Ethics Engaged | Winter 2019
The Ethics of Terminating Employees
Keeping ethics top of mind will ensure your decision to terminate is for the right reasons.
Elizabeth Pittelkow Kittner
Vice President of Finance, GigaOm
Exploring Ethics in Business & Finance Today
One of the most difficult experiences you are likely to have as a leader in the professional
realm is terminating an employee. It can be life-altering for the person being terminated,
their family members, and even their colleagues. A termination can impact the morale within
your organization and the workloads of your remaining employees. When emotion
inevitably creeps into an event like termination, it is important to keep ethical considerations
top of mind, allowing you to make clear, conscious decisions while also caring for the
WHY SHOULD YOU TERMINATE SOMEONE?
Many employers are at-will, meaning they reserve the right to terminate employees without
cause. However, just because an employer can legally terminate someone at any time does
not mean they should. Rather, there should be a strategic imperative.
Leadership consultant Simon Sinek spoke about the relationship of trust versus
performance in employees during a keynote presentation at the AICPA’s 2019 ENGAGE
conference. His four-quadrant chart helps to define the level of trust and performance an
employee brings to their organization, and therefore further helps to identify which
employees are moving the organization in the right direction, toward its defined
performance objectives and toward a culture of high trust and performance where
employees exhibit strong personal character.
Let’s examine the employees in each of Sinek’s quadrants:
High Performance, High Trust:
Ideally, we want most employees to fit into this quadrant.
They are the work product superstars who also demonstrate high emotional intelligence
and character. These are the employees you want to continue giving work they enjoy and
encourage them to serve as coaches and mentors to others within the organization.
Low Performance, High Trust:
These are the likable employees that fit into the culture well
but require extra coaching on work performance. Giving them opportunities to share their
emotional intelligence behaviors with others can benefit the company, but you will have to
determine why their work performance is not strong, figure out the root cause, and work
on an action plan. Perhaps there is a lack of motivation, skills deficiency, or personal
distraction. Whatever the case, you will need to determine the course of action best for the
employee and the organization.
Low Performance, Low Trust:
These employees do not perform well and consistently do not
exhibit high emotional intelligence. Employees in this quadrant take the most work to
remediate. Coaching for performance and behavioral skills may be possible, but is it worth
it? Employees in this category tend to be terminated more often than those in any other group.
High Performance, Low Trust:
These employees are some of
the toughest to manage. The organization values their high
performance, but people do not generally enjoy working with them.
Sinek defines these people as “toxic” team members. They tend to
stay in companies longer than Low Performance, Low Trust
employees because their work product is strong, and finding and
training replacement talent is often difficult and costly. Sinek
suggests attempting to coach these employees on emotional
behaviors first, but if they prove to be uncoachable, terminating
them to protect the overall cultural health and morale of the
company is in your best interest.
From a leadership perspective, you cannot afford to be impulsive
with termination decisions. When emotions are running high, it is
tempting to terminate someone who is difficult to work with, but
consider the remediation steps above. If remediation does not
seem to be working, consider involving a few people in making the
termination decision. However, you should also consider that
immediate action may be appropriate under certain circumstances,
like if an employee demonstrates destructive behavior, such as
threatening an employee verbally or physically, viewing illegal
material on their work devices, using drugs at work, or damaging
HOW DO YOU PREVENT THE NEED TO
Assessing existing employees in the trust/performance quadrants
above gives you a starting point for how to coach employees on
improving performance and meeting your organization’s cultural
values. However, reducing the number of terminations could
stem from implementing robust hiring practices first. Consider
implementing skills-testing, assessing values, and involving several
people within the organization in the interviewing and hiring
process. Take all the time needed to hire the right person as
opposed to rushing to fill a vacancy or immediate work product
need. If you require a fast resource hire, consider bringing in help
on a contract or a part-time basis to give you more time to decide
if a person is a good long-term fit.
Reduced turnover and terminations could also stem from
better understanding employee satisfaction. Think about issuing
anonymous quarterly surveys. When employees feel both
anonymous and heard, they are more likely to share useful
feedback, which will help you determine if there are performance
or trust issues within your organization that need to be addressed.
In addition to periodic surveys, a strong show of ethical consideration
would be implementing a whistleblower program where employees
can provide anonymous real-time feedback on issues they feel are
significant to their work experience or the organization overall.
Ensure whistleblowers cannot be targeted or dismissed, which would
dampen culture and could violate whistleblower protection laws.
WHAT ARE THE RIGHT WAYS TO
Know the rules. Even if your organization operates as an at-will
company, you still need to ensure you are not terminating someone
for the wrong reasons. Further, even if you terminate someone for
what you believe to be the right reasons, a terminated employee
may still bring a wrongful termination claim against your organization.
Wrongful termination situations include if a company is discriminating
against an employee, retaliating for something an employee reported
or refused to do, or the company is frustrated with the refusal of an
employee to take a lie detector test. Discrimination is one of the most
common categories employees report as a reason for wrongful
termination. The Equal Employment Opportunity Commission
enforces several laws against discrimination, including the Civil Rights
Act of 1964, the Age Discrimination in Employment Act of 1967, Title
I of the Americans with Disabilities Act of 1990, and the Pregnancy
Discrimination Act of 1978.
The lesson here is that it is important to document the reasons for
termination of an employee and to offer terminated employees
benefits conditioned on them signing a claims release form. Benefits
might include severance pay, COBRA premiums, and job placement
services paid for by the company. Additionally, you must provide
enough time for terminated employees to review the claims release
form with enough time allotted by federal law. For example, for a
release to be compliant for age discrimination claims (employees
who are 40 or older), the release must include specific language, a
21-day consideration period, and a 7-day revocation period.
Severance offerings should also be consistent based on similar
termination situations. Many organizations do not publish
severance policies to their employees, but they should still follow
a basic structure. For example, perhaps an organization offers two
weeks per year of service. Therefore, if an employee worked for
four years and received eight weeks, another employee who
worked four years should receive similar severance pay.
Organizations can deviate from policy, but they need to document
the reasons for the change. For example, perhaps an employee
came into the company with a termination provision for severance,
or perhaps they negotiated more severance as part of their
termination. Consult an employment attorney to ensure you are
terminating employees for the right reasons and with the correct
termination paperwork in place.
Terminating an employee is likely to be one of your most difficult
experiences as a business leader, but by sticking to a strong ethical
framework, you can take comfort in knowing that you are doing it
for the right reasons and in the right way.