative.

Hold the meeting face to face if possible, and state your decision as soon as you sit down.

Communicate quickly, directly and honestly that they’re being dismissed. In the long run, this is usually best for everyone. The worst thing is to create a sense of ambiguity or to seem unsure in your decision. As a leader your job is to do what must be done when it needs to be done, whether you or others like it or not.

The best conversation to have during this process is to say,<span class="is-speech">“We’ve talked about this regularly, and we’ve been coaching you to improve. Unfortunately, despite both our efforts it hasn’t worked out, so I’m going to have to let you go.”</span>

Often, you don’t even need to have this conversation because they see the writing on the wall and leave before you have the chance to dismiss them. They may be disappointed, but it should never be a surprise because you should have communicated clear expectations during your more frequent performance review meetings. They should understand as clearly as you do that they haven’t been performing.

I like to remind departing employees that restrictive covenants are enforced.

Finally, I like to conduct a handover and put the employee on garden leave. This has three significant benefits:

1. You, and most importantly the team, can quickly move on.
2. The departing employee has less opportunity to generate a toxic work environment.
3. During garden leave they can answer questions about their role.

Recruitment Agency Guarantees

As previously discussed, if a new employee was introduced by a recruitment agency you may be eligible for a partial refund or a replacement. This is one of the few benefits of using a recruitment agency.

A refund guarantee gives a partial refund for fees paid to the agency if a new employee doesn’t work out during a limited time period. The refund may be issued as a credit note that normally expires within 12 months, so you’re forced to use the same agency again within that time or lose the credit.

Under a replacement guarantee, the recruitment agency provides a replacement at no additional cost if a new employee leaves within a certain time period. I’m not a fan of these because there’s no time pressure to refill the role or a requirement to present similar candidates.

Often, both kinds of guarantees are dependent on the recruitment agency having received payment in full and within payment terms.

Pause Before Hiring Again

When an employee is made redundant, legally you may not be able to replace them in a similar or closely related role for a certain period of time, typically six months.

Regardless of why an employee has been let go, pause and think. Ask yourself, “How did that happen?” and write down some reasons. Be careful not to write down symptoms such as that they didn’t fit in with the team. Instead, look for the real underlying problem.

Common reasons include:

• The role didn’t add value that customers were willing to pay for.
• The Great Performance Profile was wrong. Competencies were missing or Minimum Acceptable Standards were unrealistic.
• The recruitment process wasn’t thorough. Steps were skipped, most often Job Simulations and Reference Calls. Perhaps a seemingly insignificant piece of information wasn’t probed during a Reference Call. Perhaps you had unrealistic expectations that an employee would adapt their behaviour.
• The employee didn’t receive effective performance management.

A good follow up question is, “What would improve the situation for next time?”