How many of you out there have been fired during the course of your career? How many of you have fired others?
Having sat on both sides of the desk I can say unequivocally that while necessary, neither is a pleasant experience—unless you happen to be a masochist or a sociopath, several of which I’ve met over the years. Terminating employees shouldn’t be easy or pleasant. It is not something to be done capriciously, via Twitter, email or simply because someone says something you don’t like. Some of the most argumentative pains-in-the-ass I’ve ever worked with have also been among the brightest, most dedicated and creative.
The Last Resort
Firings, in most cases, are an action of last resort, a necessary evil for the health and well being of any company operating in such a hyper-competitive environment. However, the problem is not so much the act itself, but how why, how and when you do it.
Back in the heady days of the 1980s and 1990s, Hacksaw Jack Welch, CEO of General Electric, and guru of the ROI set, believed in cutting the bottom 10 percent of the workforce annually. To Welch, it was a way to streamline GE and keep the productivity engine humming. His detractors, of which there are many, believed the practice simply resulted in fearful employees who cut corners in order to raise their ratings. Most would agree that Welch himself had little regard for people. Nurturing was simply not in his nature.
Sometimes bulk firings occur at companies you wouldn’t expect by someone who’s not so much a hacksaw as a surgeon. This took place late last year at Tesla, which reportedly fired as many as 1,200 employees for what it called subpar performance.
Pay to Quit?
At the other end of the spectrum in terms of questionable altruism is Amazon—the company everyone loves to hate and knocking Walmart out of the box as number-one on the hate parade. Once a year the company offers employees in its fulfillment centers $5,000 to quit. It’s called Pay-to-Quit and as Amazon puts it: “We\’re upfront with employees that we hope they don\’t take the offer, but we want to give them a chance to think about what they really want. If they want to pursue a different career, we want to support that.”
This is an idea they picked up after acquiring Zappo’s, which offered new employees $4,000 to leave the company during their initial training period.
In the first year, Amazon’s offer to employees is $2,000 and goes up each year to a maximum of $5,000 which, in reality is barely more than subsistence money for a couple of months. In essence, it’s a buyout package. But not much of one if you consider that the average Amazon warehouse worker is reportedly making $25,000-$30,000 annually.
A lovely sentiment and if it makes Amazon management feel good, who am I to burst their bubble? But it’s basically accomplishing what Hacksaw Jack did in a gentler way—getting rid of what’s perceived as dead wood. Amazon knows that their warehouse workers are easily interchangeable parts and it has a virtually unlimited supply of them at a lower starting salary. Moreover, if an employee quits, they are not eligible for unemployment benefits, thereby saving the company a bunch of money. So much for that warm and fuzzy feeling.
Frankly, I would discourage any company from adopting the Pay-to-Quit strategy. If someone has to be fired for cause then it’s up to the company to do its homework and make the case. Besides it will give HR people something to do.
But what does it say about a company that’s willing to make a one-time payment to get rid of someone instead of making an effort to try and work through their issues? To be fair, tuition for degrees in high demand and assumedly higher paying occupations for employees that are with the company for one year is an attractive prospect and a way to retain some workers.
But is this really creating an engaged workplace, or just another form of so-called golden handcuffs, keeping people in a place they really don’t want to be and siphoning off money without improving company performance?
According to a 2017 survey by the Gallup Organization, only about one-third of U.S. employees are “engaged” in their job and the rest, or those “actively disengaged” could cost $605 billion annually in lost productivity.
But let’s bring that down to ground level. As Sir Richard Branson, founder of everything from Virgin Atlantic to Virgin Mobile to Virgin Galactic, put it: “The way you treat your employees is the way they will treat your customers…train people well enough so they can leave but treat them well enough so they don’t want to.”
Truthfully, sometimes nothing you do will be enough and it becomes a morale issue for that employee as well as others they come into contact with on a daily basis. Low morale equals reduced productivity and a cancer left untreated will inevitably spread. When it’s not a productivity or performance issue, some companies have been proactive by using their own recruiters to find people a job in another company.
But aside from Amazon’s somewhat dangerous strategy of paying people to leave, is there ever a right way to fire an employee without the ever-present threat of a lawsuit, fomenting dissent among other employees or, god forbid, having the firee go postal?
Leaving this to the tender mercies of the HR department in order to avoid an unpleasant situation is the wrong way to go. In my experience, HR people are about as useful as teets on a bull and are about as engaged with their own jobs as the employee they are charged with firing.
At best, HR works from an approved script but with people as with apparel one size does not fit all. There are however certain tried-and-true guidelines.
Do a pre-termination risk analysis to pinpoint and avoid any legal hassles. In other words, make sure there is just cause.
Review a person’s entire personnel file before any exit interviews.
Do not terminate someone via fax, email or any social media vehicle.
Briefly outline the reasons for the dismissal—specifically. The failure to meet previously agreed upon improvement goals.
Work from a checklist but do not read a prepared text. This is probably one of the worst days in this person’s life. Don’t make it demeaning.
Have a severance package or plan ready for them to see and make sure all facets are understood. A general rule of thumb has been one month’s severance for each year of employment.
Do firings on a Friday to give people the chance to cool down over the weekend and not disrupt work or “poison the pool” the following day.
Not to be cold-hearted but they should be required to turn over any company property—laptops, cellphones, keycards, etc.—immediately.
We started this conversation with Amazon and it seems appropriate to end it the same way. To some, the Pay-to-Quit strategy is something of a performance review. I see it as the easy way out.
Firing people, and hiring them, is a skill that should be mastered by every manager and executive. And throwing a meager amount of money at a problem is something that rarely works out in the real world.