Resources | Stratus HR®

When to Terminate an Employee: Key Indicators for Difficult Decisions

Written by Sam Yoshida, SHRM-CP, MHR, Stratus HR Consultant | Aug 15, 2025 7:00:00 PM

Let’s face it, firing someone is one of the most dreaded tasks in business. Even seasoned managers often describe a pit in their stomach the night before. But sometimes, the health of your team and company depends on making that tough call.  

I once coached a manager who had an employee who missed deadlines like clockwork. The manager gave feedback, offered extra training, and even rearranged the workload. But after several months, the only thing that had changed was the rest of the team was now picking up the slack. When the manager finally made the decision to part ways, she said it was the hardest conversation she had ever had… but those left behind, the good employees, breathed a sigh of relief.  

Terminations are not about punishment; they’re about protecting productivity, morale, and culture with the remaining employees. Done respectfully and with proper process, they can even help the departing employee move toward a better fit elsewhere in their future endeavors.  

Warning Signs That It May Be Time to Terminate  

Sometimes the decision is clear to fire an employee (theft, violence, damage to company equipment, or serious misconduct). But more often, it’s a slow build of issues over time.   

If you're a manager looking for a sign, here are several to watch for:  

  1. Consistent Underperformance 

If an employee is missing targets despite coaching, training, and clear expectations, it’s a strong indicator that termination may be inevitable.  

Example:  

Ruth’s job was to install small components on circuit boards. Over time, quality control flagged an increasing number of defects linked to her station. At first, Ruth's supervisor thought it was a training issue and arranged for refresher sessions and one-on-one coaching. They even slowed down her production quota to allow more focus on accuracy.  

Despite these adjustments, Ruth's error rate stayed well above the acceptable threshold, causing costly rework and production delays. Other employees had to work overtime to meet shipping deadlines, which created resentment on the floor.  

After two months of documented coaching, written warnings, and clear improvement goals, Ruth's performance remained far below standard. The company decided termination was necessary to maintain quality, protect morale, and meet customer commitments.  

  1. Chronic Attendance Issues

When employees are frequently late or don’t show up altogether to do their job, it erodes trust and disrupts the team rhythm. Oftentimes, managers are left scrambling trying to find the missing employee and might have to fill in themselves or get a last-second replacement.  

To have a solid case for terminating an employee for tardiness or attendance issues, be sure you have documentation that shows the employee knew the expectations for when to arrive for work, they had knowledge regarding consequences for their tardiness or attendance issues, and that the employee could have controlled the outcome. All of this will help your case in the event the terminated employee files for unemployment insurance benefits. 

Good documentation for performance issues may include a signed acknowledgement form that has expectations clearly written out, as well as any warnings given (both verbal and written). 

  1. Inability to Meet Core Job Requirements

If the role requires a specific skill and the employee either cannot or will not learn it, the gap becomes a business risk.  

Example:  

Brock was hired as a medical billing specialist for a clinic. The position required precise coding of procedures to ensure insurance reimbursement. Despite a solid onboarding process and ongoing mentoring, Brock continued to submit claims with incorrect codes, leading to delayed payments and patient complaints.  

Over three months, Brock's supervisor gave written feedback, offered refresher courses, and reassigned some workload. But the same coding errors persisted, putting the clinic’s revenue at risk.  

Eventually, Brock’s manager decided he could not fulfill the essential accuracy requirements of the job and ended his employment.  

  1. No Progress After Warnings

When you have provided written warnings and a structured plan for improvement without change, you are left with few options. Delaying termination when warranted may also put your company at risk.   

When an employee is not terminated for performance issues after you have followed your company's corrective action procedures, you may be setting your company up for a legal battle. For example, let’s say another employee in the future has similar problems and is terminated immediately – and they also happen to be part of a protected class. The inconsistent treatment may be perceived as discrimination and end up as a lawsuit.   

Because it's easy to make mistakes, always follow your company policies. Otherwise, you may be unintentionally setting a precedent that could get your organization into trouble. 

  1. Serious Misconduct 

Substance abuse, harassment, theft of company property, workplace violence, threats, or anything that warrants immediate termination should never be put on hold. Find a private location and include human resources to provide support for a face-to-face conversation with the person. 

Be sure you document issues as they build over time to support your next steps. 

When to Schedule a Termination Meeting  

If you must terminate, aim for a Tuesday or Wednesday morning. This gives the employee time to process and reach out for support before the weekend. It also avoids starting or ending the week with emotional disruption. Be sure to avoid holidays, birthdays, or just before big personal events such as a work anniversary unless there is a legal urgency.  

Behavioral Red Flags  

Performance is not the only issue that warrants disciplinary action that may lead to termination; inappropriate workplace behavior can be just as damaging. However, many behavioral problems can be fixed with coaching when the employee is coachable. 

Toxic Attitude 

Gossip, drama, and constant negativity can spread fast. Identify the root perpetrator as soon as possible to prevent office drama from damaging your culture. Address the problem head-on so there is no room for misunderstanding. 

Disrespect 

Hostility toward coworkers, managers, or customers should never be ignored. Catching the problem before it escalates may help you avoid a termination meeting. 

Insubordination 

Refusing reasonable instructions disrupts workflows, damages a manager’s authority, and threatens respect. While it's important to hear both sides of the story to ensure your manager is acting appropriately, workers may need a reminder of how to show respect for company leadership. 

Harassment or Bullying 

Your company should have a zero-tolerance policy for harassment or bullying. Any claims should be addressed immediately; conduct an investigation and include ample documentation before making a final decision. 

Gross Misconduct 

Vandalism, theft, or threats almost always call for swift removal. There may be instances where an employee is innocent, such as not realizing they took something home that they shouldn't have and simply need to return company property, but certain actions that are deemed criminal behavior are almost always grounds for termination. 

Giving Fair Chances Before Termination  

A terminated employee should never be surprised they were let go. In fact, firing should be the last resort. But before you reach that point:  

  1. Hold Regular Evaluations: Catch issues early on and address them in your regular one-on-one meetings. 
  2. Create a Clear Improvement Plan: Set specific goals and timelines, which may include intervals of 30–90 days.  
  3. Offer Resources: Consider options like additional training, mentoring, or adjusted workloads.  
  4. Document Everything: Conversations, investigations, warnings, tracked progress, and the termination letter all need to be documented.  
  5. Partner With HR: Be sure to include your HR professionals and/or Stratus HR Rep for third party objectivity and compliance.  

As a standard rule of thumb, most companies give 2–3 documented chances to improve unless the issue is serious misconduct.  

Avoid “Silent Terminations”

Sometimes employers try to make people quit by reassigning them to bad shifts, excluding them, or applying unfair pressure. This is risky, damaging, and can lead to claims of constructive dismissal or wrongful termination. Be upfront; if the relationship is not working, it’s time to have the difficult conversation.  

Conclusion

Firing someone will never “feel good” until after it’s over. But when approached with preparation, clarity, and compassion, things will go much more smoothly. Be sure you have thorough documentation, offer fair chances, and treat people respectfully. This will help protect your organization and maintain your integrity as a leader.  

For more tips or information, please contact your Stratus HR rep. Not a current Stratus HR client? Book a free consultation and our team will reach out shortly.