Autumn has officially arrived in North America. It
marks the transition from summer into winter. It is the time of year that
deciduous trees shed their leaves, changing to a reddish hue before finally
succumbing and falling to the ground. It is also the season during which
days get shorter and cooler and precipitation increases. It will eventually
lead to winter, a time of year often associated with gloom and death.
This is a time of year many
gardeners look forward to as it highlights the season where many decide what
plants and trees will be shed and replaced. Farmers spend this time plowing
over their fields and deciding what crops to sow in their freshly cultivated
fields in the spring.
This is the time of year that
I often reflect on the writings of Jack Welch, one of the most successful
and controversial CEO’s of the last thirty years. Whether you like him or
not, “Neutron Jack”, a nickname he acquired in the 1980’s, took GE
from $26.8 billion in recorded revenues in 1980 to $130 billion when he left
in 2004. He accomplished this with 112,000 fewer employees then when he
began and grew GE’s market value to $410 billion from a measly $14
billion, making GE the most valuable and largest company in the world.
One of Jacks’ rules for
success was to eliminate non-performing managers, the bottom 10%, and he
expected his managers’ to do the same with their staff. He earned a
reputation for encouraging his managers to out-perform their projections,
and he always made certain that he compensated his top performers for their
achievement. Jack Welch was an exceptional leader who recognized that to be
successful required not only effort but truly exceptional people.
When we are responsible for a
team we will often have some under-achievers, “the bottom 10%”, that we
are responsible for. Every department in every organization has a few with
the exception of government who attract under achievers like honey attracts
bears. These are generally nice people but they are usually not as concerned
with the goals and objectives of the department or organization as much as
they are concerned with having a “home” to go to each day and at the end
of a period collect a check whether they worked for it or not. They are the
primary reason that often prevent us from succeeding in meeting our goals
and growing within the organization. We owe it not only to the company and
ourselves but also to our subordinates and their peers to identify and
eliminate them from our garden.
Too often we are reluctant to
terminate these under achievers or the “bottom ten percent” as Welch
described them. Reasons vary from being too nice to not having sufficient
documentation to support termination. The following, then, is a guide using
common sense and forethought to allow us to terminate those who are
non-contributors and under achievers without fear of employment litigation
THE EMPLOYER’S WRITTEN POLICIES & PROCEDURES
Many companies create employee manuals and often like
other company manuals file them away in a cabinet or desk drawer; where no
one gives them another thought, until a former employee files a workplace
claim or law suit and requests a copy in a discovery process. These manuals
frequently address such matters as progressive discipline. Something rarely
practiced by front line managers and supervisors.
A primary benefit of a written manual is that, when properly drafted,
it guides management through the process of both disciplining and
terminating employees by outlining procedures for addressing misconduct in a
fair, neutral manner. One of the easiest employee claims to make is one of
discrimination against an employee in a protected class; termination
decisions made on an ad hoc basis increase a former employee’s ability to
claim unfair treatment when compared to other classes of employees. In most
cases, employees are fully aware of their employer’s policies.
If a manager or supervisor
doesn’t understand company policy, they are less likely to follow the
specific procedures set out in the manual, and may increase the risk of
litigation or involuntary compliance. The simple solution is to develop an
appropriate employee manual and require managers and supervisors to review
and understand its provisions and follow them in connection with all
disciplinary situations and termination decisions.
THE EMPLOYEE’S MISCONDUCT IN A PERSONNEL FILE
When a workplace complaint is filed or a suit goes to
trial, the outcome often hinges on the credibility of witnesses. Proper
documentation can be critical to an employer’s credibility regarding
allegations of a pattern of misconduct, or even a single instance of serious
misconduct, on the employee’s part. Whenever disciplinary action or a
warning is warranted, managers should ask the employee to sign a document
acknowledging the occurrence and the employee’s action. The document
should contain a section for the employee to state reason for disagreement
and should not require the employee to admit fault, similar to a traffic
The manager along with another company witness, not the employee’s
peer, present at the time of counseling or termination should also sign the
document. If the employee refuses to sign the acknowledgement, the manager
should make a notation on the document that the employee refused to sign the
In the event of a hearing or
litigation, a company’s documented records will go a long way toward
convincing a hearing officer, judge or jury of the employee’s prior course
of conduct and the legitimacy of the termination.
BEING THE NICE GUY, BE TRUTHFUL WHEN DISCIPLINING OR TERMINATING
When it comes time to terminate an employee, the
termination meeting often includes supervisors with whom the employee
interacted on a friendly basis during the term of employment. Such
supervisors might be inclined not to hold the employee accountable for the
misconduct that prompted the termination, or they simply might not want to
cause the employee further embarrassment, be responsible for their ability
to secure new employment or get involved in an emotional encounter.
It is imperative not to down play the reason for termination . It is
not uncommon for a terminated employee to make allegations of misconduct on
the employer’s part. For example, if the employee files a charge of
discrimination, the legitimate reason for termination will be critical to
the case. The specific reasons for termination may be apparent from company
records, but if the employer failed to address these legitimate reasons
during the termination meeting, or worse, makes statements that are
inconsistent with the legitimate reasons for terminating the employee, it
can appear to a hearing officer, judge or jury that the employer is
inventing after-the-fact reasons to justify the termination. A changing
story can appear to be evidence of pretext or a falsified reason for
termination that can seriously jeopardize the employer’s defense of an
employee wrongful termination complaint or lawsuit.
NON-COMPETE AND CONFIDENTIALITY AGREEMENTS
Companies often spend thousands of dollars developing
non-compete and non-disclosure agreements, primarily for their deterrent
effect. Such a policy can lose this effect quickly if the employer does not
remind an employee of post-employment obligations at the time of
Where trade secrets, confidential information and customer goodwill
are involved, it is far easier to keep them protected than try to correct
abuses using legal remedies.
Presenting the employee, at the time of termination, with a reminder
of the employee’s obligation along with a copy of the post-employment
restrictions accomplishes several things.
First, it lets the employee know the employer is serious about the
agreements and intends to enforce them.
Second, it often prompts the employee to seek advice of counsel or to
present the restrictions to prospective employers prior to engaging in
prohibited conduct, instead of proceeding to compete without understanding
the potentially serious consequences.
Third, providing a reminder will make it easier to establish that the
employee’s post-termination misconduct was malicious and intentional,
rather than a result of forgetfulness or a misunderstanding of the
When you populate your garden with strong, healthy
plants and provide the right fertilizer then you will be a successful
I wish you well.
The information provided above is for
educational purposes only and not provided as legal advice. Legal advice
should be obtained from a licensed attorney in good standing with the Bar
Association and preferably Board Certified in either Creditor Rights or