Merry Christmas: You Are Fired!
Management Cruelty or Symptom of Flawed Evaluation Systems?
Posted November 10, 2013
The Holiday Season begins with Macy’s Thanksgiving Day Parade and ends when the the Times Square ball drops on New Year’s Eve. The message of this season is "Peace on Earth; Good Will to All." But for some employees, this is the firing season.
Merry Christmas, You’re Fired:
Our typical corporate client provides year-end bonuses to employees. They lack performance appraisal systems or have highly subjective systems that do not clearly tie behavior to year-end bonuses.
Assume a CEO has targeted an executive for dismissal early in the New Year. The boss plans to give this executive nominal bonus at year's end. The CEO pays a visit to the company’s employment attorney to discuss the case. She tells the CEO that his plan puts the company at great risk for no gain.
The Age Discrimination in Employment Act of 1967 prevents employers from using age as a basis for hiring or firing people age 40 and above. Any form of bonus pay-out in December would imply that the executive's job-related performance is within acceptable range. She tells the CEO that a December bonus followed by a January termination could provide evidence for the regulatory authorities to conclude that the termination was in violation of the 1967 law.
This concern is not trivial. Based on 280 Federal court cases involving claims under the Age Discrimination in Employment Act, 59% were filed by managerial and professional employees and 54% were filed by employees between the ages of 50 and 59.
It is a Dilemma:
If the CEO provides any year-end bonus, that act can be used against the company to prove age discrimination. On the other hand, to provide all employees except one with bonuses ruins that executive’s Christmas anyway.
The key to avoiding Holiday Season terminations is to provide honest, written performance appraisals once a year for most employees. And provide written feedback on a quarterly basis for employees with performance difficulties. Make sure the conversations are in writing and signed by the employee to confirm that the employee has read the feedback. The employee does not have to agree with the information. The signature simply confirms that it has been read.
If this technique is followed, there will be no surprises when employees do not receive expected year-end bonuses.
Be specific about the “soft” behavioral issues that often derail technically competent employees. Are there operational definitions for concepts like “clear written communications,” “collaboration,” “treating employees with respect,” “listening,” and “customer-centric?”
Use Likert Scales:
We find the use of Likert scaling techniques of great value with our clients. For example below is a Likert Scale we developed to operationally define and to measure the concept of “collaboration:”
This employee does what is in the best interests of the company even if it does not advance his/her interests or the interests of his/her group:
Mixing Business and Religion:
We had a client company where the CEO was Jewish and one Orthodox Jewish family owned most of the equity. The company was located in a small Rhode Island community. Most of the employees in the community were Roman Catholic.
The CEO called us up to request outplacement for an executive she was planning to terminate around Christmas. We had to travel down to the company offices to explain why a Jewish family business ought not to be firing Christians around Christmas.
The CEO was not trying to be cruel. Her perspective was that the executive’s Christmas was going to be ruined anyway once the executive was informed that his bonus for the year would be zero. She thought the holiday season is a good time for the executive to begin networking for his next job. He would be best off getting started on his job search right now. In other words, she was trying to be helpful.
The constant secularization of Christmas as a shopping ritual had caused her to align Christmas with the relatively minor Jewish holiday of Chanukah. The Orthodox owners were also no help: they were insensitive to Christmas as a concept.
We convinced the CEO and the family to wait until January. Holiday Season terminations can sour community relations in return for no long-term corporate benefit.
A Better Corporate New Year's Resolution:
When our clients give thought to Holiday Season terminations, we suggest that they give more serious thought to a New Year’s Resolution of a rigorous performance review process installed by the end of Q1.