Termination

Purpose of Process (see below how HRSource™ can help):

To attempt to retain the employee, and where this is not possible, to ensure a smooth transition of responsibilities, protect company assets, and create an atmosphere that encourages the employee to consider returning in the future.

Recommended Steps in the Process:

1. After the employee gives notification of termination, the employee's manager should meet with the employee to determine the reason for the resignation and what can be done to retain the employee:
   • New job responsibilities?
   • Advancement opportunity?
   • Changes in the working conditions?
   • More pay?
     
     
2. Determine if others in the department are considering terminating from the company. Perhaps a broad issue affecting the morale of many in the department needs to be addressed.
   
   
3. After the meeting between the employee and manager, discuss with the manager what approach to take. If offering new job responsibilities or additional pay, consider the reaction of other employees in the department. There's a risk that a generous offer may demoralize others in the department or encourage them to leave. Also, addressing only pay in the counter offer will not promote long term retention, especially if the employee has multiple concerns.
   
   
4. If the decision is to provide a counter offer (of new job responsibilities, changes in the work environment, or increase in pay), obtain approval from the appropriate level of management.
   
   
5. The manager presents the counter offer to the employee. If the employee accepts, then this process ends. Monitor the employee's morale periodically in the future. If the employee does not accept, or if you decide not to provide a counter offer (this is usually the correct decision), then continue with the process.
   
   
6. Request that the employee provide a letter of resignation, if a letter has not already been provided. Request the employee to provide at least two weeks of service before resigning.
   
   
7. If the terminating employee has unique knowledge, the manager should immediately assign his/her responsibilities to other employee(s) and encourage the rapid transition of information to the other(s).
   
   
8. Contact all departments that issue company property to determine what, if anything, the employee needs to return before the termination date, including the following:
   • Finance: outstanding expense reports, outstanding advances (tuition or expense report), company credit cards
   • Operations: company tools, safety equipment, other company property
   • Information Center: books, periodicals, manuals
     
     
9. Send the Employee Termination Agreement form to the manager for completion with the employee. This form reminds the employee about the proprietary nature of the information to which the employee may have had access (see sample).
   
   
10. Provide the employee with information related to the termination:
    • Resignation Questionnaire to request information from the employee regarding his/her observations of employment at the company (see sample).
    • Summary of benefit options and COBRA rights.
      
      
11. Inform payroll of the termination and termination date, so payroll can issue the final paycheck on the employee's last day. Request that payroll send the final paycheck to Human Resources.
    
    
12. Meet with the terminating employee on their last day to discuss the following, as applicable:
    • The Resignation Questionnaire form. Ask the employee to explain and expound on his/her answers. If the employee has not completed it in advance, complete the form orally. Also consider conducting the exit interview after the employee terminates (see tips below).
    • Benefit options after termination, including COBRA Election form and health insurance conversion to individual coverage.
    • Provide the Health Care Spending Account Continuation of Coverage Election form, if the employee has a Health Care Spending Account.
    • Notification of state unemployment benefits, where required
    • Retirement plan (401(k)) information, including vesting, rollover options, outstanding 401(k) loan issues.
    • Stock option and deferred compensation information.
    • Release, if applicable (see the process on Creating and Obtaining Releases)
    • Provide the Certificate of Group Health Coverage form
    • Collect the completed Employee Termination Agreement form.
    • Collect the acknowledgment of receipt of benefits and COBRA information.
    • Collect the employee's company badge and company keys.
    • Provide mandated state notifications (see example for the state of California)
      
      
13. At the end of the meeting, provide the employee with his/her final paycheck, and bid a friendly farewell.
    
    
14. Provide feedback from the employee's Resignation Questionnaire form to the manager, if appropriate, and others as appropriate.
    
    
15. File the documents collected during the final meeting with the employee in the employee's personnel file. (See also the process on Maintaining Personnel Files)

Process Tips:

Maintaining a positive relationship with the terminating employee will increase the possibility of rehiring the employee in the future. Have the manager contact the employee a few months after the termination to see if the employee is ready to return.

Exit Interviews
Look for trends in exit interview responses. Are there several complaints regarding a particular supervisor? Is the organization not providing enough opportunities for training and career development? Is there a pattern of concerns over the compensation and benefits package? If a pattern is discovered, consider implementing programs to address the issue and preempt further employee turnover.

Some experts recommend conducting the exit interview after the employee terminates rather than on the employee's last day. On their last day, employees are often preoccupied with many other issues related to their transition and may be reluctant to give accurate answers for fear of "burning bridges." Instead, call the employee seven to ten days after the their last day. After a seven days employees are typically more willing to talk calmly, candidly, and objectively about the company and their decision to leave. After ten days, though, employees feelings will diminish and they will be less willing to conduct the exit interview. If you conduct exit interviews after the employee's termination date, then inform the employee before they leave that you will contact them in one week and explain that their feedback is important to the company.

Retention
In addition to the reasons stated above, employee turnover can be reduced through improved employee communication (especially listening to concerns and providing recognition), providing training and advancement opportunities. Here is a list of benefits and perks that can work for retention:

• More office social events
• More flextime options permitted
• More input sought from workers on policies and procedures
• Performance bonuses added or increased
• Casual dress days added or expanded
• Higher raises given
• Vacation/leave-time added
• Telecommuting allowed/increased
• Employee entertainment/service discounts
• Job-sharing allowed/increased
• In-office services (e.g. dry cleaning pick-up, etc.)
• Comp time offered/increased
• More diversity initiatives added
• Sabbaticals offered/lengthened
• Employees allowed to bring pets to the office

How HRSource™ Can Help:

HRSource™ can help in the administration and reduction of terminations:

• Turnover metric reports can identify patterns to help pinpoint the cause and develop solutions (e.g. management training, adjusting the work environment, etc.)
  
• The HRSource™ termination checklist can help ensure all tasks related to the termination are completed
  
• HRSource™ can store and track feedback from exit interviews
  
• HRSource™ can automatically advise other parties of the termination (e.g. payroll, IT, finance, etc.
• HRSource™ can help ensure that departing employees return company property
• HRSource™ can track termination reasons to help identify turnover causes
• Documentation of termination data, especially for terminations due to disciplinary reasons, can be stored in HRSource™