How Can I Legally Handle Terminating an Employee for Poor Performance? Seeking Advice from Experienced HRs

Dear Seniors,

Kindly suggest a formal, legal way of terminating an employee due to his non-performance. He had been given performance warning letters months back and warned to perform well. However, the situation has not changed. Written warnings and verbal warnings were given, but he is not improving himself. He is currently in the finishing stage of a project that he is handling alone. The decision is to hold the salary until he completes the project. Additionally, the management wants to present him with two options:

1. In the future, he will not work with the current salary; the salary would be lower.
2. If he does not accept the first option, he will have to quit the organization.

I am going to handle this situation now. How can I legally manage this case? Your experienced and valuable suggestions would be greatly appreciated.

Regards,
Soja Oliver
HR ADMIN

Dear Seniors,

Again, what would be the legal method of terminating an employee considering the above case? Please suggest your thoughts. I am preparing a letter and now I am looking for strong and valuable points to incorporate in the letter. Kindly provide your inputs.

Regards,
Soja

Dear Soja,

First, never disclose your company name on blogs. You are bound by your confidentiality agreement with your company not to disclose official issues, and this would go against you and your job. Please remove it immediately.

Now to your issues:

1. Holding the salary of an employee is inhuman and against the law. Your company will have a tough time legally if the employee complains to the Labor office.

2. Why would you give him the option to resign now if you want him to complete the project?

3. If you want him to resign after the completion of the project, then I guess your earlier warning notice should be enough.

4. Also, I am not clear when the employee is completing the project why he is not a good performer. What makes your management think that? Please be very clear and fair. Do not go by what the management is saying. Think in an HR perspective and understand the situation and handle it.

5. Ensure that the employee is given a fair chance to improve before either terminating him from service due to non-performance or otherwise.

Hope this is helpful.

Ukmitra

Are you sure it is his non-performance that is the reason for termination, or is there something more to it? Have you ever thought about why the management wants to offer him the option of working for a lesser salary? It has to be either termination or a lesser salary, not options of both. Remember that HR is supposed to hold the employees and the organization together and be fair to both at the same time (a tough job, really!). If HR has to merely act as a messenger, then I guess it would be inhumane resource.

You have already given him the warning notice, which makes termination easier. However, as you have mentioned that the company can't terminate him until he completes the project, it's better to wait until the notice period days align with the project completion duration. This could be the moment when you can issue the final termination letter, asking him to serve the notice period.

Regards,
Swati Gupta

Yes, do not withhold salary. Give necessary training where possible and document the procedure. Check for improvement; if there is no improvement, document the situation and take the necessary steps forward. Most importantly, ensure that all processes are well-documented.

Hi Soja,

As you have issued warning letters, kindly conduct a domestic inquiry to establish his non-performance. Subsequently, based on the findings of the inquiry, you may proceed with terminating his services.

Thank you.

Hi, as you have issued warning letters, kindly conduct a domestic enquiry to establish his non-performance and proceed with the termination of his services. This will strengthen your legal position.

Very nicely explained, Ukmitra.

[QUOTE=ukmitra;997885]Dear Soja,

First, never disclose your company name on blogs. You are bound by your confidentiality agreement with your company not to disclose official issues, and this would go against you and your job. Please remove it immediately.

Now to your issues,

1. Holding the salary of an employee is inhuman and against the law. Your company will have a tough time legally if the employee complains to the Labor office.

2. Why would you give him the option to resign now if you want him to complete the project?

3. If you want him to resign after the completion of the project, then I guess your earlier warning notice should be enough.

4. Also, I am not clear; when the employee is completing the project, why is he not a good performer? What makes your management think that? Please be very clear and fair. Do not go by what the management is saying. Think in an HR perspective and understand the situation and handle it.

5. Ensure that the employee is given a fair chance to improve before either terminating him from service due to non-performance or otherwise.

Hope this is helpful.

Ukmitra

Hi,

If his performance is so poor, you can assign another capable person for the same work/project. When he feels that he is not recognized, he will leave the organization eventually.

Holding salary is inhuman. Furthermore, he can challenge for his salary, not for his recognition.

Hi,

If you have issued verbal and written warnings, you can terminate him anytime by giving a notice of 15 days or 1 month. Be sure that you have all the important documents showing the employee's non-performance (Productivity Charts, error rate, etc.). Termination should be based on actual statistics, not verbal ones.

Salary can't be stopped even for a single day.

If he is a non-performer on a certain task, try putting him on some other task. Maybe he works well there.

Whatever decision you take, it should be the best for the employee as well as the organization.

Long time back, a Personnel Management fresh grad and a friend told me that his job normally means "Welfare to Farewell" travel. I have since then thought that farewell usually has to happen from the employee's side, not the other way around.

[QUOTE=ukmitra;997885]

Dear Soja,

Hi ukmitra,

I am impressed by your decision which was posted on the blog regarding the termination of an employee due to poor performance.

Here I have a question - What should an employee do when a senior manager holds the salary of an employee for any reason and claims it is part of the company's rules and regulations?

Should the employee move to the labor court or seek other convenient resources in this situation? Please provide me with full details.

Balraj

Hi Balraj,

I have responded to you privately, as these cannot be shared on the blog for reasons. All the best.

Ukmitra

[QUOTE=balrajhr;1000205]

Hi,

I don't know if you have tried putting him in other roles. Maybe he is a misfit for his current role. Nobody would purposely give poor performance.

Hi Soja,

For such employees, you need to keep them on action plans with agreed time scales. You need to do this three times if the under-performance still continues. After three action plans, you need to conduct a performance appraisal where you will provide evidence of their non-performance and evaluate them with the lowest rating. All these actions need to be documented.

You need to provide both options as mentioned in writing. If the employee agrees to the first option, that's fine. Otherwise, you can terminate them with a one-month notice period. Before termination, it's crucial to make the employee realize that they are underperforming.

I have dealt with many cases like this before. If necessary, I can come to your company and handle this situation. Please let me know if you require my assistance.

Hello,

To deal with a non-performing employee, first, set targets/KRAs as per the job profile with a specified time period for achievement. Then, conduct a performance evaluation using the appraisal method. Provide detailed feedback on why the rating is low, citing non-performance. Repeat this process three times, and after the third appraisal evaluation, issue a one-month notice for service termination. Obtain the employee's resignation and complete all necessary exit formalities, including providing an experience and relieving letter without specifying the reason for termination (non-performance) to assist in their future endeavors.

During the evaluation/appraisal, if you observe improved performance, retain the individual and issue a proper written notice to maintain the same level of performance in the future. This process aligns with the standard and expected practices of HRM for addressing such situations. It is crucial to document all steps of the process.

Regards,

Brijesh Deshmukh | Sr. Executive HR
Email: brijesh.deshmukh@pelfinfotech.com

Dear Soja,

You may refer to the company policy first. Check what the policy is on transfers. You may transfer the person to a remote town or to some other department. Ultimately, the person will resign on their own.

Kind regards,
Aslam Ashrafi

1) The company has no right to withhold the salary of any employee.

2) You cannot hold a domestic inquiry and dismiss an employee for poor performance.

3) If your company's standing orders/rules/contract of service has any such clause relating to termination for poor performance, then it could be exercised.

4) Else if any Voluntary Retirement Scheme (VRS) is available, try to induct him.

5) If he is really not worthy, settle the issue through an out-of-court settlement.

Dear All,

Please understand that "poor performance" is a very generic term. It is better not to resort to this. If the contract provides for a notice period, it is better to use that. Always remember, termination without casting aspersions on another is the best approach for management.

With Regards,