Hiring & Keeping Salespeople - Part 5 -Employee Termination

This necessary activity can have negative consequences for both employee and employer.

Leading Reasons For Employee Termination

• Dishonesty.
• Theft.
• Violation of company code of conduct.
• Disruptive behavior.
• Unproductive performance.
• Non-work related problems affecting job performance including drugs or alcohol.
• Incompetence.
• Breach of rules or policies.
• Conflict of interest.
• Unreliable performance.
• Insolence or insubordination.

In the past 4 issues of FURNITURE WORLD, this series has examined the importance of retaining the people you have on staff, given the extreme shortage of applicants ready, willing and able to work in retail generally and furniture stores specifically.

Our premise was based on the assumption that the management and staff you seek to retain are motivated to succeed and will do so, given the proper training and a clearly-defined job combined with measurable goals.

If, after reading these articles, you do not have a training program with comprehensive job descriptions and measurable goals for individual success, then drop everything! Start focusing on creating a more accountable and civilized business environment with a store that is a better place to work and a better place to shop.

Even in the most progressive furniture stores, where the organization's growth and prosperity is built on the individual success of many associates, some "bad apples" occasionally must be removed from the tree.

Yes, we are talking about that most unpleasant of managerial tasks, terminating an employee. Of all the responsibilities that business owners and managers have, none is likely to be more distasteful and distressing than having to fire someone. To do it right, communication and documentation are essential.

DEALING WITH PROBLEM EMPLOYEES
When faced with a problem employee it's not unusual for retail managers to make several attempts at repairing the situation while mostly trying to ignore the whole situation. We may hope that things will improve, or simply avoid the issue by attending to other chores. Unfortunately, that may be the worst solution of all. Ignoring the problem generates a negative cloud that hovers over you, the problem employee and the rest of the staff.

Losing your job – including getting fired – ranks right up there with divorce and the death of a loved one as the most stressful and depressing events. For the manager who has to communicate the termination, the event is not a lot easier. Research has shown that managers run double their usual risk of a heart attack during the week after they've fired someone.

During my 30 years of working in furniture stores, I have had to layoff hundreds. These were mostly due to corporate cutbacks, but there were also dozens of terminations for poor performance or other unacceptable actions. Firing someone may be necessary, but for most of us it will never be fun.

EMOTIONAL PITFALLS
Here are some of the emotions managers may experience during and after a termination:

• Resentment combined with self-pity that they are forced to perform this dastardly deed.
  
• Guilt about the fate of the person who will be terminated, and probably – hopefully – some compassion as well.
  
• Anger at the person being fired as well as toward upper management or ownership for being forced into this uncomfortable spot.
  
• What may be the biggest trauma is the fear of facing the person about to be terminated and an uneasy feeling regarding his or her response.
  

LEGAL PITFALLS
And, of course, there are legal pitfalls. In this litigious society, a firing improperly handled can cause the company much more trouble than the wayward employee ever did.

Fire an employee the right way, and the stress is temporary. Fire them the wrong way and you can have some serious long-term consequences.

DOCUMENT YOUR COMMUNICATION
In good times and bad, your employees must always know how they are doing. Hopefully, each of them is working against quantifiable goals so that there is nothing subjective in your assessments of their performance.

This is as important as anything a furniture-store manager can do. Good documentation benefits everyone in the organization, not just the people who are having a hard time succeeding. However, for the purposes of this discussion, we will limit our discussion to those who seem to be failing.

Action Plans: You have to constantly talk with these people and set up action plans. If you don't, you are just as guilty as they are for their failure. Don't ignore the problem, and don't assume it's going to go away. You must let the employee know that there is a problem and what it is.

Deadlines: You must communicate what you want to see accomplished by a deadline. Set up some short-term goals that indicate that the problem is being addressed successfully. Make it very clear when you expect to see these positive results.

THE THREE PHASE TERMINATION PROCESS
In cases when the employee is unable to fulfill the goals, the termination process for continued poor performance should have three phases.

• Verbal warning for behavior or quality of performance. While the warning is verbal, keep written notes on what you said, the employees' response, and when and where the warning occurred.
  
• Written warning. This is a more serious warning given after the initial verbal warning when the problem has not improved or has actually gotten worse.
  
• Written termination. When all else fails, put it in writing and cut the cord.

In the more radical cases of theft or some other unacceptable action, you will want to go directly to phase three, but you will need to make a case, with documentation, against this person first. As we said earlier, improperly handled termination can lead to a load of trouble.

In fact, you should document your meetings with every employee. You want to create a history – a paper trail – that shows you have given this person every reasonable opportunity to succeed. Copies of all written as well as verbal warnings and the termination paperwork should be kept in the employee's file. Anything else that pertains to the problem that the employee is causing should also be kept in this personnel file.

• Notes from the verbal warning, all written warnings, complaints by fellow employees, complaints by customers or vendors. Notes of discussions or meetings where issues were addressed.
  
• Signed agreements on action plans for employee's improved performance.
  
• Any supporting documentation: time cards, records of missed deadlines

Do not try to create this documentation after you've fired an employee. This will appear to diminish your credibility should the issue ever go to court. Documentation should be an ongoing process, a regular part of your human resources management.

This creates the paper trail to support your claim that the employee was failing and that you worked with the employee and warned the employee that the problem existed. Employees who are fired the right way, fire themselves. You have given them every opportunity to improve their performance, and they have chosen to fail.

Avoid Wrongful Termination Lawsuits
According to Gilmore F. Diekmann, a San Francisco-area lawyer and author specializing in human resources issues, employers who lose wrongful-termination cases in court have a few things in common. We hope you don't see yourself in these bullet points:

• Promises of long-term employment were made.
• Failure to investigate properly before termination.
• Failure to document poor performance or misconduct.
• Failure to provide clear job descriptions.
• Failure to define an employee's responsibilities and duties and expected levels of performance.
• Subjective instead of objective evaluation criteria.
• Inconsistent treatment of employees.
• Absence of clear policies and procedures for resolving grievances and employee complaints.
• Different managers established differing or conflicting expectations for performance levels.

Beyond the issues of communication and documentation discussed in the main portion of this feature, you must avoid vague or misleading promises about an employee's future with the company or you might compromise your ability to terminate at will. Also, one person, the appropriate manager, should ultimately determine job-performance standards. Too many cooks spoil the brew.