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Symmetry Authors

Symmetry Video Series


Motivating Employees: HR tips for getting employees motivated and engaged with your company.

Terminate or Demote?

Why is the employing struggling? Investigate why the employee isn’t getting the job done. Have you provided the correct training?  Is the job description accurate and have you provided the right training?  Or is the employee simply unsuited for a particular role, but could thrive elsewhere? If so, he might be relieved at the opportunity to be moved back to a position that better suits his talents and skills.

If the employee is failing as a result of a promotion, as yourself if you made the right choice.  If you have tried retaining and moving the employee to multiple roles without success, then you can terminate without regrets and without any HR headaches. 

Have you considered the possible repercussions of your decision?

The decision to fire or demote can have very serious legal, personal, and corporate repercussions—not just for the employee in question, but for the organization as a whole.

Legal Repercussions.  Just as there are laws that provide guidelines for terminating an employee, there are also a number of federal laws designed to protect employees from unfair demotions. Specifically, a demotion must be based on clearly documented performance issues. It must also be tied to policies and procedures consistently reinforced in the past. Without that consistency, the company can open itself up to legal discrimination complaints.


Personal Repercussions.  Firing an employee is a permanent solution. Demoting an employee, however, can have the unintended (sometimes lasting) effects on job performance. When an employee is demoted, feelings of embarrassment may have a demoralizing effect. This can make it difficult for the employee to perform well in the new position, even if it is a “lesser” job well within their skill set. The best way to handle this is by framing the demotion in the most positive terms possible.  


A demotion can be presented to an employee as an opportunity to excel in a new position, one where their skills will be better used. Above all else, avoid making a demotion feel like a punishment. Disgruntled employees can be grumpy and unproductive, and can have a negative impact on office morale, even possibly driving out your top performers.


Corporate Repercussions. If you are considering demoting an employee for misconduct, think about whether or not a demotion will actually solve the problem. Might demoting the employee cause the person to carry those same issues over to the new position? The truth is that the entire company suffers when bad employee behavior is allowed to continue, simply because firing seems difficult or unpleasant. There are behaviors that demotion will not solve, and should be listed in your employee handbook as actionable offenses. These include:

  • Threatening violence
  • Bringing a weapon to work
  • Viewing adult materials on an office computer
  • Stealing company property
  • Lewd behavior


In cases of serious problems of this nature, termination is likely the best course of action.

Is the employee worth retraining?

If the employee is not the right employee for their current position and you believe that moving them to a new position might solve the problem.  The employee may even be relieved to be in a different position where they can excel because it is a better fit to their skill set. 

It is very common to see the Rock Star sales person be promoted to the Sales Manager role.  And sometimes their personality and termperament aren’t suited for supervisory responsibility and in the end find they are much happier selling, and selling well rather than manage the challenges that come with managing employees.

What kind of a message are you sending to other employees? Whatever you decide to do, you will be how you will always handle your employees.  Be sure that should you choose to demote or terminate doesn’t set you up for future problems.  ("Goof off and get punished with a lighter workload? … Hey, I wanna get demoted, too!”)

Whether you decide to terminate or demote, be sure to handle the process in the best possible way. When demoting an employee, treat them with respect, be honest in explaining the reasons behind the demotion, cite documented examples (and not rumor), and present the proposed changes with a positive spin.

Be sure to thoroughly explain the job description and responsibilities of the new position, and give the employee the opportunity to complete meaningful work they can feel proud of. After the demotion, be sure to continue the communication process, giving the employee continued feedback and direction. This employee, though in a demoted position, will be with the company for years to come. Therefore, it is important to create a working relationship based on open communication, trust, and honest feedback.

If termination is the best course of action, be prepared to remain firm in your decision, even in the face of a negative emotional reaction. The terminated employee is likely to feel angry or upset by your decision. You can diffuse this by talking to the person candidly, directly and factually, and refusing to engage in debate.

Go through a thoughtful Performance Improvement Process and present clear examples of problematic behavior, making the grounds for termination crystal clear. Be sure the employee is clear about the details involved in termination process. You might also consider giving the employee a chance to weigh in on how the news should be communicated to the rest of the staff, and the opportunity to discuss what will be said when prospective employers call for a reference. Sensitivity to these exit issues will go a long way to diffusing ill will, and will help the employee for the future.