Q: At the division I run, we declined to renew an employee's contract and she sued us for gender discrimination, even though more than half of the people in our department are women. What's the best way to ensure that we can separate from employees quickly, without drama, and with dignity for the employee involved? We try to treat our people well but sometimes it's necessary to terminate the employment relationship.

A: The best way to treat your team members with dignity is by speaking with them openly about their performance and career prospects, and by offering suggestions for changes. You must also be clear about your requirements for the job. If you’re not being candid, you’re doing your employees — and yourself — a disservice.

People can’t improve if they don’t know what you consider substandard performance and you can’t reasonably expect them to read your mind. What’s more, most of us feel more betrayed when bad news comes as a surprise. Did the employee believe her contract would be renewed? Why did she believe that, if so? Perhaps it was because she didn’t know her work wasn’t up to par.  

That’s why feedback is key. It is even more important when you are terminating someone.

 “A lot of negative feelings can be mitigated with clear, on-going communication,” said Eliza Wicher, an industrial and organisational psychologist who is a senior manager in talent development at Motorola Solutions in Chicago.

How you frame the discussion is significant. “In a situation like this, the employee's perception of how they were treated is just as important as the rationale behind the employer's decision,” Wicher said. 

Why the employee’s contract was not renewed is also an important question. If you declined to offer her another contract because your budget shrunk, or because you had too many employees in one group, you should have let her know in advance that this was likely to happen, Wicher said. It’s only fair to give her enough time to look for another position if you're not firing her because she did something wrong. 

If her performance was the reason for not renewing her contract, she should have been forewarned, albeit in a different way.

“All employees, even contract employees, should have a clear understanding of how they are performing and be given opportunities to improve performance,” Wicher said.

You can accomplish this by giving specific feedback frequently, letting your employee know exactly what she needs to do. If you didn’t tell her what was wrong and give her time to fix it according to an agreed-upon plan, you didn’t treat her fairly. You may not have discriminated against her, but you didn’t give her the chance to fight for her job.

Work Ethic is a twice-monthly column on BBC Capital in which we consider the ethical and interpersonal dilemmas that workers face around the world. We welcome knotty questions from readers at workethic@bbc.com.

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