How to Terminate an Employee for Poor Performance

How to terminate an employee for poor performance the right way.

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When it comes to performance management, making the decision to terminate an employee for poor performance is one of the most unpleasant tasks handled by HR, but it’s a part of the job. There are many reasons that employees may need to be terminated, but poor job performance is one of the most common. While employers are within their rights to terminate an employee for substandard work, the decision should not be made lightly and only taken as the last resort of a formal disciplinary procedure. Before it gets to that point, managers should try a positive approach to helping the worker meet job expectations.

How to Terminate an Employee for Poor Performance

In order for termination for performance to be fair, the employer needs to gather evidence that the employee wasn’t meeting job expectations and take reasonable steps to help the employee meet these expectations.

Step 1: Document, document, document

It is important for employers to document all evidence of poor performance in the form of written appraisals, performance reviews, and performance improvement plans (PIPs). In addition, any steps that were taken to investigate and communicate with the employee about their performance should be documented.

Step 2: Investigate poor performance

If poor performance is becoming an issue, the employer should do an investigation to uncover the facts and then meet with the employee to share the results of that investigation. The employee should be given the opportunity to respond. The investigation or meeting with the employee may reveal underlying reasons for the poor performance such as illness/disability or inadequate training that were not initially known. If this is the case, the employer has an opportunity to provide the support the employee needs to succeed.

Step 3: Give the employee the chance to meet expectations

The employer should provide a list of performance improvement goals in a written PIP that the employee is expected to meet within a certain timeframe. Support or training should be provided, as needed. The length of time given to the employee to meet these expectations may vary depending on the types of changes that are required and the quality and length of the employee’s service at the business or organization. In some cases, it may make sense to tie the time allowed for improvement to a part of the business cycle, such as the end of a quarter.

Step 4: Monitor progress during the review period

The employer should keep track of improvements during the review period. It is also a good idea to meet with the employee during the review period to discuss any changes to employee performance. Be sure to document the performance and any discussions during this review period.

Step 5: Poor performance hearings

If the employee fails to improve their performance during the review period, a formal meeting may be required to discuss the issues. A written letter should be sent to the employee with the date, time, and place of the meeting as well as the issues or areas of concern that continue to plague their performance.

In this meeting the employer will fully explain their case and the employee should be given the chance to respond and provide an explanation for the issues raised in relation to their performance. The employer should then lay out what the possible consequences will be if it is determined that their performance continues to fall short of the required standard.

Step 6: Making the decision to terminate

If all steps have been taken to communicate with the employee about performance concerns, the employee has been given time to improve and provided with appropriate training and support, and they have still failed to improve their performance; it is time to consider a demotion or termination. If it is determined that termination is the right choice, the employer should dismiss with notice and offer the chance for the employee to appeal.

Don’t Forget to Follow all Termination Labor Laws

To avoid a wrongful termination suit, it’s important to follow Hawaii’s labor laws for employee termination. Hawaii is generally an “at will” State, which gives employers leeway to let employees go without providing a reason, but there are some things employers should keep in mind before terminating an employee.

Remember also, that under Section 388-3(a), HRS, after terminating an employee, the employer is required to pay all earned wages in full at the time of discharge, or not later than the next working day.

Partnering with Makai HR

Not excited about employer laws but want to make sure you’re in compliance? We’ve got you covered through HR outsourcing! When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are compliant with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long and changes happen). When choosing a PEO to partner with, there are many things to consider including cost, services, and technology solutions. 

With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our customized PEO solutions are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet, or phone. We can truly improve your employees’ work benefits while freeing you up to operate your business.

What are you waiting for? Companies that partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!

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