Ending the Employment Relationship: Doing it Right
By Fiorella Callocchia, CHRP

The premise behind ending the employment relationship the right way is that it is possible to maintain a professional corporate image in the marketplace, while simultaneously minimizing the negative impact on a terminated employee’s psychological and mental well-being.

A former employee may not like the fact that the employment relationship has ended, but at least he or she can say that he or she was treated fairly, professionally, respectfully and with dignity.

Advocate

The former employee may not have been a good fit with the organization for a myriad of reasons; however, he or she can remain an advocate for the company, or a customer who still buys the company’s products and services.  He or she may even be a talent scout who refers potential staff.

Just as no company wants disgruntled customers sending negative messages through their network for friends, peers and associates, no company wants former employees sending the message that the organization is not respectful or professional.

Exit Strategies

A positive exit strategy is critical.  Consider the impact ext strategies have on:

• Your image with other employees within the organization
• Your reputation as an employer in the marketplace
• The perception your customers, clients, suppliers and vendors have of you
• Your legal obligations and the potential for wrongful dismissal lawsuits
• The potential for the ex-employee to serve as “ambassador” and marketing agent for the company
• The potential for the ex-employee to become or remain one of your customers

Policies and Practices

These issues may all seem secondary to the actual act of terminating an employment relationship; nonetheless, they should drive all of an organization’s HR policies and practices.

Specifically, they should impact hiring; relationship building; assessing performance; developing employee skills; providing constructive feedback; managing performance problems; implementing corrective action procedures; and employee coaching and counseling.  All of these practices demonstrate a company’s commitment to its human resources.

Reputation

The key to successfully ending an employment relationship lies in the steps that are taken to avoid termination entirely.  This starts with implementing effective performance review and performance management programs.  The following questions provide a checklist for auditing a company’s current practices:

• Does your organization have a policy and process for corrective action / performance / improvement / progressive discipline?
• Is the performance review / management system an objective means of assessing and rewarding an employee’s contribution or value added?
• Have all team leaders, managers and supervisors been trained on how to review and assess employee performance objectively and in quantifiable terms?
• Are previous performance review ratings and related comments consistent with the decision to terminate the employment relationship?
• Have managers (including team leaders and supervisors) been trained on the organization’s termination policy and related procedures?
  

Preparation

While a termination meeting is a stressful task for any manager, there are a few simple steps that a manager can take to increase the professionalism of the circumstances under which an employee is let go.

Location

Set a location for the meeting that is private, away from a lot of employee traffic and ears, and where there will be no interruptions.  Ensure the telephone is put on call forwarding or voice mail.  Turn off your cell phone or pager.

Timing

Conduct the interview mid to late afternoon on a Tuesday, Wednesday or Thursday.  Do not conduct the meeting on a Friday, which creates a downward emotional spiral for the employee and his/her loved ones.

It is best if the day preceding the termination meeting is a regular business day.  Out of respect for the employee, avoid terminating the relationship on a holiday, the employee’s birthday or an employment anniversary.

HR Support

Arrange for an HR representative or outplacement consultant to be available after the meeting to offer support to the employee, to help explain the next steps, and to provide job search expertise.

Exit Package

Depending on whether the employee has been terminated for just cause, you may have to prepare an exit package that is comprised of some or all of the following:

Termination Pay – a minimum amount of notice (or pay in lieu thereof) must be given to the employee, depending on length of service.  Contribution to maintain an employee’s benefit plans must continue to be made during the notice period, even if the employee has received termination pay instead of working part of all of the notice period.

Severance Pay – There are legislated minimums for severance pay.  For long-service employees (5 years and longer), consider such things as length of service with the company; whether the position held was specialized; and how easy or difficult it will be for the individual to find alternative employment.

The final point requires consideration of the age of the individual and the market demand for candidates with his/her skills.  The more specialized the skill base, the more difficult it may be for the individual to find another job.  Seek counsel from an employment lawyer who will provide input based on common law principles.

Other Calculations – In addition, calculate and include in the exit package the following: final pay owing, outstanding vacation; unused overtime; expenses/payments owing; and the impact of benefits, pension, RRSP, etc.

Outplacement Services

Many of today’s “Employers of Choice” are offering employees outplacement / career transition services to increase the chances of former employees getting back on their feet and minimizing the length of employment.

The goal here is to provide the individual with the tools to secure employment on his or her own, in the shortest amount of time possible.  Such tools include a resume, a cover letter, a portfolio, interview skills and a job search strategy.

Cost: The cost of outplacement services can run anywhere from 5-10% of base salary.  By helping departing employees become re-employed as quickly as possible, such services greatly reduce the negative impact on the former employee.

Diplomacy

The following series of steps should be followed during the termination meeting:

Explanation: Briefly explain the reasons for severing the employment relationship.  Advise the employee that the decision was well thought out (hope fully), difficult to make, and cannot be reversed or negotiated.  Stick to the facts or relevant behaviour, keeping personality out of it.
Review: Review the termination letter with the employee, including (where applicable) severance pay; compensation for accrued; unused vacation time; continuation of health and life insurance benefits; other benefits; re-employment assistance; Employee Assistance Program, etc.  If an HR representative is in attendance, he or she could assume this task.  Have a written summary of the terms for the employee to consider.

• Outline the next steps in the termination process, such as the last day of work, return of the company property, manuals, lists, keys and uniforms, etc.
• Thanks the employee for his/her past contribution.
• Extend a handshake and offer the employee your best wishes on behalf of the company.  Express the confidence in his or her future employability.
• Encourage the employee to leave right away and perhaps come back at another time or call team members to say good bye.

Providing References

While providing an employment reference for a terminated employee is a thorny issue for many managers, a manager will only be called for a reference if the terminated employee has provided his or her name to a potential employer.  This means that the terminated employee has given his or her permission for you to disclose information about his / her employment with your organization.

The Facts – In disclosing why the employment relationship was terminated, stick to the facts and do not provide assumptions or unwarranted, unsolicited information.  Express professional opinions that are based on documented facts and observations, as found in performance reviews, corrective action letters, and so on. 

While you take all of the proactive measures to avoid terminating an employment relationship, there will be instances where termination is necessary. 

Attitude – Be prepared and conduct the meeting and related activities in a fair, professional and diplomatic manner.  Such an attitude will maintain the integrity of the organization and may make a difficult experience a bit less traumatic.

Fiorella Callocchia is a principal of HR Impact, a management consulting firm specializing in HR management and organizational development.  Fiorella is also an author for Carswell’s Best Practices series.  She can be reached at (905) 337-0293 or online at www.hrimpact.net.

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