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Dealing with a difficult or underperforming employee can be extremely challenging, and sometimes, it is appropriate to let an employee go. However, terminating an employment contract comes with its own challenges.

Telling someone that the company is terminating his or her contract can be uncomfortable, and employees do not always take the news well. In addition to being an unpleasant experience, a termination can also become a company liability if it is not handled properly. It is important to take the right steps before a termination occurs to help minimize this risk.

Clearly communicate expectations

It can be good practice to communicate expectations at the start of someone’s employment with the company. This helps prevent any confusion and allows time for performance to be adjusted before it becomes an issue.

Document performance issues

If performance issues do arise, it can be valuable to properly document them. If it later becomes necessary to terminate the employee’s contract, you will have clearly documented reasons for doing so. Without proper documentation, some terminations could appear to be acts of discrimination or retaliation.

Offer constructive feedback

Just as it is important for your company to keep good records about performance issues, it is also important to communicate those issues to the employee. By providing constructive feedback to the employee, you can help him or her recognize that there is an issue and, hopefully, try to remedy it. Good communication can also help prevent the employee from feeling blindsided if he or she finds out later that things aren’t working out.

Allow an opportunity for improvement

If it makes sense under the circumstances, try to make an improvement plan with the employee. Set goals toward improvement, as well as reasonable time frames for the employee to meet those goals. You may also consider helping the employee access available resources that may help him or her achieve those goals.

Other possible considerations

Sometimes, a termination is unavoidable. Still, it can be prudent to avoid making rash decisions, and instead, take the time to consider a few final points.

Before terminating an employment contract, consider if:

  • The decision is being made for emotional reasons rather than logical ones
  • A different disciplinary option may be more appropriate
  • The company has treated other employees the same way in similar situations
  • The timing of the termination may appear suspicious

Although a termination may be the right decision for a company, it is a decision that can come with some risk. However, there are certain steps companies can take to help reduce the risks associated with necessary terminations.