When Can You Fire an Employee Without a Performance Improvement Plan?
Employers Need to Understand When a PIP Is Not Recommended
Performance improvement plans (PIPs) are the gold standard of employee discipline. When you have a serious problem, you don't just fire the employee, you make a formal plan for his improvement, meet with the employee often, and hope to see improvement. If you don't see any improvement, then you fire the employee.
It isn't required by law. In all states but Montana, 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, like because of race, pregnancy, or disability) and that an employee can quit without warning for any reason.
You can often do things that will encourage a two-week or more notice period from an employee, but it isn't required by law. Unless your employees are under a contract of some sort (like a union situation), you don't have to do any sort of progressive discipline.
But, most companies don't skip discipline. They do employee improvement plans. They do a series of warning letters and notices. Employees expect it. The courts prefer to see it. And since turnover is expensive and maintaining goodwill among your other employees is important, it makes a lot of financial sense to try to fix problems rather than fire them. But are there any situations where you should just fire an employee without a long warning period? Yes. Absolutely. Here are a few of them.
If you walk in on John and Jane behaving in an inappropriate way behind the file boxes, tell them to put their clothes back on and collect the rest of their personal items from their desks as today is their last day. You saw it yourself, no investigation is needed, and the behavior is severe enough that there is no need to hem and haw over it.
If instead, you catch John walking out to his car with a printer or Jane has a package of unpurchased cigarettes in her purse it is also time to fire the employee. Theft isn't something to ignore or allow — not even a little bit.
You don’t want an environment in which employees feel like they can steal from the company without consequences. Businesses lose millions of dollars per year to employee theft, and you don't want your business losses to add to those numbers.
But what about a fight? This situation is more difficult to sort out. If Jane walks up and punches John in the face without provocation, it's easy to say that Jane is fired. 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, gather statements from any witnesses if other employees saw the altercation.
In several of the cases above, you might want to wait before firing the employee — suspend the employee while you investigate the circumstances. No, fighting is not something for which you’d generally need to write a PIP, but you will want both people out of the workplace while you sort out who was responsible and determine a reasonable solution to the issue.
While Jane shouldn't punch anyone, if John was making lewd comments to her, 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.
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 she violated HIPAA requirements and shared a patient's diagnosis with a friend. You don't want to take these reports at face value.
Customers are not always right (and frequently are wrong). A fellow employee may believe that something is the case, and she may be mistaken. Or, the reporting employee could just be a horrible vindictive person. You need to find out before you take action.
Removing the accused employee from the workplace while you investigate, can help lower the office tension while you work things out. And, if it turns out that John was stealing, you don't want him around anymore anyway.
If you do your investigation and determine the employee was guilty of the wrongdoing, then you 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.
Take Care With Fast Firing
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, right? 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.
Sure, no one should steal a printer, but many businesses allow employees to use company equipment at home, or they turn a blind eye to a little bit of theft. (Who doesn't have at least of a couple of workplace pens end up in their home?) You want to make sure that the company policy is applied to everyone — entry level or executive.
If you want more flexibility with executives, then make that the official policy: Employees who are Grade 15 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 can say, “No, you can't fire that employee because we have allowed this behavior in the past.”
What About Insubordination?
When you have an employee who refuses to do what you've asked, you should fire that person on the spot. Right? Wrong? How about probably wrong? Why is the employee refusing? Is your request reasonable? Is the employee properly trained?
Will this put their hours into overtime, which you've repeatedly told them not to work? Does the employee not understand the scope of his job? Should you provide the employee with more background information?
You need to consider all of these issues before you fire an employee. A one-time case of insubordination is an excellent time to put an employee on a performance improvement plan so that the employee understands that he needs to do as the boss directs. You might be surprised how many people don't understand quite how the working world works.
Remember, just because you can fire someone without going through a lengthy performance improvement plan process doesn't mean you should. PIPs are still the gold standard for employee discipline. You need to use them whenever possible in order to help an employee improve behavior and performance. Firing is the last resort, not a first option.