Article originally published in the American City Business Journals on August 2, 2021 (Revised).
Terminating a direct report is one of the most difficult things a boss does. There are two broad reasons for terminating a direct report: “with cause” and “without cause,” even though there is a “cause” for every termination.
With cause terminations are due to the employee violating the law or the company’s code of conduct.
Without cause terminations are due to a reorganization eliminating the position, the individual is not performing the job after given the chance to improve, the skill requirements have changed and the incumbent has not developed the needed skills, a change is needed to head in a new direction, you have lost confidence in them or the individual is a toxic leader.
The reasons for terminating an employee must be documented in the event the employee decides to bring legal action. The decision to terminate should be reviewed by legal counsel and by HR.
With cause and without cause terminations need to be done in a way that allows the individual to maintain their dignity. As I was rising up through my company to the position of CEO, I learned that informing a direct report “we are going to part company” takes some of the sting out of them being informed of the decision. I gave them time to process the news with their family before their departure date. However, if I felt the individual’s immediate departure was in the best interests of the company or they would be adversarial or a security risk, they left the company that day.
Termination benefits including pay and continuation of medical insurance benefits were granted per company policy, based on years of service. Higher level employees were asked to sign a non-disclosure non-disparagement agreement in exchange for additional termination benefits. These benefits were granted to employees who were terminated without cause. For terminations with cause, benefits were granted depending on the circumstances.
In without cause situations, I let the individual participate in writing their departure announcement. I let them tell their direct reports before their departure was publicly announced.
I didn’t want to burn bridges with the individual, nor did I want them to burn bridges with me or the company. They needed a recommendation, and in most situations, I gave them one. I have placed many individuals who depart the company into my network to help them get a new job. Those who burned bridges did not receive the help others received.
In many situations, the reaction by the employees within a department or business unit previously led by a terminated employee is “what took so long.” This was the reaction when I terminated a toxic leader who ruled through fear. I used to work for him, was promoted to be his peer and three years later again promoted to be his boss.
After his termination, I replaced him with a very effective leader. It took six months before the employees started to take risks and make decisions without checking with the boss. The business unit started to grow again.
I always wondered why his previous boss never terminated that individual. He caused significant damage to his organization.
Terminations are never easy. Allow the individual to maintain their dignity. There is less likelihood they will burn bridges. How you handle terminations is a reflection of you as a leader.
Stan Silverman is founder and CEO of Silverman Leadership and author of “Be Different! The Key to Business and Career Success.” He is also a speaker, advisor and widely read nationally syndicated columnist on leadership, entrepreneurship and corporate governance. He can be reached at Stan@SilvermanLeadership.com.
