Two to Hire – Two to Fire

July 2, 2007

Business owners frequently ask, “What do you recommend to help us avoid the possibility of a wrongful termination charge by an employee?”  The easy answer is don’t hire the wrong person for the job. But the reality is that every business owner will someday be faced with the unpleasant task of having to terminate an employee for one reason or another. 

How can a business avoid terminations and retain good employees?
Diligence in hiring is the first step—always check background, references and driving records if driving will be a part of the employee’s job.  It is recommended that two management level people be involved in all hiring decisions.  Having a second set of eyes to review an applicant’s qualifications is a good procedure to follow.  This helps ensure the hiring decision is based on the candidate’s qualifications and work experience rather than one person’s likes or dislikes of an applicant’s personality. 

Next, training and orientation for new employees is essential, but it doesn’t stop there. Providing ongoing opportunities to learn more about the business and improve skills will help keep employees motivated. Mentoring those who show initiative and promise can develop future leaders.

Giving periodic feedback to employees on their job performance is also important, but shouldn’t be limited to scheduled reviews. Don’t assume everything is fine just because an employee doesn’t complain. Employees want to know they are doing a good job. A simple compliment on how an employee handled a situation will reinforce desired behavior and tell employees their efforts are noticed and appreciated. Giving occasional rewards is also worth the time and any minor expense. When corrective action is needed, a positive approach with specific recommendations can help avoid embarrassment or resentment and possible future allegations of unfair treatment.

What to do When Termination Seems Inevitable
Decisions to reprimand or terminate employees should always be based on documented facts and observations, not on emotional responses to a situation or on personal judgements. Sometimes “just the facts” may not provide enough information and employees may not be forthcoming about problems. An example… After one year of employment, a service technician began to arrive late in the morning and often seemed distracted. His co-workers were tolerant, but the service manager was strict about punctuality and was irritated by the employee’s tardiness and attitude.

In truth, the employee liked his job and was meeting performance expectations. The problem was that an elderly parent had recently moved into his home and required special care in the morning. In this case, a simple schedule change could solve the problem and help relieve the employee’s stress. It also would demonstrate the manager’s willingness to make accommodations for a good employee.

Sometimes it is necessary to terminate an employee because of poor performance even when good hiring procedures were followed and the employee started out on the right foot.  Make certain all terminations are fact-specific. Is the decision consistent with how “similarly situated” employees have been treated in the past? 

You may also want to consider having two management personnel involved with the termination.  Should the terminated employee ever dispute what took place, you have a witness to verify what was said.

Implementing the “two to hire – two to fire” strategy may be an effective risk management technique for your business.

This article provided courtesy of Federated Mutual Insurance Company, your association’s recommended insurer.  This publication is intended to provide general recommendations regarding risk prevention.  It is not intended to include all steps or processes necessary to adequately protect you, your business or your customers. You should always consult your personal attorney and insurance professional for advice unique to you and your business.  ©Copyright 2005 Federated Mutual Insurance Company, All Rights Reserved


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