Employee Discipline Process | Improving Employee Performance

Employee Discipline Process | Improving Employee Performance

Discipline is a process that is designed to improve performance or change behavior. The first definition of "discipline" in most dictionaries is to teach or train. The word "disciple" certainly is thought of as someone who studies and learns from a "master". Think back to your upbringing or ask a child to define discipline and you'll likely hear "a time out," the denial or removal of certain privileges or freedoms, "spanking," etc. In fact, the definition of the word "discipline" has all of these meanings, but socially and particularly in an employment setting, employees and bosses most often think about discipline as a punishment.

Discipline is a tool for both improving performance and changing behavior.

When a boss tries to improve performance, it can take the form of training (i.e., outside seminars, educational courses, technical courses, etc.), giving an employee more responsibility in order to expand his or her capabilities. Improving performance can also take the form of defining and achieving the results that the business requires, and the employee's role in making sure that his/her efforts contribute to or achieve the desired result (i.e., making a specified number of sales calls and achieving a new customer sales-order rate expressed as a percentage of those same customer calls). Likewise, in the training/teaching mode of discipline, changing behavior can be expressed as "how" a specific result is achieved. Usually this takes the form of how one employee completes a task that is needed by others in the work-flow process (i.e., her/his sales reports are complete and contain the information necessary for the "fulfillment" business-function people to ship and invoice a customer). Another example is how an employee interacts with others in the business, for instance his/her willingness to help when a fellow employee is inundated with work to the point that business performance is affected and more "temporary" resources are needed to help meet customer requirements or needs (i.e., more orders to process today than it is possible for the "normal" process to handle).

Discipline can also be punishment where, after being warned that either performance had to improve significantly (consistently achieving minimally acceptable results) or a behavior had to be changed immediately (too many tardies, last minute call-ins for absences, getting too many traffic tickets while operating company vehicles, etc.), a negative consequence is applied. When discipline is punishment, it is usually after the more positive teach/training attempts at discipline have failed to achieve the desired result/behavior. In the relationship of boss to employee, "punishment" discipline usually takes the form of a conditional consequence: "If you do it again, then this will happen" (reprimand, pay reduction, suspension, demotion, termination). Of course, depending on your Human Resource Policies and company values, there are some behaviors where there is no disciplinary process because such behaviors will result in immediate termination (theft, falsification of information, doing bodily injury to a fellow employee, being under the influence of drugs/alcohol on the job or when operating company vehicles, sexual harassment, etc. {see Chapter 2}).

In most discipline situations, "consequences" may be applied to achieve the desired performance or behavior. Consequences can be either "positive" or "negative." Positive consequences can take many forms--too many to list--and can be as simple as a "thank you" to as complex and material as a promotion, pay increase, and/or an achievement bonus. Negative consequences usually take one of these forms in the workplace: reprimand, job re-assignment, pay reduction, suspension, demotion, or termination.

Usually, positive consequences are more effective in achieving the desired improvement to performance or behavior. Negative consequences should be considered as a last resort--the final attempt to get someone's attention and let them know that things must change, or else.

Any "punishment" disciplinary action that you initiate (especially a termination) is subject to review by a third party, so it is wise to follow the disciplinary process carefully, as it provides the basis for a defense against any claim by an employee that their treatment was unfair, illegal or discriminatory. In addition, how you treat the employee with whom you have commenced a disciplinary process will be carefully watched by other employees as they will form their own conclusions about how fair you were as the boss in your treatment of their fellow employee.

So why do you have to apply discipline so carefully? Your employees and the outside world will be watching to make sure you are "fair, consistent, reasonable and legal" and that the reward or punishment is not a surprise.

Who are third parties likely to become involved in a claim of "unfair" discipline, including discharge? Even though most states are "employment-at-will" states, anyone who is discharged may make a claim of "wrongful termination" which may be filed in the appropriate state court. Essentially, wrongful termination actions claim that what the employee did (or didn't do) was not so egregious as to warrant the ultimate employment punishment-discharge. Or, the discharged employee claims that he/she was not treated equally in that another of your employees committed the same "offense" and they were not discharged (unequal treatment). Or, the discharged employee asserts that you, the owner, told her/him something that implied he/she would be employed for a long time (e.g., "the customers love you so much I don't ever want to you to leave--thanks for the great job") claiming this verbal "contract" essentially negates the employment-at-will laws, (don't ever use language that implies anything about how long you want someone to work for you). Because plaintiff attorneys know that small business owners usually do not have the time or resources to defend against such a legal action, a lot of wrongful termination suits are filed solely to force an out-of-court settlement that provides compensation to both the discharged employee and his/her legal counsel; plaintiff attorneys believe most small business owners want to avoid the cost and hassle of a court hearing.

If you are forced to defend yourself and your company against a wrongful termination legal action, it is more likely than not that your defense will cost you five figures (over $10,000) or more, and a lot of time and aggravation.

Further, the Federal Equal Employment Opportunity Commission (EEOC) has jurisdiction (even over small business owners) in employment matters where discriminatory treatment is claimed (based on race, sex, religion, national origin, age, etc.). Any employee (or former employee) can file a written complaint of discrimination with the EEOC, and the EEOC must either investigate it and make a finding or issue the employee a right to sue letter so that the person who made the claim can engage an attorney to file a legal claim in federal court. If the claimant can find a lawyer to take the case on a contingency basis, then you, as the small business owner will have to mount your own legal defense and answer the pleadings filed in federal court, including a very comprehensive discovery "laundry list" of information, files, and people they want to interview.

The point to be made is apparent: to position your company and yourself in the best possible way, it is highly advisable that you meticulously follow a disciplinary process that either convinces your employee that he/she has been treated fairly (in which case the employee simply moves on to "greener pastures"), or provides you with a solid defense for the action you have taken (in which case a contingency lawyer might simply decide not to vigorously pursue the matter).

Let's set forth lay out the Discipline/Discharge process and then end this Chapter with a discussion on how to handle terminations. There are some things in life no one likes to do or wants to do and it is human nature when you don't like or want to do something that you procrastinate or don't do it. This statement is true for almost all bosses and especially small business owners, who want to run their businesses, make their customers happy and make a profit. Doing performance or behavior counseling can be stressful and not fun, so a lot of bosses say to themselves, "What the heck, so-and-so will get with the program sooner or later," and walk away from their responsibility to improve performance or enforce acceptable standards of behavior.

Telling an employee that he/she has to change/improve is something that we just hate to think about doing--"I'd rather have a root canal." But, "Pay me now or pay me later" sure applies here, so get it over with and do a good job.

Step 1 - Clearly and Specifically Communicate What You Expect.

While "common sense," or your employees' business cycle performance plans (see Chapter 6), or your human resource policies (see Chapter 2) define many of your expectations for either performance achievements, undesirable behaviors, appropriate work behaviors, etc., in either a positive or negative reinforcement mode, you will want to be very specific and repetitive in defining for an employee what needs to be improved or changed. For example, being "pleasant, courteous and helpful to customers in all circumstances" could be a desired work behavior. But no one knows this is your expectation until you communicate it. Don't assume people know exactly what you want-assume that they don't and then carefully and completely describe for your employees what you want and expect. This can be done as a group process (i.e., your Chapter 2 Human Resource policies describe some of the things that you don't want and/or your business cycle performance and business plans express what you do want the business to achieve and the role that each employee has in the work-flow process) or it may have to be done individually.

Step 2 - Informal Individual Counseling ("Teaching/Coaching")

When an employee is NOT achieving or doing what you want, it is time to have a "coach's" discussion with him/her. This is best done in private. Start the individual counseling session with a broad statement about your concern (i.e., "I've noticed that there seems to be a problem with some of the sales reports you've submitted, so I thought it would be good for us to talk about it."). Continue by asking the employee to tell you, in his/her opinion, what is going on by asking, "Do you think there is a problem with the reports?" and then listen attentively. If the employee acknowledges there is a problem, ask, "Why?" If the employee cannot provide an answer to the first "why" question, then you need to go back to Step 1 for this person and explain the specifics in terms of what you want and expect. Once you have done this, ask if the employee thinks your expectations are reasonable and achievable. If the employee answers "no," then you need to probe further by asking "why" a second time. Again, at this point in the counseling session, use your best listening skills to hear the words and determine what is behind the employee's "it is not reasonable/achievable" response to your stated expectation. Following his/her explanation, you will have to decide if there is any merit to his/her concern or not. If there is merit, you will have to appropriately modify your expectations. For example, your expectation is that all sales orders are submitted at the end of the workday they are received, and the employee has pointed out a resource issue ("It takes me all day to make the sales calls and whenever I get a minute to write-up the sales order, I get a customer service call where a customer has a problem that needs my immediate attention, so I deal with it. I've been taking work home and doing the sales orders online after dinner and I hardly get to spend any time with my family. I just don't seem to have the time to do everything you want me to do."). The solution to the performance issue may not be within the purview of employee-you may have to add resources or change the work-flow process. If you agree that there are mitigating circumstances, then buy some time by saying you want to think about this new information and you will get back to him/her for a further discussion. Give the employee a reasonable timeframe for this follow-up discussion. Do your homework, and then have this meeting and let him/her know what you are going to change so that he/she can be successful.

If the employee answers "yes" to the question about your expectations being reasonable and achievable, then ask the employee to tell you what he/she must do differently to meet your expectations. After hearing the self-assessment about the employee must do differently, you will either agree with the assessment or achieve agreement by modifying it (tacitly disagreeing with something the employee has proffered as a solution or by adding other things that you want the employee to do to be successful). Once this dialogue has reached a conclusion, clearly reiterate your expectations in terms of the employee, his/her role, the work to be accomplished or the behavior that needs to change and let that employee know what you are going to do (if anything) to help his/her successfully meet your expectations.

After this informal counseling session, make it a priority to circle back with the employee to make sure he/she understands what you expect, that he/she is doing what you want, and to publicly praise him/her (positive reinforcement) for the progress he/she is making or for a specific achievement. In short, "find the employee doing something right" and publicly tell he/she so.

Step 3 - Formal "Improvement" Counseling Session

If you have given Step 2 a reasonable chance to succeed but the improvement to the business results or the behavior still falls short of your expectations, hold another counseling session. Repeat the process in Step 2 and conclude the formal counseling session by telling your employee that you will record this discussion through a written memo to him/her, you will schedule a follow-up discussion on a set date, and then verbally spell out what the consequences will be, either positive or negative, if the expected improvement is not achieved (i.e., "I will expect you to take a course, provide you with online training, meet with you after hours to tutor you on how to do better, or have to demote you and find someone else to do this job," etc.).

Document this "Formal Improvement Counseling Session" Step (use the sample documentation format shown at the end of this Chapter). Give a copy to the employee and have him/her sign it. Keep the original in your permanent files.

When correcting specific behaviors, the next time the employee behaves inappropriately, act immediately. When correcting behavior, always use specific data ("You were late again by 15 minutes this morning") and immediately follow through with the consequence: "Your pay will be reduced by 5% for the next three months. It will be restored if you are not tardy during that time. If you are tardy again, the pay reduction will be permanent." Also let them know what will happen next if they repeat the inappropriate behavior (i.e., if you are tardy a second time during these three months, you will be____________).

ALWAYS CORRECT AND COUNSEL IN PRIVATE, NEVER IN PUBLIC. If you find someone doing something right (having counseled them previously or not) tell them so immediately. ALWAYS PRAISE IN PUBLIC.

STEP 4 - Be Consistent

When using discipline as a punishment or a negative consequence, be consistent. If you punish someone for being tardy and several weeks go by and that person is tardy again, you must punish the repeat behavior. Don't procrastinate. Call people on inappropriate behavior as soon as it happens. If you don't, the signal you're sending is that you weren't really serious about improving the behavior. Also, in being consistent, you must treat everyone the same. For example, if you have another employee who has been tardy as many times as someone else and you have not applied a similar negative consequence (i.e., a temporary pay reduction of 5%), you are putting yourself at risk for a legal challenge.

(Author's Note: I cannot count the times I've been told that a supervisor treated one employee differently than another because . . . {you complete this sentence}. The "mitigating reason" given for differential treatment usually is not defensible in the eyes of an outside reviewer of the "facts".)

Don't Correct or Counsel When You Are Angry

When you are angry you may say or do something you will later regret. Never correct or punish when you are angry. Talk through the situation with someone (cool-down period), and ask them what they would do. Don't let your emotions control the information you share - be objective when giving the facts. Make sure you are in control when you correct inappropriate behavior.

Step 5 - Termination

The punishment must fit the crime. Discipline must be consistent. Some behavior may call for immediate termination - fighting or striking another employee. Some behavior is an annoyance which needs correcting - tardiness. Some behavior needs improving - better phone manners with customers - and may simply require training and letting your people know what you expect.

Probationary and temporary employees are different. You may not want to take the chance of being unsuccessful in improving the behavior or performance of a probationary or temporary employee. If the person is still on probation, termination is usually appropriate rather than trying to coach improvement.

A critical step in terminations is clearly communicating what you expect in terms of specific behavior or performance AND making sure you have identified and communicated the consequences if the behavior is not corrected or the performance does not improve. Also, make sure that the person to be terminated has received this information in writing.

Terminating someone is a difficult decision that has the potential to affect many people. You need to be certain: (1) the employee was given an opportunity to tell he/she side of what happened (or didn't happen); (2) the person understood what was expected; (3) he/she was given adequate opportunity and time to improve but was not successful; (4) the employee knew the consequences if the correction was not made, and received written notice of what would happen if correction/improvement was not achieved; (5) he/she was given more than one opportunity to correct/improve; and (6) the punishment the employee received fit the uncorrected behavior or unsatisfactory performance.

Negotiating a Termination Settlement

If you have done a good job throughout the disciplinary process, when a termination "judgment day" arrives, it should be no surprise to the affected employee. In fact, in a robust labor market, an employee may start a job search (and find a new opportunity) before you have to actually terminate him/her. For all concerned, this is an ideal outcome of the disciplinary process and one of the main reasons viewing terminations as a process with multiple steps (in most cases) is a good business perspective and practice. In a weak labor market, you may not be as fortunate in that the "to be terminated" employee won't be able to secure a new position before the termination action.

Depending on the individual circumstances (i.e., there is no reason to immediately terminate someone--the final decision/action can wait for a reasonable period of time), another step in your process could be to arrive at an amicable separation. To determine if this step is something that will work for both you and the employee, have a private conversation that goes something like this:

"We've both tried to make this work, but we haven't been successful, so I'm at the point of making a final decision about terminating you. Before I do that, I want to know if we can reach an agreement on how to make this transition more manageable/easier for you."

Once the clear message is delivered ("You are going to be terminated"), invoke the "pregnant pause"--a long pause where you maintain eye contact with the employee until he/she begins to talk. Here are some of the things you are likely to hear:

  • Is there anything I can do to change your mind?
  • It's not fair!
  • Won't you please give me another chance?

Do not waver. You have to remain firm in your resolve. Tell them:

"I'm sorry, but I have made the decision to terminate you. That's final. However, I do want to take the opportunity to see if there is anything that I can do to help make this transition easier for both of us. What would make this transition easier for you?"

What you need to do is get the employee to talk and put something tangible on the table. Here are some things you hope to get the "to be" terminated employee to say:

  • I think a month's severance pay would be fair.
  • I really need medical coverage for a couple of months because I have a medical issue that may take that long to resolve and I can't afford to pay for the coverage myself.
  • I started a job search sometime back and I've got a final interview next week. I'd like to be able to say I'm still employed, so can you keep me on for a couple more weeks?
  • If you terminate me, what will you tell people if they call for references?

There are usually some things people want and if you agree to give them something that they suggest (negotiate), then their feelings about the action are a lot more reasonable and, if fact, you have initiated a step towards reasonableness in handling a very difficult situation. If you can get the employee to suggest something, then you are about 80% of the way to achieving a mutually acceptable and non-acrimonious parting of the ways. Separation settlements are cheap insurance against potential litigation.

Tell the employee that you want some time to think over what they have suggested and say,

"If we can agree on something, I will need to put that agreement in writing, and as a part of that written agreement, you will have to agree not to contest your termination in any way. Will that work for you?"

(Note: A Their verbal answer to this question is not a contract. If you get this far, you will need to consult with a local labor attorney to craft a written separation agreement. Once you have done this in the state in which you operate, the same written agreement can be used as a template for any subsequent terminations in which you have been successful in negotiating a separation agreement.)

FYI, any employee signing a separation agreement with a "release clause" that waives the employee's right to file a lawsuit or complaint with an administrative agency must be given a period of time following the signing of the agreement to reconsider and potentially withdraw the agreement. A sample separation agreement is at the end of this Chapter for your information only. IT SHOULD NOT BE USED UNTIL YOU CONSULT WITH LOCAL COUNSEL.

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Finally, What Do You Tell Your Remaining Employees?

A terse statement like: "'So-and-So' has decided to leave us and his/her last day will be ________. I wish __________ all the best." It is deadly to tell your folks you fired the no good "So and So" because . . . Don't beat your chest. You probably hired the person in the first place so this was just as much your fault as theirs.

 

Sample Only

Counseling Documentation

DATE:

TO:

FROM:

SUBJECT: Required Improvement

As we discussed on ___________________, I expect you to make the following improvement in your behavior and/or work performance:

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

We will review your improvement progress on (date)

If you have another incident of the above behavior or fail to make the required improvement by our next improvement review session, the following consequence will occur:

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

Signed: __________________________

I acknowledge I have received a copy of this document and understand it.

Employee Signature: _____________________________

Date: ______________________________



(Sample Only - Not to be used without consultation with an attorney)

SETTLEMENT AND RELEASE AGREEMENT

This Settlement and Release Agreement is dated as of this _______ day of ________, _______ and is between ____________________ (the "COMPANY") and ________________ (the "EMPLOYEE").

WHEREAS, the EMPLOYEE has had an employment relationship with the COMPANY; and

WHEREAS, disputes among the parties have arisen in connection with EMPLOYEE's employment; and

WHEREAS, the parties desire to compromise and settle any and all disputes that have arisen upon the terms hereinafter set forth.

NOW THEREFORE, in consideration of the mutual promises of the parties and other valuable and sufficient consideration, and intending hereby to compromise and settle any and all such disputes, the parties hereto agree as follows:

1. EMPLOYEE's employment with the COMPANY will terminate as of (date), and he will perform no services for the COMPANY thereafter.

2. (A) In settlement of any and all possible claims that arise or might arise, the COMPANY will pay EMPLOYEE such compensation and provide such benefits for EMPLOYEE as follows:

  • For purposes of the COMPANY's benefit plans, EMPLOYEE will no longer be an "employee" as of (date) .
  • On or before (date), EMPLOYEE will be paid for any accrued and not used vacation time and one floating holiday.

(B) As consideration for the release of claims by EMPLOYEE in paragraph 5, hereof, the COMPANY will pay EMPLOYEE the following that are over and above what is otherwise required:

  • Severance pay of $x,xxx.xx, to be paid beginning _______ and ending _______.
  • During the period EMPLOYEE is receiving severance payments he shall be provided with group health benefits as if he were still an "employee."

3. Except as described in paragraph 2 of this Settlement and Release Agreement, EMPLOYEE expressly admits, acknowledges and agrees that no other payments shall be made by the COMPANY to him and that he has no entitlement to, or any right to make any claim for, any additional payments by the COMPANY of any kind or nature or under any circumstances whatsoever.

4. This Settlement and Release Agreement is revocable by EMPLOYEE for seven (7) days after it is signed by him. This Settlement and Release Agreement shall not be effective or enforceable until the period for revocation has expire.

5. As a material inducement to the COMPANY to enter into this Settlement and Release Agreement, EMPLOYEE hereby releases, for himself and for his heirs, executors, administrators, successors and assigns, the COMPANY and its current and former parents, affiliates, subsidiaries, partners, stockholders, and their current and former officers, directors, employees, agents, representatives, successors and assigns, from any and all liabilities whatsoever, including, but not limited to, any claim for any compensation or benefits specifically arising directly or indirectly out of his employment relationship with the COMPANY, and from any rights, claims in law or equity for wrongful discharge, discriminatory treatment under any local, state or federal law, regulation or order (including without limitation the Age Discrimination in Employment Act of 1967 ("ADEA") the Civil Rights Act of 1964, the Civil Rights Act of 1866, all State of __________ Human Rights and Opportunities Laws, the Employee Income Security Act of 1974, the Americans With Disabilities Act of 1992, and the National Labor Relations Act), personal injury, contract breach, defamation, mental anguish, injury to health and/or personal reputation and any other claim arising out of his employment with the COMPANY or the termination of his employment or under any other facts or circumstances whatsoever. The release of claims in this Settlement and Release Agreement shall extend to claims of any nature whatsoever, including claims that are known or unknown, suspected or unsuspected.

6. EMPLOYEE agrees and covenants not to initiate a lawsuit or commence any sort of action or proceedings against the COMPANY or its current and former parents, affiliates, subsidiaries, partners, stockholders, or their current and former officers, directors, employees, agents, representatives, successors and assigns at any time in the future based on any right or claim that arose or could have arisen on or before the effective date of this Settlement Agreement and Release.

7. EMPLOYEE recognizes that during the course of, and for the purpose of his employment by the COMPANY, he was informed of or helped originate proprietary information, some of which was confidential; and that the COMPANY considers at least the following types of information to be confidential and the property of the COMPANY: proposed inventions, engineering designs, new product plans and market studies, prices and pricing strategies, profit margins and financial performance reports and financial performance targets, names and addresses of suppliers, customers and consultants, and customer problems, preferences, needs and complaints. EMPLOYEE also recognizes that there may be other types of confidential information, such as that which is proprietary to others and provided to the COMPANY under a secrecy agreement. The EMPLOYEE agrees to immediately return any such confidential information in his possession to the COMPANY; agrees to hold and protect in strict confidence and to not use or disclose for any purpose or to any person who is not then an employee of the COMPANY, any of the COMPANY's confidential or proprietary information; and further agrees not to cause or assist any other person to use, publish or disclose any of said information, except, however, such of the foregoing information as shall have become generally available to the public without any action, cause or fault of the EMPLOYEE.

8. EMPLOYEE agrees that during the period in which severance payments are being received EMPLOYEE will not: (a) offer, perform, or attempt to perform services for any other person, firm or corporation if any of those services would use or disclose or cause disclosure of any of the confidential or proprietary information described in paragraph 7 above, and thereby would assist or benefit competition against any line of the COMPANY's business; (b) cause, assist or encourage any solicitation of a customer of the COMPANY for a sale in competition with the COMPANY, and (c) cause, assist or encourage any recruitment of any employee of the COMPANY to become employed with another company. In the event that during the severance period , EMPLOYEE engages in any of the conduct proscribed by this paragraph, EMPLOYEE's severance payments will cease, and Employer will take such legal action as authorized by law or equity.

9. This Settlement and Release Agreement shall be governed by and construed under the laws of the State of ____________.

10. The provisions of this Settlement and Release Agreement are severable, and if any part of it is found to be unenforceable, the other paragraphs shall remain fully valid and enforceable. This Settlement and Release Agreement shall survive the termination of any arrangements contained herein.

11. EMPLOYEE acknowledges that he is entering into this Settlement and Release Agreement knowingly and voluntarily, that he fully understands all of its provisions, and that he has been advised of his right to consult with an attorney prior to signing this Settlement and Release Agreement. This Settlement and Release Agreement constitutes the entire understanding of the parties, and cannot be modified except by a writing signed by both parties.

12. EMPLOYEE agrees that, except as permitted or required by applicable Federal, State, or Local law, he will maintain the confidentiality of this Settlement and Release Agreement and make no voluntary statement or take any other action that might reasonably be expected to result in disclosure of, or any publicity concerning, the terms hereof or the consideration paid to him by the COMPANY.

13. EMPLOYEE and the COMPANY also agree that in the event of a breach of this Settlement and Release Agreement by either party, the prevailing party shall be entitled to reasonable attorney fees and costs for enforcement of this Settlement and Release Agreement.

14. This Settlement and Release Agreement shall not in any way be construed as an admission by the COMPANY that it has acted wrongfully with respect to EMPLOYEE in connection with his employment with or termination of employment from the COMPANY.

IN WITNESS WHEREOF, the undersigned have executed this Settlement and Release Agreement as of the date first above written.

_______________________________________ _________________________
EMPLOYEE/Date

COMPANY

By: ____________________________________ _________________________
Name/Date

____________________________________ Title

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