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 Retaining Top Personnel
RESIGNATIONS AND TERMINATIONS

  

The Cost of Turnover

Orientation

Motivation

Coaching and Mentoring

Training

Goal Setting

Performance Assessment

Resignation and Termination

More Resources: Retaining Top Personnel

Code of Ethics: Retaining Top Personnel 		  Tips for Termination

Nothing makes termination easy, but these steps may help.
  • Rehearse how you’ll break the news so you’re sensitive but assertive.
  • Conduct the session in private.
  • Clearly state that it’s time to part from the company.
  • Keep the conversation brief and business-like.
  • Outline any benefits the person is entitled to and how any outstanding commissions will be paid.
  • Make terminations in the morning so salespeople can clean out their desks and leave the same day.
  • Prepare a list of all properties that should be accounted for.
  • Ask for the immediate return of company property—IDs, keys, signs, beepers, and so forth.

TIP: If you fear the salesperson will steal confidential information or sabotage the computer system, arrange to have the salesperson’s access to sensitive data blocked prior to the termination and remain with the salesperson while he or she packs up personal items.

Picking Up the Transaction Pieces

The answers to these questions should be covered in your standard independent contractor agreement. Be sure you review it before you terminate a salesperson.
  • Will another salesperson take over the terminated salesperson’s pending listing or sales?
  • If so, who will be responsible for informing the customers?
  • If so, what percentage of the commission will be paid to the salesperson?
  • When will outstanding commissions be paid?

TIP: As soon as a termination is official, reassure all customers and clients that their needs will be met and identify a new contact for them to communicate with.

ADVANCED:
Reducing Risk During Termination

TIP: If the independent contractor agreement and the policy manual don’t agree, follow the termination procedures in the agreement.
  • Document the factors that have led to your decision. For example, records that indicate that the salesperson has not achieved the sales objectives specified in the independent contractor’s agreement.

TIP: Fairness and good risk management dictate that you should have had several formal conversations with a salesperson about his or her failure to meet established objectives prior to termination and offered counseling on ways to improve. The exception would be violent behavior that threatens the office or a proven thief.
  • Seek attorney review of your process and all supporting documents before you act.
  • Provide a period of time—60 to 90 days perhaps—for an individual to improve performance. Hold evaluation meetings after 30 days to discuss progress.
  • Clearly and completely state the reasons for termination.
  • Don’t discuss the termination with other salespeople or employees.
  • Have all final payments ready, if possible. In the case of commissions on pending transactions, have a summary statement of the amounts or percentage of the eventual sales price due to the departing salesperson ready to hand over at termination.

TIP: Your independent contractor agreement should provide specific procedures for handling monies due to a departing salesperson on transactions such as listings that haven’t yet sold and transactions that haven’t closed.

Portions adapted from "Workplace Law and Office Policies: A Guide For Risk Management," 2001, NATIONAL ASSOCIATION OF REALTORS®.

TIP: If you offer severance pay to your employees, be sure that they sign a release promising not to sue before receiving the severance. Salespeople working as independent contractors would typically not receive severance pay.

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