box of belongings in office

One of the most daunting responsibilities of small business owners and managers is recognizing when it’s time to fire an employee. Whether the cause stems from a violation of company policy or poor work performance, you’ll likely feel some emotional unrest over the decision.

If that weren’t stressful enough, you might also worry that firing the employee might come back to bite your business – legally and financially. After all, there’s no shortage of horror stories about companies that were hit with costly lawsuits or unemployment claims after terminating someone.

Make Sure You Cover These Bases Before Saying “You’re Fired”:

  • Have an employee handbook that explains company rules and policies thoroughly and clearly. Give a copy of your handbook to all employees, and answer any questions they have.
  • Create detailed job descriptions that clearly define what responsibilities employees need to fulfill in their positions.
  • Provide employees with explicit performance standards you expect them to meet. This is best accomplished through written goals and target metrics that are updated at least annually.
  • Document in detail all instances when an employee has violated your rules or policies.
  • Document all written or verbal warnings given to employees.
  • Document all records of employee evaluations.
  • Document all steps taken to solve issues with problem employees.
  • Always follow your company’s written policies regarding disciplinary actions and termination procedures.
  • Finally, make sure you have a basic understanding of your state and federal employment laws.

You can never be too careful when making the decision to terminate an employee. If you have any doubts about whether you are justified in terminating an employee, don’t risk becoming the target of lawsuits or unemployment claims – contact a SCORE mentor for advice.

Download this tip sheet for a list of questions to ask yourself before making the decision to terminate.