Catch or Release? (Part 2) How to Fire an Employee

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It may surprise you to learn that in 2020 and also in 2021, the most searched topic on Google, for small businesses in the state of Texas, was “How to fire an employee.” Sounds a little crazy, with the US unemployment rate peaking at 14.7 in April of 2020. Luckily the unemployment rate has dropped significantly, but the search results in Google still point toward small businesses, having trouble with employees.

We’ve had several blogs on how to find and hire great employees and on how to keep them. Let’s now talk about that uncomfortable subject:

 

How to fire an employee:

Texas is an “employment at will” state, which means employees can be terminated for any lawful reason. (Unless, of course, there is an employment agreement that has guaranteed employment for a specified period of time.) However, just because you, as a small business owner are entitled to hire and fire at will—it doesn’t mean you should. If you need to fire an employee, you need to make certain you have a lawful reason, and you need have documentation of that reason, to make certain you aren’t dragged into litigation.

 

Litigation is expensive, and ultimately winning your case can be both expensive and frustrating. In this blog, we’ll talk about the best way to handle employee terminations, while minimizing the risk to you and your business.

 

1st thing to remember:

Never fire an employee in the heat of the moment.

We get it, Les is late…again. In fact, he’s never, ever been on time and he likes to leave his shift early – asking other co-workers to clock out for him. You, the employer, after covering the first hour of Les’s shift (and missing your daughter’s recital) have had enough. Time for Les to go! But wait! Even when Les wanders in, an hour late…again…and says “Wassup Dude?” don’t lose your cool!

Instead, take a deep breath, formulate a plan, and follow the steps we’ve compiled. We’ve pulled the best information for you from the Harvard Business Review, several local employment attorneys and the Texas Workforce Commission.

 

Step 1:

Give a warning to the employee:

It’s time for Les to go. But first, you need to plan to let him go the correct and legal way. The first step in Les’s termination is to let him know he’s doing something wrong.

  • Put his/her bad behavior in writing: Sit down with Les and have the discussion about his tardiness, and how it is unacceptable.
  • Tell the employee about the consequences: “Les, if you are late again, or if you ask Betty to clock out for you again, you will be fired.”
  • Document everything: Keep a copy of Les’s written warning. Document the day and time of your conversation.

 

Step 2:

Give the employee time to improve:

Maybe Les didn’t understand that being late was unacceptable and he immediately stops the behavior.  It can sometimes happen. Allow some time for improvement. Put a time-limit on when he is expected to improve. It’s okay to say: “Les, you are only going to get one more warning, and then we’re going to have to let you go.”

 

Step 3:

Decide when to fire the employee:

The timing of the employee termination needs to be individualized to the small business. Determine when the best time would be for you and the employees who are still working. If Monday is the best time, do it early so you can encourage them to seek other employment. If Fridays will be the less disruptive time to the staff or your business, do it then.

 

Step 4:

What to say when firing an employee:

You’ve done your homework, given warnings and have given plenty of time for improvement and you still need to fire the employee.  What do you say?

  • Get right to the point: You need to let them know they are being fired FOR CAUSE. “Les, today is your last day. You are being dismissed for cause, and it is time for you to find work elsewhere.”
  • Tell them when they will be leaving: “You will gather the things from your locker and leave the building when we are finished here.”
  • Tell them what to expect: “Your final check will be mailed to you in 2 business days.” Or – here is your final check.

 

Step 5:

Ask for a legal release:

  • Let the employee know of any benefits or severance: Some employers find it beneficial to offer a severance package. For instance, you can offer them a week’s worth of wages, if they will agree to sign a full release of all claims.
    • Keep in mind if the employee is over 40 (a protected class) you must comply with the Older Workers Benefit Protection Act, which requires you, the employer, to give the employee at least 21 days to consider the claims release and to consult with an attorney (at their own expense). They may also sign the release, but you still need to give them 7 days to revoke the release after it’s signed.

 

Step 6:

Make sure they leave the building immediately:

You don’t need to kick the employee out, or hover over them while they clean out their desk, but you do need to let them know they are expected to leave immediately. If they don’t leave, you’ll need to escort them out. Remain respectful and don’t intimidate them with threats.

Turn off their IT access!

Don’t forget to turn off their access to your business computers, terminals and other areas where they might be able to log in.

 

Step 7:

Reassign the employee’s tasks immediately:

This should be part of your Step 1, when planning to terminate the employee. Have someone ready to step into that employee’s position or be ready to assign the employees tasks to someone else. You can also divide up the employee’s tasks, if necessary.

 

What do I do if the employee files a claim for unemployment benefits?

This often happens, and there really is not a lot you can do about it. As a small business owner, you pay unemployment taxes and even if you try to fight it claim, the likelihood that they will receive benefits anyway is high. You want to be careful not to say anything out of line, or you may open yourself to a lawsuit. Instead, experts suggest you comply with requests from the State Work Commission. This may include proof of written warnings and an explanation of why the employee was fired.

 

Can I fire someone without a warning?

You can fire an employee in cases of gross misconduct.

The official definition in Section 201.012 of the Texas Labor Code is as follows: “‘Misconduct’ means mismanagement of a position of employment by action or inaction, neglect that jeopardizes the life or property of another, intentional wrongdoing or malfeasance, intentional violation of a law, or violation of a policy or rule adopted to ensure the orderly work and the safety of employees”, but “does not include an act in response to an unconscionable act of an employer or superior.”

Some examples of gross misconduct:

  • Theft
  • Vandalism
  • Illegal use of drugs or alcohol at work
  • Fraud
  • Sexual harassment or assault
  • Fighting or violent threats while at work
  • Intentionally causing harm
  • Health or safety breaches

 

Make sure you don’t fire an employee for unlawful reasons. Some of those include age, religion, race, color, gender, sexual orientation, marital status or disabilities.

 

 

For additional information on how to fire an employee or on the best practices for termination in your small business, please contact us at the Small Business Development Center – SBDC – Serving Paris area:  Lamar, Hunt, Hopkins, Delta, and Red River counties.

Catch or Release? How to Keep Great Employees

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Aunt Lucy, queen of the knitted unicorns (and other massive stuffed animals) hired the very best salesperson: Shawn Sellars.  Shawn was perfect for the job! In his first two weeks, he upsold 80% of his customers, decreased shipping times and was generally, quite pleasant to work with. Everyone loved Shawn!  Things were going perfectly, until week 4, when Shawn quit!

 

Why do people quit their jobs?

You might wonder why Shawn quit after 4 short weeks, especially since he seemed to like the job, the customers, and Aunt Lucy. We asked Shawn: Was it money? Was it the hours? The answer Shawn gave, may surprise you – in fact; MIT Sloan Management Review discovered the main reason individuals like Shawn were quitting their jobs in record numbers:

Toxic work environment:

Apparently, Aunt Lucy’s favorite nephew wouldn’t let Shawn take his breaks, took credit for half of Shawn’s sales and continually berated Shawn in front of other employees and customers.

In fact, employees who feel like their work environment is toxic are 10.4 times more likely to quit a job, even if their pay is higher than what they would get working in the same industry.

 

How do I keep good employees?

You’ve finally found and hired that dream employee! Now how do you keep them? In this example, if Aunt Lucy wants to keep Shawn, she needs to:

  • Clean up the toxic work environment: It may take some investigation, but if you talk to enough people (customers included) you’ll find the areas causing employees to flee.
    • Be open to the idea that YOU may be causing the toxic work environment. Do you yell or criticize more than praise? Are you creating a happy and safe workplace? Are you allowing your nephew to terrorize the workers?
  • Create Job Security: As we mentioned in our last blog, employees are fearful of losing their jobs. Train your employees well and create an environment of job security.
  • Recognize Accomplishments: Another reason individuals are leaving their jobs is because they don’t feel appreciated. Recognize performance and create a reward system. It doesn’t need to cost a lot of money, just be certain to recognize a job well done (and recognize it often).
  • Stay Innovative: Businesses with high levels of innovation keep their employees longer. It may be time to consider that new Point of Sale system, automated shipping or new barcode system for inventory.

 

How to keep employees in a high turn-over industry?

If you own a small business that is part of the hospitality industry, or food services, you probably feel like you are bleeding employees. It is tough, but so are you!  You can make your small business thrive, and here are some ideas how to keep your employees, even if you are in a high turnover industry:

  • Own it: Embrace the fact that your business may be one of those that inherently has a high turnover rate. It doesn’t mean you give up, embrace the “crazy” and create a plan for it.
    • Paragus, a tech company with high turnover began to refer to departures as graduations and celebrated them with farewell parties. They redesigned their business model to significantly reduce the impact of turnover for their clients to ensure they could still provide the same amount of support. They did this by creating teams so that if one person left, the other team members could step in and even train the next new hire.
  • Get new employees off to a good start: Proper orientation can help alleviate some of the uncertainty new employees experience. Appropriate training will also help eliminate the frustrations that cause many new-hires to reconsider their job acceptance.
    • Don’t skimp on how to interact with customers. Customer service training is important, especially in this day and age when tempers seem to be short and complaints are frequent.
  • Reconsider shift schedules: Be fair when assigning shifts and take into consideration individual needs.
  • Give workers authority: Let your employees take the lead on the things they do well and back them up when they make a decision; especially in front of a customer.
  • Offer bonding opportunities: Employees love to work with friends and associates who make them feel like part of a team. Consider team building, out of office get-togethers and other opportunities to bond.

 

It doesn’t matter if you have 1 or 100 employees, implementing a few ideas or changes to make your company a great place to work, will attract new employees and you’ll keep the great workers you have.

 

For additional information regarding how you can keep the good employees that you’ve hired, or on how to attract quality workers in any business, please contact us at the Small Business Development Center – SBDC – Serving Paris area:  Lamar, Hunt, Hopkins, Delta, and Red River counties.

The Labor Shortage – How to Hire New People

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A very popular gourmet hamburger chain in Texas reported that pre-pandemic, they would receive well over 100 applicants, every time they posted a job opening. Now however, they tell us their applicants are in the single digits. Are you experiencing the same type of labor shortage, or lack of applicants?

It seems crazy; unemployment is high, but the number of people applying for jobs (at least in our area) is low.  More than a third of Americans without jobs are still long-term unemployed, and federal benefits for these workers, from the pandemic, ended in September 2021. It’s difficult for that to make sense.

 

Why aren’t people going back to work?

Some experts tell us the main reason people are not returning to work has to do primarily, with fear. The Corona virus variants have potential employees worried about their health. Another fear is getting laid off again, similar to when the country shut down. And finally, individuals are skittish about leaving  the job they currently have to pursue new opportunities; creating a scenario where less people are applying for new job positions.

Other reasons companies aren’t finding applicants stem from worker burn-out. CNN Business News reported that worker burnout is on the rise, hitting women and people of color the hardest. Of the working women CNN surveyed, 41% said they had been working significantly more hours than before the start of the pandemic. The employees in the service industry and those deemed “essential workers” have been making up for worker shortages, while trying to maintain the home-life responsibilities. The overall feeling of constant work, without any downtime, is causing worker burn-out.

We understand some of the reasons people aren’t returning to work, but how does a small business overcome those reasons and attract good employees?

 

How to hire during labor shortage:

The good news is individuals ARE returning to work and you, the small business owner, are more than ready to hire. Here are some ideas for attracting new talent:

  • Recognize the underlying fear(s) of potential employees. Talk about the issues and address them. Perhaps you could advertise a guaranteed amount of hours.
  • Partner with the local schools like Paris Junior College: Offer internships or training to students who are interested in a career in your field of business.
  • Double check job responsibilities: Is your current staff doing too much unproductive work? Automating some of your systems may help alleviate some of the overtime or long hours for your current employees. Perhaps a shift in responsibilities or change in job description would help. Maybe you think you need another salesperson, but what you really need is a better system for inventory.
  • Offer flexible schedules.
  • Offer benefits or employee perks.
  • Consider short-term contract employees, or employees from a temp-agency. You may find your perfect employee and ultimately hire them permanently.
  • Be open to different personalities: Business owners may get into a habit of hiring the same types of people. Be open to hiring the introvert, the single dad, the goth-girl, or someone on the spectrum…they may surprise you.

 

How do I attract employees in the service industry?

If you are in a service industry, you’ve been hit hard by the labor shortage. Part of that is due to the fact that many individuals left the service industry for good, in favor of more job stability. Here are some good ideas to overcome the shortage, and to attract potential employment candidates:

  • Get creative in your job posting and recruiting: Is your place of business a fun place to work? Make your job posting playful, reflecting your positive environment.
  • Offer something your competitors aren’t offering. Maybe offer a free meal before or after their shift. A sign-on bonus or a higher starting salary.
  • Incentivize your current staff: Offer a cash bonus for referring a friend.
  • Address those fears again, especially for the potential employee who lost their job during the pandemic. Maybe offer a bonus for staying for 6 months.
    • You might also advertise the ways you have adapted your small business, to make sure you retain your employees if there is another shutdown. (Perhaps you are now offering delivery or curb-side pick-up.)

More good news:

The Bureau of Labor Statistics is forecasting that total employment in the U.S. economy will grow during 2022, eclipsing the previous decade  (2012 – 2022) by 10.8%. That’s good news for small businesses looking to hire!

 

For additional information regarding hiring shortages or on how to attract quality labor in the service industry, or in any business, please contact us at the Small Business Development Center – SBDC – Serving Paris area:  Lamar, Hunt, Hopkins, Delta, and Red River counties.

How to Handle a Bad Review

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Betty was a brand-new server at the “Cake and Shake Shack.” She was bubbly, efficient and really quick on her rollerblades, especially when taking big trays of cakes and shakes to the cars who ordered them. One day, Betty ran a cake and shake out to Mr. Keyboard Warrior and his girlfriend. She smiled, flirted just a tiny bit with Mr. Warrior, and gave a wink to his girlfriend when she handed over her soy-kale-smoothie. When she rolled back inside, after pocketing the tiny tip she received, she went on to her next car delivery. Everything seemed fine. Mr. Warrior and the girlfriend drove away, eating cake and sipping shake.  Two days later, after an intense fight and subsequent break up with his girlfriend, Mr. Keyboard Warrior took to his computer to complain about Betty, her attitude, and the outrageous and inappropriate flirting she did, causing the untimely breakup between he and his girlfriend. He said the cake was dry, the shake had spinach, not kale…and he would NEVER return to the Cake and Shake Shack. One Star.

As ridiculous as that sounds, stranger things have occurred to prompt a one-star review of a small business.  In this blog, we’ll talk about how to handle a bad online review, and how to improve your overall star-ranking on Google and Yelp.

 

You got a bad review, now what?

 

How to respond to a bad review:

Maybe you discovered that Betty not only winked at Mr. Warrior’s girlfriend, maybe she slipped Mr. Warrior her phone number and said: “Call me, maybe?” On the other hand, maybe Mr. Warrior’s girlfriend is simply insecure and there was no actual flirtation. The bottom line? You need to do something about that one-star review and you should start by replying to the review online.

  • Lead with an apology

    • Simply say “I’m sorry” but be careful not to admit any wrongdoing. Something as simple as: “I’m sorry you had a bad experience.” You don’t have to admit that Ed, in the shake department, needs additional training on the difference between kale and spinach. Keep it simple.
    • Even if the customer was incredibly rude, and you don’t owe them an apology, still apologize – it will make you and your business look better. Always take the high road.

  • Offer a contact person to talk to

    • Sometimes people just want to vent – give them the main number and a person (maybe you) to talk to about the issue.
    • In actuality, only about 5% of the people who are given a person to talk to will make the call.

  • Talk about how you’ll make it right or do better next time

    • We do not suggest a free meal or a refund in your response online – it may spur more bad reviews from people who are looking for discount or free product.
    • A simple statement about how you are working to improve customer service, or the experience for your customers goes a long way in saving your image from a negative review.

  • Be professional

    • It’s very tempting at times to slap back, or to point out the reviewer’s faults – like Mr. Warrior was horribly rude and barely tipped Betty. Refrain. Remain positive and professional, keeping in mind that others will read your response and you want to be viewed as a complete professional, worthy of their business.

 

How to fix a bad review you didn’t deserve:

Not every review is legitimate. Sometimes you’ll get a review that isn’t from one of your customers, or you’ll get a bad review from a disgruntled employee. Here are a few suggestions for what you can do if you received a bad review you did not deserve:

  • Contact Google or Yelp

    • Ask to have the negative review removed and tell them why.

  • Contact the customer

    • Ask the customer to remove their poor rating…if you have access to their contact information.
      • Make sure you remain polite and never threaten a customer.
    • Listen to the customer, maybe they were having a bad day, maybe they were confused at where they ate. Sometimes simply explaining to them (politely and professionally) will be enough to get them to remove their review.

 

What if Google or Yelp won’t remove a bad review you didn’t deserve:

If you’ve tried everything and can’t get rid of that one-star review, all you can do is respond to the review professionally. For instance, if Mr. Warrior’s comment included something about how bad the pizza was – you can respond that you don’t sell pizza, just delicious cakes and shakes and you would be more than happy to have him come check out your full menu.

Keep in mind that anyone looking at your listing on Google, will read the replies.  Most customers ignore a low review if they can see that you have tried to please the customer, or that the review was posted in error.

 

How to get a higher star-rating on Google and Yelp:

Okay, you’ve gotten a bad review, rather you deserved it or not. You have responded appropriately – now how do you get a higher star-rating? You guessed it!  You’ll need to ask for good reviews. 70% of customers who have had a positive experience will post a review when asked. Here are some other tips to increase your ratings:

 

  • Ask for reviews from happy customers

  • Head off complaints before they complain online

    • Stay aware and if Betty accidently spills cake all over Mr. Potter – apologize and try to make it right by replacing the cake. Try to make the customer happy.
    • Ask them about their experience: were they pleased with their shake? Did you have the cake flavors they were looking for? Try to problem-solve while your customer is still at your place of business.

  • Caution:

    • Don’t ever offer freebies, discounts, or payment in exchange for reviews – it may be illegal in some cases, and both Google and Yelp will flag that type of activity.

  • Thank those who post a good review

    • Always respond to every review. If the review is positive, thank the person sincerely.

 

EXTRA – EXTRA!!

Tomorrow we are offering a class on How to Deal with Difficult Customers!

It’s FREE to attend!  Here’s how to sign up:

TOMORROW’S FREE CLASS

 

 

 

The Review Rabbit Hole:

If you are on your lunch break – or at home, trying to relax, here is a hilarious look at some responses to negative online reviews. We DO NOT suggest you use any of these responses in your own reviews (remember the part about being professional?) …But there are others, like you, who have survived (and maybe even laughed) at a bad review.  Here are some examples – strictly for entertainment purposes.

 

 

For additional information on how to handle a bad review, or for some good ideas on how to increase your star-rating online, please contact us at the Small Business Development Center – SBDC – Serving Paris area:  Lamar, Hunt, Hopkins, Delta, and Red River counties.