Performance improvement plans (PIPs) have been the standard of employee discipline for quite some time. When you have identified a performance issue with an employee, you don't just fire the employee, you make a formal plan for their improvement, meet with the employee often, and hope to see improvement. If you don't see any improvement, then you fire the employee.
The PIP isn't required by law. In nearly all states, employment is at-will. That means that you can fire an employee for any reason (as long as that reason isn't prohibited by law, such as race, pregnancy, or disability) and that an employee can quit without warning for any reason.
However, it might be worthwhile to invest some time into employees that may not be performing on par. It makes good financial and managerial sense to try to improve employees rather than fire them because employee turnover is costly. However, sometimes you should not try and develop an employee.
What You Can Do
In an at-will employment agreement, you are able to fire a troublesome employee when you deem necessary, within federal and state laws. If your employees are represented and voluntary members of a union, you must follow the union agreements made with the company for discipline. If your workers are independent contractors, discipline must follow the guidance in the contract.
Most companies conduct employee improvement plans with a series of warning letters and notices. Employees expect to be notified of deficiencies in this manner, and it will help you demonstrate your attempts to identify and correct performance issues if an employee files a lawsuit against you.
Businesses lose millions of dollars per year to employee theft—if you don't deal with it quickly it will escalate. If employees feel like they can steal from the company without consequences, some of them will.
If you have a fight in the workplace it may be difficult to sort out. If Jane walks up and punches John in the face without provocation, you should fire Jane on the spot. But when it's less clear who started the fight, you'll want to take the time to sort out the details rather than just firing both employees.
Jane may have punched John in the face, but was that because it was the 33rd time he'd made a lewd comment to her? If both are fighting, is one acting in self-defense? Make sure you know the story before you fire anyone. And be sure to gather statements from any witnesses if other employees saw the altercation.
While Jane shouldn't punch anyone, you don't want to fire Jane if she'd reported the sexual harassment and the company hadn't put a stop to it. A court could well see this firing as retaliation, and Jane would have every right to file a charge with the Equal Employment Opportunity Commission against you.
Suspend Employees While Investigating
Customers are not always right, employees may be relying on gossip, or an employee could be lying for various reasons. You need to investigate as thoroughly as possible before you take any action.
Depending on the situation, you might want to wait before firing the employee. You can suspend the employee(s) while you investigate the circumstances. You'll want both people out of the workplace while you sort out who was responsible and determine a reasonable solution to the issue.
Suspensions are useful tools when determining fault in an issue. Often, you don't see the employee stealing—someone else does. You may get a customer complaint that an employee was unspeakably rude or that they violated HIPAA requirements and shared a patient's diagnosis with a friend. You don't want to take these reports at face value.
Removing the accused employee from the workplace while you investigate is the correct action to take. It will lower the office tension while you work things out, and if you end up in court with the fired employee you took the right actions to determine what happened and to decide on an appropriate course of action.
If you conduct your investigation and determine the employee was guilty of the wrongdoing, then you have grounds to fire the employee. If you determine that the employee is innocent, then reinstate and pay the person for the suspension time. It's the right and fair thing to do.
Be Cautious About Firing Employees Too Quickly
Even seemingly black and white cases often require a bit of caution. Why? Because you want to be fair across the board. You fire John for stealing a printer. That makes sense. But when you find out that four other employees have taken expensive equipment and other managers were aware and nothing was done, you've just treated John unfairly.
Employers should not allow employees to steal, but many businesses allow employees to use company equipment at home, or they turn a blind eye to a little bit of theft. You want to make sure that the company policy is applied to everyone—entry-level or executive—the same.
If you want more flexibility with executives, then make that the official policy: Employees who are a certain grade or higher can take company equipment home, with the understanding that they will return it when they leave the company.
The key here is consistency and staying within policy guidelines. All managers need to handle matters with the same guidelines. An easy way to ensure this is to require HR approval on all terminations. With this requirement, a central group is available to tell you whether the behavior has been allowed or not in the past.
Firing for Insubordination Without Using a PIP
You may believe that when you have an employee who refuses to do what you've asked, you are able to fire that person on the spot. This is an area that needs more explanation.
They may not be trained properly, or the request may not be within the scope of their job. The task may put them into overtime, which you may have told them repeatedly not to go into. Maybe the employee has a phobia you didn't know about.
You need to consider all the possibilities before you fire an employee. A one-time case of insubordination is an excellent opportunity to find out more about the employee.
If during your conversation with them, it turns out they were simply being insubordinate, you could put them on a performance improvement plan so that the employee understands what they did wrong, and the steps they need to take to improve. You might be surprised how many people don't understand quite how the working world works.
The Bottom Line
Remember, while you can fire someone without going through a lengthy performance improvement plan process, it doesn't mean you should. PIPs are still a useful tool for employee discipline. You need to use them when appropriate in order to help an employee improve behavior and performance. Firing is the last resort, not a first option.
Please note that the information provided, while authoritative, is not guaranteed for accuracy and legality. The site is read by a world-wide audience and employment laws and regulations vary from state to state and country to country. Please seek legal assistance, or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct for your location. This information is for guidance, ideas, and assistance.