Elevated HR Solutions: Terminations are never easy but they don't need to be hard

During the last while, I have had the privilege of meeting with many small business owners to discuss how I can take the "HR out of the business".  The topic of choice always seems to land on terminations.  I've been through my fair share of corporate terminations (one of which even ended in my life being threatened, but that's another blog in itself) and have certainly learned what to do and more importantly, what NOT to do.  It is an art - as are many actions integral to the HR world.

Unfortunately, I often get asked to come into an organization AFTER something bad has happened (reaction).  At any rate, this particular client had just gone through a "terrible" termination and were literally exhausted by the whole ordeal.  They claimed they had warned the employee over and over again that if the behaviour continued they would eventually end the employment with them and after 3 months of no change, the finally let the person go.  They claimed it was due to performance and then provided the statutory amount of pay as legislated by the province (thinking they were being nice).

The client did have a couple of things going for them:

A.) They had a policy on corrective discipline
B.) They had sat down with the employee multiple times
C.) They had a signed action plan

While it never went to court, lawyers eventually settled on an additional 4 weeks of pay (for a total of $8,425 settlement plus legal fees.)

"So let me get this straight..." I said, slowly, trying to comprehend the story. "So you spent 90 days, trying to coach someone, who you knew was inevitably uncoachable, and you still had to pay them out an additional 4 weeks of what you originally offered? Where's his employment agreement? Where's his termination letter?"

Pausing, they said they didn't really have an employment agreement and as for the termination letter, they just gave him his record of employment and told him it was over. Further to that, when I audited his employee file, there was only one action plan and no evidence of follow-up.

3 learnings came out of this:

1.) Ensure you have an employment agreement that stipulates what may happen upon termination without cause (remember, this is different per province and must comply with minimum provincial statutes).  You may elect to provide more (to mirror common law) but this is not mandatory.
2.) If you go so far as to have a policy on how corrective discipline works in your organization, you may as well follow it.  Remember - if you're already going so far as to writing down an action plan, meeting weekly, having crucial and tough conversations - you better make sure it is supported in writing that the employee understands the consequences if the behavior continues.  The consequences MUST be laid out.
3.) Always ensure a termination letter is included in the termination package. And the wording should be laid out in such a way that protects the organization.  In other words, "Effective immediately, your services are no longer required and we are terminating your employment agreement as per section 7.1, dated June 1, 2010. We relieve you of your job responsibilities immediately, so you may secure alternative employment."
4.) Finally - there is no such thing as little bit of cause.  If you are paying out something anyway, you are not alleging cause and therefore, should make no mention of poor performance or WHY you are letting go of the individual.  Yes, it FEELS like the right thing to do (to explain it) but don't get caught up in the emotions of it.  Pay them what is required inform them their services are no longer needed.  If you believe you have the right to terminate someone without pay, then you are alleging cause and you have to have ample proof that you can prove in court.

There is nothing nice about terminations.  You are responsible to  to do it humanely and discreetly to avoid Wallace damages / punitive damages, but that doesn't mean getting into a conversation. It's quick and simple.

What would I have done if I were working with the client prior to the termination?

After 2 weeks of coaching and clearly no improvement, knowing what the final solution was going to be...I'd have let him go.  Thank him for his services, pay him a bit more than what legislation requires, get him to sign a release for the additional monies and be done.  I save time (there is no credit given in court for the amount of "coaching" you do), I save legal fees (even it's lawyers talking to each other) and ultimately I've mitigated my overall risk (a bad seed in a organization can do more damage than what's at the surface.)

www.elevatedhr.com

Elevated HR: Determining the Salary Equation

Often when I am advising clients on their hiring strategy, I am also asked to help them determine what to pay an individual.  I always find it funny that the first question I am asked is, "What does the market pay for X?"  While a company certainly needs to be competitive, the first question any company needs to ask is "What can I afford in relation to the expected return on investment?"

Following that, 2 more questions need to be asked:

1.) What is the minimum education and experience needed to get this position off the ground and running?
2.) What is the performance I expect out of the first 90 days?

Then, it's time to ask what is the market paying and fit YOUR expectations into that range.

Here is an example:

I need to run pretty lean right now, but definitely need some administrative help to make sure my vendors get paid and my clients are paying me.  In addition to that, I need someone to send the initial teasers to potential clients and follow-up with thank-you's after pitches and finally schedule follow-up meetings with clients who have signed on.  This will allow me to focus more on sales and delivery, pitch to more potentials, therefore turning more potentials into clients, and turning more clients into lifers, therefore generating even more revenue.  By hiring this person, I would hope to triple revenue because I will have the time to do so.

If I'm currently bringing in $200 a month, by hiring this person I now make $600 a month, I decide I can afford $200 a month.  This includes vacation, health and dental benefits and sick benefits.  It does not include external training or the work/life balance options or the various creative options I will also offer the person.

Education isn't a factor (but basic skills like use of the Internet, grammar, reading, writing etc. is necessary - however the school, program etc. is not important to me).  I need them to somehow prove to me they can take an instruction and follow through.  They may not have direct office experience, but they need to know how to use Google and figure out the problem at hand (so if they have a degree and no experience, that would work to).   My expectation is that after two weeks, I'm not having to explain myself, they've got it and can run with it.  I may not always agree with their way of completing the task, but customer service must always be first.  First impressions and follow-up impressions will be something I look for.

If I go to various websites on the web - I can see that the market is paying anywhere between $50 to $350 a month for the same position.  I can't go above the $200 mark, so I look for less education and less experience.  I do need someone to be smart, and stay for at least 6 months, so instead of paying the bottom, I pay $100 and set performance measures during the first 90 days to get them to the $150 mark.  If they don't meet my expectations, they don't have a job, but I also didn't overpay them in relation to my budget either.  My benefits package and work/life balance also makes up for the other part of the total salary package - which I don't offer until after the 90 day mark. 

And this is how I determine the salary equation.  What can I afford vs. the projected return vs. education vs. experience vs. external market.  I want to be fair - but I need to do what's right for the business.

http://www.elevatedhr.com/