The Short Answer

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Why Employee Exit Is Not a Routine Activity

It’s very important to understand that getting employees out of the organisation is not a standard activity.

Yes, I mean, we do have systems and processes in place, which say that I will give you one month notice as an organisation if I want to exit you.

And you as an employee, if you want to exit the organisation, you need to give me a one month notice, or of whatever time period we have decided.

But to be able to substantiate this exit from an organisation’s perspective, to be strongly defended if it ever goes into litigation, an organisation should be fairly strong in terms of following certain systems and processes.

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Exit Due to Underperformance

So let’s first discuss about what do we need to do if we need to fire somebody for underperformance.

Now, the first and the foremost thing is that if you need to fire somebody for underperformance, we need to be very clear that this is underperformance.

And to be understood as underperformance, they should have been clearly communicated what is performance.

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Communicating Performance Expectations

So once you have told an employee that this is what performance is, and then you have told the employee that as a result of this performance, I find that you are not performing.

So I am demonstrating to you or I am giving you examples of underperformance.

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Providing Opportunities to Improve

And then as a third step, an organization should have given the opportunity to the employee to try and cope up.

Which means I show you that you’re underperforming.

But, now I give you chance one, chance two, or chance three.

Or opportunity one, two, and three to try and come up to performance levels.

And as a result, of not being able to cope up, I’m going to be exiting you from the organization.

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Classifying Underperformance

So as long as you can prove that you are very clear in terms of communicating what is performance.

As long as you’re going to then measure that performance and show to the employee that this is what I expected and this is what you have done.

I can classify you as under-performer.

So as long as you can prove that you are very clear in terms of communicating what is performance.

As long as you’re going to then measure that performance and show to the employee that this is what I expected and this is what you have done.

I can classify you as under-performer.

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Demonstrating Fair Opportunity

And the third, as long as you can then demonstrate that I have given, as an organisation opportunities to move up from the under-performer scale to the performance scale.

And as a result of a failure to having been able to move up, I therefore exit you.

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Exit Due to Misconduct

So that’s in the case of an underperformance.

What do we do in case we were to exit somebody as a result of misconduct?

Now, first is when we talk about misconduct, misconduct can also be said breach of policies.

You would have as an organisation certain systems, processes that every individual needs to follow.

If an employee doesn’t follow those systems and processes, so we would call it as a breach of policy.

Or we could classify that as a misconduct.

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Communicating the Misconduct

And if somebody needs to be exited from the organization as a result of misconduct, then the first and the foremost thing that you need to do is communicate to the employee.

That I believe as an organisation that you have broken this policy.

Or you have breached this policy.

Or this is the misconduct that you have done.

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Policies Must Be Clearly Defined

So, which means the first and the foremost thing is that you need to have those policies, systems and processes written down and defined.

Or communicated or be aware to the people.

We cannot assume that as a journal practice, people should be aware of certain things.

So, the communication should not happen.

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Principles of Natural Justice

Now, once you have given that information to the employee.

Then we need to give an opportunity to the employee to defend themselves.

The principles of natural justice need to follow.

Which means an employee is allowed to give reasoning on why this breach happened.

And this could be that I did not do this breach at all.

Or the reason I did this breach was X, Y, Z reason.

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Decision and Correlation

And once you have captured those reasons.

Once you have understood those reasons.

Then you need to take a decision based on the understanding of the reason.

But again, the reason explained by the employee and the actual decision taken by the organization have to have some kind of a correlation.

And even if they don’t have any kind of correlation.

The reason for the decision has to be explained clearly.

Why you have taken that decision.

And why a correlation was drawn or not drawn.

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Exit Due to Redundancy: Layoff and Retrenchment

The third aspect is what do we do if we have no job?

The terms we use in India are layoff and retrenchment.

Both of them technically have a different meaning.

But for our understanding, let us just talk about if we don’t have any task to be given to an employee.

And whether in order to save cost or to save headcount, we want to exit the employee.

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Process for Retrenchment

Then you have certain processes that we need to follow.

Which would involve informing the authorities if you are meeting a certain criteria.

And even if you’re not meeting a certain criteria.

You need to pay the money which is due to the employee.

And secondly, certain compensation that needs to be given to the employee.

Once these things are done, there is a formula in terms of how you calculate this kind of compensation.

Once these things are done, a specific reason is attributed.

And then the employee can be retrenched or laid off.

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Layoff vs Retrenchment

The layoff will be a little more complicated.

Because that’s not really a permanent exit.

And that’s an exit for a short term only.

But retrenchment means a permanent exit of the employee.

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The Most Common but Worst Reason for Exit

The fourth is, and which is a very common aspect.

A lot of employees would have faced it.

A lot of managers would have seen other colleagues demonstrate it.

Our research says about 80% of the employees have faced this kind of concept.

That basically is exiting somebody on the whims and fancies of the manager or the management.

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What Do Whims and Fancies Mean?

That it means that the manager feels that the person is not there.

The person is not up to the mark.

The person is not really good.

Or the person is just married.

Or the person is the only woman or the only man in the team.

These are all the reasons which you’ve actually heard from managers.

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Why This Is Dangerous

So you don’t have actually a reason of misconduct.

You don’t have a reason of retrenchment.

You don’t have a reason of underperformance.

But you still need to exit an employee.

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Our Clear Recommendation

Well, if as an organisation, you’re encouraging these kind of exits.

Then it’s not a good thing to be doing.

As a leader, you should be aware that about 70 percent of the exits happen as a result of the fourth reason.

Which is managers wanting to exit their employees just because they want them to be out.

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Better Alternatives

If a situation does arise that the manager and the employee cannot get along.

It is always advisable to try and shift them into different teams.

If different teams is also not possible.

Then have them reporting to someone else directly.

And create very clearly defined job descriptions which do not overlap.

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Why Culture Suffers

The solution of exiting both the employees is definitely not the right thing to do.

That’s a fairly unprofessional behavior of managing.

Because whatever you do is going to give a message to the rest of the employees.

And those messages are what makes an organisation culture stronger or weaker.

Every action we take makes us stronger or weaker culturally.

If we can avoid the fourth way of exiting employees.

We will only make our organisation culture stronger.

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This article is based on the transcript of the original podcast of the same name featured in India HR Guide.
The transcript has been translated into this article with the support of AI and a human‑in‑the‑loop process.