It is therefore essential for supervisors at small companies, who may be the company's owners or executives, to be well-versed in what is legal and what is effective when it comes to employee discipline.
The first step for every business owner when designing a framework for employee discipline is to hire an employment attorney who can assist with creating an employee handbook.
The handbook should clearly set forth your company's expectations for employees, describe what they can expect from your company and lay out your legal obligations as an employer as well as the employee's rights.
The U.S. Department of Labor offers information for employers about federal laws that affect workplace issues, and because such rules differ from state to state, it is also wise to consult your state’s labor office when creating your company’s policies.
You should then distribute your company’s handbook to employees, who should be required to sign and acknowledge that they have received and read the document.
If, after signing the handbook, an employee breaks a company policy, management may seek to discipline or terminate the employee. In such cases, a company decreases its legal risk if it can show that it has warned and counseled the employee, making it clear to them what they were doing wrong and what they need to do in order to meet the company’s expectations.
To provide employees with adequate information about their performance or behavior, there are four general types of disciplinary action available when employees fail to meet expected levels of conduct. With each action, documentation in the form of emails, personal notes and minutes of meetings is crucial. After all, you may have to use these documents to convince a jury that the company was not discriminating if faced with a lawsuit.
The four types of disciplinary actions are:
1) Verbal warning: This is a face-to-face discussion of work-related problems. Such discussions should be carried out in a calm manner. If the supervisor is angry with the employee, make sure he or she takes time to cool down before talking with the employee. In these cases it may be a good idea to have a second manager present to serve as a witness.
2) Written warning: Such warnings should be presented to the employee face-to-face with a second manager present. The warning should include:
- comments on how to improve
- specific objectives and deadlines for correcting the situation
- the consequences if behavior does not improve
- and a place for the employee to sign, acknowledging that he or she has received the warning, regardless of whether he or she agrees with its contents.
After the written warning is presented to the employee, and a manager gives a verbal summary of its contents, the employee should have an opportunity to tell their side of the story.
3) Suspension: This may range from one day to two weeks or more and should be unpaid.
4) Termination: A termination meeting should be held face-to-face, and generally at least two company representatives should be present. A script should be prepared beforehand so that the meeting can be kept short, no more than 5 to 10 minutes. An employee's passwords, access to buildings, computers or other company assets should be disabled beforehand to prevent the employee from doing damage to the business after they're fired. If your company does not have a severance plan subject to the Employee Retirement Security Income Act (ERISA), you may want to consider offering severance pay, but only if the employee agrees to sign a separation agreement that releases the employee from any claims against the company.
So how long do you wait to discipline an employee? John Phillips, an employment attorney, writes that “if there are grounds for discipline, you don’t wait,” adding that waiting can open the door for second-guessing and even discrimination claims.”
When it is time to act, plan out each step along the way, down to the tone of your voice, keeping in mind the specific personality type of the employee you’re disciplining. Mark Suster, an entrepreneur-turned-investor, writes that some individuals thrive on “light” feedback, while others tend to be motivated by a more heavy-handed approach that elicits a fear of being in “trouble.”
And while you should keep the personality type of the employee whom you’re dealing with in mind, all staff should be held to the same company policies, and disciplinary actions should be applied to all members of your team with consistency.
Inconsistency in the disciplinary process accounts for a large percentage of the discriminatory claims that end up in court and can result in morale problems and hefty fines levied against companies. Especially when you’re small, those are things you just can’t afford.