A Well-prepared Termination Plan Helps Avoid Lawsuits and Discrimination Claims

As property managers and owners, we sometimes deal with employees who are dishonest, non-team players or poor performers. There usually comes a time when, after unsuccessfully training, coaching and trying to change the employee's behavior, the relationship with the employee must cease.

The termination process is often difficult for several reasons. For many, admitting that an employee has not met expectations signals some kind of failure for the manager. Could you have been so desperate to fill the position that you did not see the potential problems during the interview or when you checked the references?

Other managers blame themselves for an employee's failure, and are willing to do almost anything to insure the employee's success, thus taking "hand-holding" to the extreme.

In today's tight labor market, we may be inclined to put time, money and energy into marginal staff members because we fear we won't be able to find more competent ones. We also resist terminating employees, fearing wrongful termination or discrimination lawsuits.

The costs of keeping poorly performing employees are significant. The direct costs can include lost sales or rentals, tenant dissatisfaction and damage our reputation.

Other employees may begin to resent the poor performer and the additional responsibilities they must assume in response. At best, morale in the company erodes; at worst, great employees begin to model the behavior or performance level that they perceive is the new company standard. They too become poor performers.

Employees who contribute the least are the ones that require the most supervision, training and coaching. When this happens, we must spend time solving the problems linked to poor performers and the rest of the staff receives less feedback and training.

Performance standards must be explicit to insure that employees understand their responsibilities, roles within the company and employer's expectations. Written job descriptions and policy manuals are important tools for developing a highly motivated, well-trained, professional staff.

We should strive to develop a schedule to meet with employees to discuss in meeting goals. Meeting with staff members early in the training process ensures that deficiencies are detected quickly. Continually document areas in which the employee excels and in which improvement is needed.

If you ultimately elect to terminate an employee, insure that you have one valid business reason for the termination. Even though New Jersey is still considered an "employment-at-will" state, terminating an employee for no reason at all may expose you to a lawsuit for discrimination or wrongful termination. Consult with your attorney to review your documentation about the employee's performance. Prepare to tell the employee the specific policy violation or performance deficiency for which they are being fired.

Complete any necessary forms, documents or termination reports, as well as the final paycheck. Decide where and when you will conduct the meeting. There is no best time to fire an employee, but seek a time when you can meet uninterrupted and privately. If you anticipate an emotional or violent reaction, or that the employee may seek retribution in some way, have a witness present during the interview.

Tell the employee the truth about the reason for termination. Stick to the one valid business reason on which you based the decision. Be concise, be tactful, and avoid emotion or personal attacks on the individual. Make the decision final, and make no promises for the future.

Discuss severance pay, benefits and your policy for future reference checks, which might only include the dates of employment. Give the employee their final paycheck and the appropriate COBRA forms should they elect to continue any applicable insurance coverage. Make arrangements for returning company property.

You may need to tell others in the company about the termination. Keep the reasons for the termination confidential. Tell only necessary employees that their colleague is "no longer with the company." Other staff members may need the information to adjust their schedules, complete unfinished projects or assume additional responsibilities.

Although the best way to avoid the termination trap is better hiring, there are no guarantees in screening for perfect employees. Sometimes, despite all the training, coaching and discipline, an employee fails to meet expectations. Sometimes business conditions are such that termination is necessary, and good employees must be fired. When either happens, the fastest end to the relationship is the fairest to both you and the employee.