What CEOs, Founders, and Managers Should Have in the Employee File Before Making a Termination Decision
The termination meeting might last 10 minutes.
But the documentation supporting that decision may need to explain what happened over the previous six months.
That’s where many employers get into trouble.
A manager has been frustrated with an employee for months. Deadlines have been missed. Attendance has become inconsistent. Expectations haven’t been met. Maybe several conversations have already happened.
Everyone on the management team knows there’s a problem.
But almost nothing has been documented.
Then leadership decides: “We’re terminating the employee.”
The problem isn’t necessarily the decision itself.
The problem is what happens when someone outside the company later asks:
Why?
That’s the real lesson behind one of Denali HR founder Josh Henderson’s most important reminders for business owners:
At-will doesn’t mean consequence-free.
For Utah employers, the better question isn’t simply whether you can terminate someone.
It’s whether your records can clearly show why the decision was made, what happened before it, and whether your process was applied consistently.
🎥 Josh’s Perspective: What Happens When There Is No Paper Trail?
Josh recently discussed what can happen when an employer relies too heavily on at-will employment and terminates someone without documenting the circumstances leading to the decision.
A former employee may apply for unemployment benefits. They may allege discrimination or retaliation. The company may then be asked for information explaining why the employee was terminated.
That’s when conversations that everyone thought they remembered suddenly become much harder to reconstruct.
▶️ Watch Josh explain why the ability to terminate an employee doesn’t eliminate the need for good HR documentation.
The Employee File Should Tell the Same Story Your Manager Does
Imagine someone reviewing the termination six months from now.
They weren’t present when the employee missed an important deadline.
They didn’t hear the manager’s coaching conversations.
They weren’t in the meeting where expectations were discussed.
They don’t know that the same problem happened four times.
They have the records.
That’s why documentation matters.
The U.S. Equal Employment Opportunity Commission (EEOC) recommends that employers consider documenting the reasons for disciplinary and termination decisions. Its guidance also recommends that termination reasons be accurate, supported by records, consistent with company policy, and reviewed against the treatment of similarly situated employees. (EEOC)
Documentation doesn’t guarantee that an employer will never face a complaint.
It creates a contemporaneous record of what actually happened.
What Should You Document Before Firing an Employee?
There isn’t one universal checklist that applies to every termination. The appropriate documentation depends on the employee, circumstances, company policies, applicable laws, and reason for separation.
But before making a performance- or conduct-based termination decision, employers should generally know whether the employee file accurately reflects the history behind that decision.
| Documentation to Review | What It Helps Establish |
| Job description and performance expectations | What the employee was expected to do |
| Performance records | Where actual performance differed from expectations |
| Manager coaching notes | Whether concerns were communicated |
| Written warnings or disciplinary records | What problems were identified and what corrective action was requested |
| Attendance or time records | Objective evidence when attendance or punctuality is relevant |
| Applicable workplace policies | Which company expectations applied |
| Employee responses | The employee’s explanation or perspective |
| Relevant emails or communications | A contemporaneous record of significant conversations |
| Final termination documentation | The legitimate business reason for the final decision |
The objective isn’t to create as much paperwork as possible.
It’s to create accurate documentation that reflects what actually occurred.
Before You Fire Someone, Ask One Question
“What Would This File Look Like to Someone Who Wasn’t There?”
This is one of the most useful ways a CEO or manager can evaluate a termination decision.
Because someone outside your management team may eventually review it.
For example, Utah’s Antidiscrimination and Labor Division (UALD) investigates employment-discrimination complaints. During an investigation, UALD may interview the employer and witnesses and request documents such as personnel files, organizational charts, and paycheck records. Utah’s own guidance identifies termination notices and disciplinary letters as examples of relevant documentation. (Utah Labor Commission)
Unemployment claims create another reason the separation record matters.
Utah’s Department of Workforce Services requires unemployment claimants to provide information surrounding their separation, and employers can be asked to provide the reason a former worker was separated. Utah’s SIDES employer-response system specifically allows employers to provide supporting documents when responding to separation-information requests. (Utah Job Opportunities)
Utah also requires employers to maintain certain unemployment-related employment records, including the date and reason an employee separated from employment, for four calendar years.
That’s why the paper trail matters.
Progressive Discipline Is About More Than Write-Ups
Progressive discipline is sometimes misunderstood as simply:
Warning → Write-up → Final warning → Termination.
A good process is more useful than that.
It creates opportunities to communicate expectations, identify problems, give employees an opportunity to respond or improve when appropriate, and create a contemporaneous record of what occurred.
Not every situation requires the same disciplinary sequence. Serious misconduct, applicable employment agreements, company policies, and other circumstances can change the appropriate response.
The bigger issue is consistency.
The EEOC recommends that employers generally make disciplinary and termination decisions consistently with their policies. When employees who appear similarly situated are treated differently, employers should be able to explain the legitimate reason for that difference. (EEOC)
That makes documentation valuable for more than one employee.
It allows HR to compare decisions across the organization.
Documentation Should Start Before Someone Is About to Be Fired
This is where many companies get the process backwards.
HR shouldn’t receive its first call when a manager says:
“I want this person gone today.”
By then, the company may be trying to recreate months of undocumented history.
A stronger HR system captures important information as it happens:
Expectation → Coaching → Documentation → Follow-up → Improvement or Continued Concern → HR Review → Decision
That creates a much cleaner process than trying to build a personnel file immediately before termination.
What About AI and Modern HR Systems?
Modern HR technology can make documentation significantly easier to organize.
Digital systems can centralize personnel records, policy acknowledgments, attendance information, manager notes, performance reviews, disciplinary documentation, and approval workflows.
AI can also help organizations search, summarize, categorize, and identify patterns across large volumes of HR information.
But there’s an important boundary.
Technology should support employment decisions—not make sensitive termination decisions without appropriate human review.
Context matters.
An AI system may identify repeated absences.
HR still needs to understand whether protected leave, disability accommodation, company policy, inconsistent treatment, or another issue requires consideration.
Software can organize the evidence.
Experienced people still need to evaluate it.
Where a PEO Helps Before Termination
This is where a Professional Employer Organization can provide value beyond payroll.
PEOs commonly support small and mid-sized businesses with payroll processing, HR administration, benefits, workers’ compensation, risk management, and compliance assistance while the client company continues managing its employees and day-to-day operations. (Napeo)
For a growing business without a large internal HR department, that means leadership doesn’t have to navigate every difficult employee situation alone.
Before termination, HR or PEO support can help leadership review questions such as:
- What documentation exists?
- What reason is management giving for the termination?
- Does the documentation support that explanation?
- Was the employee told about the performance or conduct concern?
- Were company policies followed?
- Have similar situations been handled consistently?
- Has the employee recently engaged in legally protected activity?
- Are there leave, accommodation, discrimination, retaliation, or other compliance issues requiring additional review?
- What payroll, benefits, unemployment, or separation administration needs to happen afterward?
The PEO doesn’t replace management’s judgment.
It gives management HR infrastructure and expertise around the decision.
Reactive Termination vs. Structured Termination
| Reactive Process | Structured HR Process |
| “Everyone knows they’re a problem.” | Specific performance or conduct concerns are documented |
| Managers rely on memory | Records are created when significant events occur |
| Policies are checked after the decision | Relevant policies are reviewed beforehand |
| HR learns about the issue at termination | HR is involved earlier when appropriate |
| Similar employee situations aren’t compared | Consistency is reviewed |
| Separation documents are assembled afterward | The personnel record already explains the history |
| Technology stores files | HR professionals use the information to support sound decisions |
Denali HR’s Perspective
The best time to call HR isn’t after you’ve already handed someone a termination letter.
It’s before the decision becomes final.
For CEOs and founders, good documentation isn’t about creating bureaucracy.
It’s about making sure managers communicate clearly, employees understand expectations, policies are applied consistently, and leadership has reliable information when difficult decisions have to be made.
At Denali HR, we help Utah businesses create that structure through HR support, employee documentation, payroll administration, manager guidance, benefits administration, risk management, and PEO services.
Because when a difficult employment decision eventually happens, the question shouldn’t be:
“Can anyone remember what happened?”
The employee file should already tell the story.
Final Takeaway
Josh’s statement captures the issue perfectly:
At-will doesn’t mean consequence-free.
But the lesson from this video isn’t really about defining at-will employment.
It’s about what happens before termination.
- Document expectations.
- Document meaningful performance and conduct concerns.
- Communicate with employees.
- Follow applicable policies.
- Review similar decisions for consistency.
- Bring HR into sensitive situations early.
And before making the final decision, look at the employee file as though you’ve never met anyone involved.
Does the documentation clearly explain why you’re here?
If the answer is no, that’s a sign the HR process may need more work before the termination meeting begins.
📞 Speak With a Local HR Advisor
If your managers are struggling with employee documentation, progressive discipline, performance management, or difficult termination decisions, Denali HR can help you strengthen the process behind those decisions.
Call: +1 801 480 0002
Book a consultation: Contact Us – Denali HR
About the Author
This article was reviewed by Josh Henderson, Founder of Denali HR.
Denali HR, based in Salt Lake City, Utah, provides payroll services, employee benefits administration, HR support, risk management, and PEO services for small and mid-sized businesses.
Sources & Additional Reading
- U.S. Equal Employment Opportunity Commission (EEOC) — I Need to Discipline or Fire an Employee
- U.S. Equal Employment Opportunity Commission (EEOC) — Best Practices of Private Sector Employers
- Utah Labor Commission — Employment Discrimination
- Utah Department of Workforce Services — Unemployment Insurance
- Utah Department of Workforce Services — SIDES Separation Information
