Best Practices for Remote Performance-Based Terminations
Terminating employees remotely is becoming more common as the number of remote workers increases. Firing an employee is never easy and is only further complicated when all parties are remote. However, with proper planning these conversations can have good, or even great, outcomes.
As I shared in Remote Performance Management, communication amongst remote employees can be tricky but is a vital skill for all remote workers and managers to learn. Managers should build the fundamentals of good performance management into their daily, weekly and monthly practices. This starts with clearly set expectations and regular 1:1s so managers and employees stay aligned and connected. Regular 1:1s provide an opportunity for managers to deliver ongoing feedback to avoid small development opportunities from becoming bigger performance issues that need to be addressed more formally.
Terminations are Costly and Impact Culture
According to the U.S. Department of Labor, the price of a bad hire costs at least 30 percent of the employee’s first year earnings, which can have significant impacts on a business. Zappos CEO Tony Hsieh once estimated bad hires had cost the company “well over $100 million.”
The way you treat exiting employees not only impacts the individual being terminated but can also have ripple effects on your culture. According to SHRM, CFOs shared that in addition to the costs associated with a mishire, companies should be more concerned with the costs associated with degrading morale and a drop in productivity of the remaining organization.
Can Termination Be Avoided?
Before jumping to a termination decision, make sure you’ve exhausted all of your options and you are confident this decision won’t come as a surprise to the employee.
- Has the feedback been discussed in regular 1:1s?
- Has more formal written feedback been shared with the employee so they clearly know what they need to improve?
- Have they been given ample time to turn things around?
- Are there other roles within the organization they may be a better fit for?
If you’ve exhausted all other options available to you and termination is inevitable, follow these best practices to ensure the exit goes as smoothly as possible.
Recruiter.com said it well: As with terminating an employee in person, there’s a right time and place to do so remotely. Rather than unceremoniously springing termination on an unsuspecting employee, smart (and kind) HR pros and managers will set up a formal meeting to handle the termination with grace and dignity. Schedule a video meeting just as you would schedule an in-person exit conversation and a time and place that’s convenient for the employee. Be mindful of time zone difference and the employee’s personal needs, such as if they have childcare obligations at a certain time of day.
Although I recommend writing a script in advance so you are prepared to discuss the reasons for the termination briefly, you should remain human in your delivery and approach. Although some activities, such as harassment or workplace violence, require immediate firing, most performance-based exits can allow for transition time (typically 2-3 business days) to give departing employees the opportunity to transition work before they sign off. Allowing exiting employees the opportunity to hand off work and say goodbye can go a long way in maintaining respect and professionalism between the employee and the company.
Do Your Homework (Legal Bits)
Although technically at-will employee terminations can occur at any time in the United States, this is not recommended. Termination processes have many moving parts. There are also many legal landmines that you should avoid. For the exit to go smoothly, all parties involved must be on the same page and be given proper time to prepare.
Here’s a great checklist to think through the legal bits:
- According to SHRM, many countries and states have specific provisions regarding payment at the time of termination and severance pay. Although not meeting face to face, employers must still adhere to these laws by either overnighting paychecks or paying by direct deposit.
- Do you have all prior performance feedback documented?
- What compensation must be paid to the employee? Will they be eligible for unemployment benefits? Are they owed a bonus or commission payment?
- Are there questions about whether the employee has any special protections that must be factored in? For example, does the employee have a known disability that hasn’t been properly accommodated?
- Are they being fired shortly after reporting misconduct (whistleblowing) or filing a complaint which could be deemed as retaliation?
Making sure you have evaluated all legal factors is critical to ensuring you have strong legal footing when terminating an employee, whether it is being conducted remotely or face-to-face.
Prepare Your Process in Advance
After you’ve deemed a termination is necessary, it’s important that you prepare for a smooth process in advance.
Here’s sample checklist to prepare your process:
- Direct managers should be the one to deliver the message. A short script should be prepared in advance of the high-level reasons for the departure. If you’ve followed good performance feedback practices, this conversation should not come as a surprise and the decision to part ways should be well understood by the employee. Managers should keep the conversation brief then hand things over to HR to discuss logistics.
- Managers should come prepared to discuss transition logistics, such as wrapping up outstanding work product, hand-off of customer accounts, and systems or processes they are the owner of.
- Managers should have a communication plan in place so those impacted by the departure are informed
- It’s best practice to have a third party on the call, such as an HR representative to speak to the logistical steps related to the exit, such as signing separation documents, healthcare instructions, final paychecks and other important information.
- Have a process to obtain personal contact details of the exiting employee should you need to contact them in the future, such as including them in an Alumni network or sending the exit interview.
- Identify who will be the main point of contact should questions come up, which is most often HR.
Disable Access to Company Systems
IT should be informed of the upcoming termination so they are prepared to disable access to key company systems. If a transition period is being offered prior to exit, it’s important that access is not disabled right away, but IT should be ready to disable quickly if the termination conversation does not go according to plan. You don’t want to treat your exiting employee like a bad actor. You also want to protect your company’s confidential information. If the termination is not amicable, access should be removed immediately.
To be on the safe side, companies can back up company information an employee might have access to before the termination meeting.
Collect Company Equipment
During the termination meeting, explain that you need to collect all company equipment, like laptops and phones as part of the exit process. Companies should have a process in place to recover company materials, which often includes asking the employee to mail them back to you and cover their shipping costs.
In some cases, the cost of returning equipment does not make financial sense if the cost of shipping does not exceed the depreciated value of the equipment or the equipment is too old to be repurposed. If this is the case, companies can choose to allow employees to keep their equipment if the appropriate security measures are taken to remove sensitive company information. Allowing employees to keep their equipment can be a helpful tool to ensure a smooth transition or as a negotiating tactic when aligning on separation terms.
Do an Exit Survey, both for voluntary and involuntary leavers
This may seem counterintuitive or uncomfortable but valuable learnings can come from asking your terminated employees about their experience and for the suggestions on how the company can improve. Asking involuntarily terminated employees for their feedback can go a long way in reinforcing that you care about all exiting employees, regardless of the circumstances of their departure. If the exiting employee is signing a separation agreement, you can choose to wait to send the exit survey until the separation agreement has been finalized.
Communicate to the Proper Channels
It’s important to not hide employee termination events from the broader team. At the same time, every employee does not need to be informed about every termination and should be shared on a need-to-know basis. The specific details of the departure should not be discussed to protect the privacy of the departing employee.
If the timeline allows, you should speak to impacted team members the same day of the termination to avoid gossip and unnecessary worry. You should reinforce that you are a culture of providing continuous feedback and they will always know if a performance-based termination is coming.
In closing, terminating employees is always a challenge for HR teams and managers alike. Exiting remote employees only adds to the complexity. However, with the right approach and proper planning, the termination experience can go smoothly for all involved.