Demote or Terminate?

Poor performance or unprofessional behavior in an employee is never an easy issue for supervisors. We value our employees and want to see them succeed, but having an employee that causes disruption creates a stressful and unpleasant situation for everyone involved. In situations like these, often a line is drawn; consequences are inevitable and the question becomes: demote or terminate? Studies show that 52% of demoted employees will leave their organization within a year but in some cases demotion, retraining, etc. may have a positive effect.

The best way to avoid having to terminate or demote employees is to promote with care. Before promoting an employee, be sure they are able to handle the additional duties that come with their new position. In addition, have clear policies in place for situations where termination or demotion are necessary; outline which applies and what it means for the employee and the organization and what steps will be taken. Having these processes in place will help to make your decision easier when the time comes and can ensure nothing is a surprise to your employees.

No matter how prepared you are, the need to demote or terminate is unfortunately inevitable. When it does arise, take your time to assess and make your decision. Nonperformance can be due to the need for additional training or an outside stressor that can be helped through your  employee assistance program (EAP). Taking time to assess the situation will help you to make the best decision for the employee and the organization.

Where demotion is necessary, communication is key. It should not come as a surprise to the employee and expectations should be precisely outlined. Demotions should be based on clearly documented performance issues and tied to organizational policies and procedures. Maintaining consistency in handling demotions (and terminations) can ensure your employees know explicitly the expectations and can aid in avoiding potential legal action against your organization.

When deciding whether to demote or terminate an employee, weigh the ability to correct the issue with the impact a demotion would have on organizational productivity. Demotion can leave an employee feeling embarrassed or demoralized, which in turn could have a negative effect on the team. It is important to understand there will likely be a negative reaction to demotion and assess whether your employee can get through the frustration. In addition, look at how well the team can cope with a temporary decrease in productivity for the individual. If the employee is unlikely to move past the demotion or it will have a lasting negative effect on the team, it is time to consider termination.

Some employers prefer to retain staff, keeping even under-performing staff in lower positions, but there are situations where this is not an option. When performance cannot be corrected, the issues are behavioral, or there is a poor culture fit, demotion and/or additional training is unlikely to resolve the issue. In these instances, termination is inevitable and should be done as quickly and carefully as possible to reduce the negative impact on the workforce and organizational productivity. When terminating, just as with demotions, it should not come as a surprise. Terminations should be based on clear and specific issues and clearly outlined in policies and procedures.

No matter your decision, these situations are never easy. Carefully consider your options, make an educated decision, and remember self-care. A manager’s job is not always easy or pleasant and it is important to acknowledge the stress these decisions can cause for us, the employees and the organization. As you move through the process, be detailed, clear, and empathetic. In the end, remember that the decisions you make are in the best interest of your employees and your organization.

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