CHAPTER

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4

DISCIPLINE & DISCHARGE

THE ICE BENEATH THE WAVES: AN EXPENSIVE LESSON IN PROCRASTINATION
(The Cost of Avoidance)

My client employed a salesman, Edward. His performance over 12 years could best be described as, “Once in a great while comes somewhat close to meeting expectations.”

Various corrective measures had been attempted over the years: retraining, coaching, counseling, performance improvement plans, even changing supervisors. Yet other than occasional fleeting improvement, the problems remained.

Finally, after years of low sales, alienated coworkers, and numerous customer complaints, the company decided to fire Edward. However, because it had tolerated him for so long and didn’t get its ducks in row before acting, and because he was now well into his 50s, the company ended up having to defend an age discrimination claim.

After months of litigation, the company agreed to pay a settlement to avoid incurring further litigation cost and risk of adverse judgment. Total claim expense was just over $100,000.

I subsequently learned that Edward’s replacement, working the same territory and in her first year, outsold Edward’s best year by nearly $200,000. In subsequent years, the performance gap grew even larger. In addition, customer complaints and defections virtually ceased, and coworkers described her as a good team player.

Now get this: After we settled Edward’s claim, the company’s CEO complained to me about the high cost of litigation and having had to spend $100,000 to get rid of a lousy employee. “The legal system is a pain in the butt,” he said.

However, the CEO never did the math regarding what it cost his company to continue employing Edward: how much revenue it had lost, how many customers had defected to competitors, and how many employees Edward had alienated. In other words, the CEO never calculated how many multiples of the litigation cost had already been lost by keeping Edward employed for 12 years.

MORAL OF THE STORY

This case is not that unusual. Employers tolerate problematic employees for years, never assessing the cost of keeping them employed. When they finally act and the employee sues, they howl about legal fees and paying for settlements. Yet by focusing on the iceberg’s tip—the visible one-tenth—they miss the rest of it, the nine-tenths of their true loss in allowing the status quo to remain for so long.

The lesson of this story is that if you have an employee problem, put together a game plan now. Don’t wait for the “I can’t take it anymore!” moment.

It’s your call. Do you want to delay action so that you can eventually kvetch about the tip of the iceberg? Or do you want to do something now about the growing body of ice beneath your waves?

TOUGH TRIAL LAWYER TURNS TIMID
(Beware the Instinct to Avoid)

When I started my first law job, Alfred was my mentor. Our firm’s chief trial lawyer and a former college athlete, Alfred stood well over six feet tall, had broad shoulders, a thick beard, and a deep, booming voice. With over 100 jury trials under his belt, Alfred thrived on conflict and high drama.

Alfred and I had adjacent offices and shared a legal secretary, Susan. Although Susan was pleasant, her typing was slow and error prone. Also, she had a tendency to misfile documents and mistranscribe telephone messages.

Alfred and I discussed our mutual frustration. “Should we sit down with Susan and let her know?” I asked.

“No,” Alfred replied. “We’ll tell Liz and she’ll talk to Susan.” (Liz was our firm’s administrator.) “That’s Liz’s job,” Alfred added.

After we went upstairs to Liz’s office and shared our frustrations, Liz met with Susan. As a result, there was discernible behavior change: Susan no longer smiled or greeted us. But the performance problems remained.

One day, Alfred said to me, “Enough’s enough. Susan’s got to go.”

“How should we handle it?” I asked.

“Easy. We’ll tell Liz and she’ll handle it.”

The axe hadn’t yet fallen when I returned from lunch a few days later. I got off the elevator and headed down the hall to my office. I saw Alfred coming out of his office and heading my way, almost at a trot. He was moving fast.

As our paths crossed, I said, “What’s up?”

He looked at me, and in an urgent whisper said, “Liz is coming downstairs to do the deed. I’m getting the hell out of here!”

With that, Alfred bolted past me toward the elevator bank.

I took another step toward my office and stopped. After a moment’s hesitation, I wheeled around and yelled to Alfred, “Hold that elevator!”

MORAL OF THE STORY

There’s a good analogy between downhill skiing and managing employees.

In skiing, beginners must overcome a natural, intuitive, and seemingly self-protective instinct. When at the top of the slope facing downhill, beginners are naturally fearful of going too fast, out of control, and crashing. As a result, they resist the gravitational pull of the downhill slope by leaning back on their skis. Invariably, however, giving in to this instinct produces the very thing they fear. They go too fast, out of control, and crash.

So what do ski instructors teach? The opposite. Put your weight forward on your skis, toward that downhill slope. This makes no sense at first and seems a sure recipe for disaster, yet if you stay with it, you’ll discover it works. Only by doing the opposite of what your instinct tells you to do can you control speed and direction and stay upright.

There’s also a natural, intuitive, and seemingly self-protective instinct in management, one that’s equally misguided. It’s to avoid problematic workplace situations. We can’t predict the outcome if we confront the problem directly, so we lean back on our skis in hopes the problem will go away on its own or someone else will fix it. Yet almost inevitably the opposite happens. Avoidance makes the problem worse and increases the likelihood that what we fear will come to pass: a bad ending to a workplace relationship.

Fortunately, managers can use that avoidance instinct the same way skiers use the lean-back-on-their-skis instinct—as a trigger to do the opposite. That gnarly employee problem you have, the one you’ve been putting off dealing with? Instead of moving it off the agenda or to the bottom of the agenda, move it to the top of your agenda. Develop a game plan and execute it. Now.

For a long time, Alfred and I had repressed our frustrations with Susan’s performance. We said nothing to her. And then when things hit the breaking point, we still didn’t talk to her. It was easier in the moment to have Liz do it. And you can see how successful that approach was.

Had Alfred and I put our weight forward on our skis, we’d have been prompt, candid, direct, and specific with Susan about our expectations, the gap in meeting them, and what was needed to close the gap. Had we done so, I predict one of two things would have occurred: (1) Susan would have closed the performance gap to our satisfaction or (2) a transition to a new secretary would have happened a lot sooner, and without bitterness or rancor.

And neither of us would have had to run for the elevator.

DISCHARGE FROM FOUR DOORS DOWN
(Email Is Not the Way to Convey an Emotionally Sensitive Message)

The company had grown to where it needed to hire a CFO. Following a nationwide search, it hired Ralph, a Harvard MBA. Terms were negotiated, a contract signed, and Ralph moved his family across the country for his new job.

Shortly after his arrival, Ralph participated in his first executive committee meeting. During the meeting, he made a comment that bothered the CEO, Jordan. Jordan said nothing at the time. However, after he got back to his office, he used the then fairly new communication tool called email. Here’s what he wrote:

To: Ralph

From: Jordan

Subject: Today’s Executive Committee Meeting

Sent: October 14, 1997, 10:14 AM

I was disappointed with some of your comments in today’s meeting about our expansion plan. I’m not sure you fully understand what we’re trying to accomplish.

Click Send.

Ralph responded with a message of his own.

To: Jordan

From: Ralph

Subject: Today’s Executive Committee Meeting

Sent: October 14, 1997, 10:39 AM

You are mistaken Jordan. I fully understand the Company’s business objectives. However, I was hired to ensure that they are pursued within a framework of sound and proper business practices, and with a view to protecting the company’s assets and preserving shareholder value. I’m simply doing my job.

Click Send.

Jordan stewed on this message for a while, then composed the following:

To: Ralph

From: Jordan

Subject: Today’s Executive Committee Meeting

Sent: October 14, 1997, 11:49 AM

THE HELL I’M MISTAKEN! I just need team players who support what I’m trying to accomplish as opposed to getting in my way!

Click Send.

Given the heat in Jordan’s message, Ralph decided it would be better not to reply.

Things quieted down for a while. The two men never talked about their email exchange but went on, at least to all appearances, to business as usual. However, it didn’t take long before another disagreement touched off a new round of emails. Jordan ended that exchange with the following:

To: Ralph

From: Jordan

Cc: Human Resources

Subject: Moving on!

Sent: October 28, 1997, 2:43 PM

It has become increasingly clear to me that as a company, we cannot succeed with you as its CFO. We made a mistake when we hired you, which I’m rectifying today. Our HR Director will process your termination. Best of luck in the future.

Click Send.

After Ralph received this message, he didn’t click Reply. Instead, he clicked Forward. (You can guess to whom.)

Acrimonious negotiations ensued between the parties and their attorneys regarding Ralph’s threatened breach-of-contract and whistleblower claims. Eventually, a deal was cut. It wasn’t cheap.

Regarding Jordan’s use of email to convey his issues with Ralph, it wasn’t due to geographic separation where the executives worked in different cities. During their entire series of increasingly negative exchanges, Jordan and Ralph were only four office doors apart.

MORAL OF THE STORY

This story highlights another aspect of the avoidance instinct discussed in the preceding story. Few of us enjoy face-to-face conversations on difficult subjects. Thus, email seems a convenient, less-stressful way to convey tough messages.

Yet it’s a big mistake to inform an employee of problematic behavior without speaking to and looking at the person at the same time. First, your lack of directness will likely be perceived as disrespect. Second, your attempt at conveying a sensitive message via writing is likely to be construed in ways you don’t foresee. Third, you won’t have a real-time opportunity to head off misunderstanding or negative emotions; instead, the employee will read, reread, and re-reread your words, letting them fester and stew.

I coach managers on how to avoid dissing employees by “DISing” them. That means being direct, immediate, and specific. Email doesn’t satisfy the direct test. Nor does a text, letter, memo, or voicemail message. Rather, it requires a face-to-face exchange. The avoidance instinct says that’s the least comfortable option yet to achieve positive results, it’s by far the most effective.

Instead of waiting until he was back in his office, Jordan should have pulled Ralph aside after the meeting and shared his concerns directly. He would have had a far greater chance to achieve a positive outcome had he done so. But the temptation to take the easy way out—put fingers on keyboard while alone in the office—proved too much.

As I explained in “Texas Wes and the Same Day Summary,” email does have an important role in workplace communication. That’s when it serves as an after-the-fact follow-up summary of key points discussed in a face-to-face conversation and not as a substitute for it.

THE UNION MAN AND THE WHITE LIE
(Straying from the Truth Is Never a Good Idea)

Mick was a stocky, grizzled, 58-year-old dockworker at a trucking company. He combined low productivity with a chip-on-the-shoulder attitude. Over the years, he’d been repeatedly passed over for advancement but allowed to keep his job. Mick was passionately pro-union and frustrated by the fact that unionization efforts at his trucking terminal had been unsuccessful, in contrast to the company’s terminals in other states.

Mick punctuated his mediocre work performance with two incidents of misconduct. The first occurred at an all-employees meeting at which the operations manager announced a new policy regarding restrictions on PTO (paid time off). Mick unloaded on the operations manager: “If we had a union here, we wouldn’t have to put up with this bullshit policy, put out by bullshit managers at a bullshit company!”

Company management wanted to fire Mick for this outburst. However, worries about potential union and other legal trouble led it to issue Mick a disciplinary write-up instead.

Several months later, after the union called a strike at a company terminal in another state, Mick attempted to organize a sympathy picket at his terminal. Among the employees he lobbied was a young dockworker, Bill. Mick asked him, “If a picket line gets set up, will you support it?”

Bill replied, “Sorry, Mick, I’ve got a mortgage and car payments to make, and my wife is pregnant. I can’t afford to lose my job. I’d have to cross the picket line.”

Mick asked, “That house of yours, do you have insurance on it?”

“Yes, of course.”

“What about your car?”

After a pause and a quizzical look, Bill said, “Uh, yes.”

Mick then asked, “That wife of yours, do you have insurance on her?”

Bill didn’t answer. Instead, he walked away.

Bill did not report this incident to management. He was too frightened. However, an employee overheard Bill telling a friend at work about it and asking him in earnest, “Do you think Mick’s serious?” The employee reported what he heard to management, which conducted an investigation.

When confronted, Mick admitted asking Bill those questions, but said, “I didn’t mean anything by it. I was only joking with the kid.”

Management wanted to fire Mick, but fears of union or other legal trouble again induced it to settle for a disciplinary write-up.

There were no further incidents with Mick. His work effort remained mediocre, but he confined his inflammatory comments to low-volume muttering.

A subsequent business downturn resulted in a company-wide directive to cut operation costs by 20 percent. This included a reduction in force (RIF) at Mick’s terminal. Management evaluated employees from best to worst, letting go the ones at the bottom.

By all accounts except perhaps his own, Mick was easily the worst employee. Repressing its glee, management informed Mick that he was being let go as part of the RIF.

Mick responded by filing a claim of age discrimination with the state antidiscrimination agency. He cited the fact that he was the oldest dockworker, had more seniority than most, yet was the first chosen to be fired.

The agency scheduled a fact-finding conference for the parties to present their positions and evidence. As the company’s attorney, I felt confident we could show that Mick’s age had nothing to do with his termination; rather, it was his demonstrably low productivity and misbehavior.

At the conference, however, my client and I were in for a surprise. Mick walked in with a boom box music machine. He plugged it into a wall socket and popped in a cassette tape.

(Note to millennials: This case happened a long time ago.)

We heard three recordings of conversations Mick had with management: one with his immediate supervisor, one with the operations manager, and one with the terminal general manager. None of them knew they were being recorded. Here’s what we heard:

Mick to his immediate supervisor: “Hey boss: Is the work I’m doing okay with you?” Supervisor to Mick: “Yeah sure. I’ve got no issues with you.”

Mick to the operations manager: “Remember that meeting where I got a little hot under the collar and said some things I probably shouldn’t have? Well, I didn’t really mean the stuff I said. I’m fine with you. Are we cool?” Operations manager to Mick: “Don’t worry about it. It’s over and done with as far as I’m concerned.”

Mick to the general manager: “You understand I was only joking with Bill, don’t you? I mean, I know I shouldn’t have. Kids these days, you never know how they’re gonna take stuff.” General manager to Mick: “Sure. I understand. Things are fine now. It’s in the past.”

After Mick hit the machine’s stop button, I called a time out to confer with my witnesses. Despite what they’d said on the tape, all three managers insisted that Mick’s low productivity, profane explosion at the operations manager’s meeting, and threat to Bill were critical factors in the decision to select him for the RIF.

So what reasons did they give for lying to Mick? They said it was the easiest thing to do at the time. It got Mick to stop pestering them.

For Mick, management’s white lies turned green. We’d gone to the hearing adamant that Mick wasn’t going to get a nickel. However, these taped conversations altered our assessment. We ended up agreeing to a fairly generous severance package in exchange for Mick’s permanently leaving the company and releasing all claims.

MORAL OF THE STORY

Benjamin Franklin said it best: “Honesty is the best policy.” This is particularly true when honesty seems least convenient. The managers at this company valued honesty and integrity. Yet they told lies. They rationalized that circumstances warranted an exception to “Honesty is the best policy.”

As in the two preceding stories, the culprit is once again that seductive, seemingly self-protective instinct to avoid. Lies may work in the short term. Our Micks may get out of our faces and temporarily stop pestering us. In my experience, however, the long-term costs and risks of avoidance far outweigh the short-term benefits.

In my law practice years, I think I heard just about every workplace lie you could imagine: lies by commission (outright falsehoods), lies by omission (technically true statements that mislead by omitting key facts), spoken lies, and written lies (the performance review is a common example of the latter). Almost invariably, the explanations (rationalizations) relate to avoidance.

Here’s my favorite: In an employment-discrimination lawsuit, one of the employer’s managers admitted to me that he had lied to the employee who was now suing the company. I asked him, “Why did you lie?”

The manager said, “Because I was afraid if I told the truth, we might end up getting sued.”

And look where we ended up.

A BLACK AND WHITE LESSON IN CONSISTENCY
(Get Your Ducks in a Row Before You Act)

In cubicles pressed against each other like sardines, a large group of telemarketers worked the phones. The noise could be deafening.

In adjacent cubicles sat two young men, large men, with thick necks. One was black, the other white. Their voices were loud, so loud they interfered with each other’s calls. What was their solution? Raise their voices, of course.

Frustration built until one said to the other, “Lower your %$&!# voice! I can’t hear a $%#&! thing!”

To which the other man responded, “$%#&! What are you talking about? You have the loudest %$&#! voice in the whole room! Why don’t you lower your $%#&! voice?”

Soon the two men were on their feet, yelling, gesturing, practically foaming at the mouth. Expletives filled the air.

Activity in the room stopped. All eyes were on them.

Finally, one man raised his hands, gestured to the other, and said in a low, hard voice, “Enough of this. Let’s you and I take it outside.”

A coworker stepped between them. Others intervened as well. No punches were thrown.

Following an investigation, management decided to reprimand one of the men and fire the other. The reprimanded employee was white, the terminated employee black.

Following his termination, the ex-employee hired a prominent plaintiff’s attorney and filed a race discrimination claim with the Equal Employment Opportunity Commission (EEOC). The commission scheduled a mediation session to give the parties an early settlement opportunity. It did not start well, however.

“This is an outrageous case of blatant race discrimination!” the employee’s attorney thundered. “Your company should be ashamed of itself!”

The attorney presented his client’s settlement demand: full reinstatement with all lost salary and benefits repaid, plus payment of attorney’s fees and $50,000 “to compensate for my client’s emotional distress. Otherwise, we will be happy to file a lawsuit in federal court where we are confident of being awarded a far greater sum of money.”

Now it was my turn. “I think I understand your position,” I began. “You believe there’s race discrimination because the black employee got fired while the white employee kept his job, and the decision-makers were white. In your view, this inconsistency in treatment can only be explained by racial prejudice.

“However, there’s some information I’d like to share with you that I believe will show something quite different—that what appears inconsistent is actually the opposite.”

I gave the attorney a copy of a company policy that stated, “Acts or threats of violence will subject the offender to termination on a first offense.” I also gave him a copy of the acknowledgment page his client had signed, which stated, “I have reviewed and agree to follow the policies in this handbook.” I then said:

“This explains the difference in disciplinary action. Before a decision was made, the company conducted an investigation. It interviewed the two employees in question as well as eyewitnesses. Based on its investigation, management concluded that both employees were at fault for their disruptive behavior. However, only one person threatened violence. That was your client.

“Also, you should know that there was a prior incident where an employee threatened another with violence and was fired on a first offense. That employee was white.

“So,” I concluded, “for the company to have behaved other than it did would have been inconsistent with both policy and practice.”

The energy on the other side of the table seemed to fade. The attorney requested additional documentation, which I agreed to provide, and the mediation session concluded without an offer of reinstatement or money.

I didn’t hear from the attorney until two weeks before the deadline would run out for filing a lawsuit. “Look,” he said, “my client is willing to waive reinstatement. We asked for $50,000 before but we’ll accept $5,000.”

“I’m sorry,” I said. “The company has made it clear that I’m not authorized to offer any sum of money to settle a claim. It has a practice of not settling claims where it doesn’t think it did wrong.”

Two weeks went by. No filing. Claim over.

MORAL OF THE STORY

In employment-discrimination litigation, often the fight is about consistency versus inconsistency. Plaintiffs use management inconsistency to argue that its stated reasons for its actions are false—a pretext for concealed, unlawful motives.

The inconsistency trap is easy to fall into. All too often, management has avoided dealing with an employee problem for a long time but has now reached the breaking point. Immediate action must be taken. In its haste, management overlooks problematic facts such as positive performance reviews or policy provisions its action will contradict.

Before it acted, management in this case wisely asked the three “ducks in a row” questions:

image Have similar situations arisen?

image What do the documents say?

image Can we show there is no inconsistency?

Answers to these questions pointed clearly to what action needed to be taken. Although there was an apparent inconsistency in treatment of the two employees, closer scrutiny revealed the opposite. Because the company could show how and why its actions were consistent, it escaped an expensive experience in the U.S. judicial system.

BONUS MORAL OF THE STORY

As well as the employer handled the situation, there’s one thing it might have done differently, which probably would have prevented the original claim from having been made. When it let the African American employee go, it said nothing about the disciplinary action it was taking with the white employee. As you can predict, the black employee soon learned that his white coworker had kept his job. This fueled a sense of outrage, which prompted him to seek a plaintiff’s attorney.

Although the company made the right disciplinary decision, I would have recommended explaining the reasons for the difference in treatment at the time of termination. Otherwise, you leave the fired employee to speculate, which, as I explained in “The New Cadillac, the Fur Coat, and the Confidentiality Clause,” is almost always worse than reality.

Instead of firing the employee in summary fashion, I would have shared with him copies of the antiviolence policy and his acknowledgment page. I would have explained the investigative finding based on eyewitness statements and the company practice to terminate on first offense. Without identifying anyone, I would have mentioned the prior incident, including the race of the person who was previously fired. Based on my experience, I’m confident no claim would have been filed. The fired employee would have moved on quietly to find other employment.

But then you’d have missed out on this story.

A TALE OF TWO LAYOFFS

TALE #1: “I Can’t Log In” (How You Fire Can Be More Important Than Whom You Fire)

For 26 years, George worked for the same company. One morning, after parking his car in the employee lot and taking the elevator to his fourth-floor office, George booted up his computer. He attempted to log in, but the user name/password combination didn’t work. He tried twice more without success. As he reached for the telephone to call IT, he noticed his message light was on. The message was from Betty in human resources: “George, please call me as soon as you get in. It’s important.”

He called Betty. She answered and said, “I’ll be right there.”

Betty arrived at George’s office with a broad-shouldered man in a dark suit George had never seen before. Betty introduced them. “This is Bill from security,” she said. “George, I have some bad news. Due to a business downturn, we’ve had to eliminate several positions, including yours. I’m sorry, but today is your last day.”

Betty handed him his final paycheck along with a letter explaining the impact of his termination on his health insurance, retirement, and other benefits. She also handed him a contract and said, “This document is a separation agreement and release of claims. If you decide to sign it, the company will pay you four weeks of severance. You can take it home and decide later.”

Betty explained the reason for Bill’s presence: “He’s here to help you gather your personal things and see you to your car. Again, I’m sorry, George. I wish you the very best of success in the future.” With that, she walked out of his office.

George was too shocked to say anything. After a few minutes of silence, George began looking around his office for personal items. In boxes Bill handed him, George began packing: family photographs, personal books, company mementos, a couple of plants, and his Chicago Cubs coffee mug.

With Bill looking on to make sure no company property was included, George soon had his things boxed up and ready to go. Bill carried one box while George carried the other. After walking down a hallway, they had to cross an open area where other employees were present. George saw several colleagues, but they didn’t make eye contact. Nobody said anything. There were tears in George’s eyes.

After helping George put the boxes in his car, Bill said, “Nice to meet you. Goodbye.”

“Goodbye,” replied George, as he started his car. On the drive home, he thought, “Why did I say ‘Goodbye?’ I should have said, ‘Go to hell!’”

Neither George nor his wife were impressed with the company’s four weeks’ severance offer. He told her, “That’s all they offer me after 26 years of service? I’m 54 years old, we still have a kid in college and a mortgage!” George didn’t say aloud the fact that his wife had health problems, although this was very much on their minds.

Shock and dismay turned to anger, “They wouldn’t even let me say goodbye. Instead they walked me out of there in front of coworkers like some kind of criminal! And they let me know I’ve been fired by locking me out of my computer!”

George’s cousin, a tax attorney, referred him to a lawyer who specialized in representing employees. After the attorney’s attempts to negotiate a better severance package for George were unavailing, George filed a lawsuit in federal court alleging age discrimination.

After two years of litigation, the case went to trial. The jury was sympathetic to George and offended by the manner in which management let him go. Also, George’s attorney was able to introduce evidence of inconsistencies, with younger employees in his department keeping their jobs despite fewer years of service and less-favorable performance evaluations.

The jury awarded George $1.6 million in damages. The company appealed. After another year of wrangling in the legal system, the parties reached a settlement. The company ended up paying $850,000 to settle George’s claims. By then, it had spent nearly $300,000 in litigation costs and attorneys’ fees.

TALE #2: Too Much Information Is Better Than Not Enough (Sharing Bad News Can Produce Good Results)

We sat around my client’s conference room table: five members of the company’s executive team and me. I’d been asked to do a risk assessment of a RIF they intended to conduct.

The company had purchased a large tract of land near St. Louis and had begun construction of a distribution center. Once the St. Louis facility was operational, the company intended to close its existing facility outside of Atlanta. Only a few Atlanta employees would be offered relocation packages. The rest, 460 employees, would be let go.

In addition to legal compliance issues, topics of discussion included what the company should say to the Atlanta employees about the impending change.

“Nothing,” said one executive. “Not until we tell them that their employment has been terminated.”

Another executive said, “We need them to perform right up until St. Louis goes operational. Otherwise, we’re going to have big customer headaches.”

They turned to me, “Jathan, what do you advise?”

“Well,” I said. “I’ve had experiences where employees were told well in advance of their termination date and didn’t behave badly. I’ve also had experiences where the company’s attempt to keep things secret backfired. Leaked information combined with negative rumors and speculation created a toxic work environment.

“I think if you’re upfront with the Atlanta employees about what you’re doing and why, and how they fit into the plan, it will work better than playing your cards close to the chest. With the severance you’re willing to pay based on their continuing to work up to a release date you set, I think you’ll get the performance you need.”

An energetic discussion ensued. Eventually the executive team agreed to follow the approach I outlined, although after the meeting, one executive pulled me aside and said, “This damn well better work!”

We put together a game plan that included management holding a series of meetings to explain to employees what the company was doing, why, and how it would impact them. The company conveyed additional information through its intranet and via periodic emails from the CEO. Employees were encouraged to ask questions. If management didn’t yet have answers, it promised to respond as soon as it could.

Not surprisingly, many Atlanta employees were unhappy about the change. “Why St. Louis?” “What’s wrong with keeping things the way they are?” Some employees were upset that a few were offered relocation packages while most were not, prompting some “Why not me?” questions.

Management didn’t duck any questions and patiently explained its reasons. When disagreement continued, it acknowledged a legitimate difference of opinion. “We’re trying to use our best business judgment to keep our company competitive. You may not agree, and there may be better ways to do things. But these are decisions we felt we had to make, and we wanted to share them with you in advance so that you at least understood what we were doing and why, and had time to plan.”

Ultimately, 460 employees lost their jobs. That’s 460 potential lawsuits to defend. However, it didn’t work out that way. Not even close. Following the plant closure, there were no lawsuits. There wasn’t even a single attorney demand letter.

Instead, employees reliably performed their jobs until their release dates. They signed the separation agreements, accepted the severance pay, and moved on. Productivity did not suffer.

A facility manager shared a story that sums things up:

“I got a call from a customer. He said, ‘I want to tell you how impressed I was by one of your employees. We had a problem with a shipment, and he jumped on it, fixed the problem, made sure we were satisfied, and remained cooperative and friendly throughout.

“‘I complimented him on his excellent service and attitude. He said he appreciated the compliment, especially since he would be out of a job in a month and could use the encouragement. I was shocked, and then amazed we received such great service from somebody who knew he was about to lose his job!’”

MORAL OF THE STORY

These two stories illustrate the difference in philosophy and approach employers commonly take in handling layoffs and RIFs. Unfortunately, the first story is more typical. The employer takes an almost adversarial approach, showing little or no trust in employees, sharing as little information as possible and as late as possible, and acting essentially without regard for the impact on employees, including their dignity.

By contrast, and as shown in the second story, being upfront in sharing sensitive, difficult information tends to send a message of trust and respect. It upholds employee dignity, which often distinguishes workplace layoffs that go well from those that don’t. In my career, I’ve dealt with numerous layoffs, RIFs, and other downsizings. In reflecting on the ones that went smoothly, it strikes me that it was not so much a question of who got laid off or what the business justifications were. Rather, it was the manner in which departing employees were treated.

If you’ve ever been unfortunate enough to be caught up in a job reduction, you probably understand. When faced with the hardship, dislocation, and anxiety of losing your job, the last thing you need is to have the blow accompanied by negation of your dignity or self-worth.

Edgar Allan Poe captured this sentiment 170 years ago with the opening to his story “The Cask of Amontillado”: “The thousand injuries of Fortunado I had borne as I best could. But when he ventured upon insult, I vowed revenge.”

Taking away someone’s job is inflicting an injury; don’t add insult.

CONVERTING HUMAN RESOURCES FROM COP TO COACH (How to Combine the Business Case with Employee Risk Analysis)

Following a workshop I conducted, the company’s human resources director, Mary, invited me to sit in on a meeting she had scheduled with a senior executive, Morton. He wanted to fire a long-time employee in his department, Jerry, and sought Mary’s backing.

For years, Jerry had underperformed, alienating coworkers, disappointing and even offending customers. Morton explained that he’d given Jerry extra coaching and counseling, had tried performance improvement plans, and had even switched Jerry to different supervisors. However, no sustained positive change had occurred.

The executive explained that there was a new and real urgency: Technological and market changes had created industry upheaval. Morton cited his boss, the company’s CEO, who had recently said, “We can no longer afford to tolerate dead wood.”

Morton said, “It doesn’t get much deader than Jerry.”

Moreover, Morton explained, a competitor had been raiding employees in his department and had succeeded in recruiting away two of his best. “Nobody wants to work with Jerry, which makes us vulnerable to our competitor’s raids,” Morton said. “We simply can’t afford to carry this guy any longer. We’ve got to get him out of here!”

Mary spoke for the first time. “What is your documentation?” she asked.

Not surprisingly, the documents weren’t very helpful.

“But what about the performance improvement plans?” Morton asked defensively.

“They’re not current,” Mary replied. “Besides, technically speaking, they were complied with.”

“Yeah, but in his last performance review, his supervisor checked ‘needs improvement’ in several places,” Morton said.

“Checking ‘needs improvement’ on a performance review is not the same as a performance improvement plan, and it doesn’t constitute clear disciplinary notice that an employee faces termination of employment.”

“I recently told Jerry that he needed to look for another job.”

“You may have told him that, but that’s not the same as supportive documentation.”

Things were getting tense when Mary turned to me and said, “Jathan, do you have anything to say?”

“I like to start by making sure I understand the business case,” I said. I turned to Morton and attempted to summarize the problem from his perspective: the long, frustrating years of employing Jerry, the failed attempts at improvement, the heightened sense of urgency due to industry upheaval, and the fresh crisis caused by a competitor’s talent raids.

After Morton confirmed that I’d accurately summarized the situation, I said:

“Now, let’s examine your desired action through a risk analysis checklist. There are four prongs:

image Would the termination be substantively fair?

image Would it be procedurally fair?

image Would it be consistent?

image Are there any complicating factors?

“As for the first prong, I’d say you’ve made a strong case that it would be substantively fair to let Jerry go. It’s not a personality conflict or a manager’s vendetta. You’ve given him repeated opportunities to improve, but he remains unwilling or unable to close the gap.

“The next item is procedural fairness. Has adequate notice been given so that firing Jerry won’t be a surprise? From my experience, I can say that employees will surprise you with how surprised they are when the hammer finally comes down. From the manager’s perspective, they should have seen it coming from miles away. But not from the employee’s perspective.

“Also, you’ll be surprised at how your good employees, the ones you want to keep, will identify with an underperforming employee if they feel he wasn’t given fair notice before being fired. They’ll think, ‘Maybe that’ll happen to me some day,’ which is not helpful for employee engagement or talent retention.

“To avoid such surprise, clear advance oral and written notice should be given. Unfortunately, Morton, I see real problems with this prong of the checklist. But let’s continue.

“The next question is whether firing Jerry would be consistent with company policy, procedure, and practice. Consistency isn’t just about protecting the company against workplace claims. It’s about supporting a culture where employees feel they will be treated fairly. When management bypasses its own policies or procedures because a particular situation strikes it as compelling, it often pays a price in creating the sense that leadership can’t be trusted. Obviously, that’s also not a good thing for employee engagement or talent retention.

“I’ve got concerns on the consistency prong as well. Firing Jerry now would appear inconsistent with the disciplinary procedure stated in the handbook as well as past disciplinary practice.”

“Finally,” I said, “in terms of potential complicating factors, there’s the legal risk. In this case, Jerry is well over 40, and I understand he could be replaced by someone well under that age. That fact, plus the problems with checklist items (2) and (3) could easily result in a painfully expensive litigation experience.”

The room was silent.

I said, “Clients often find it helpful to analyze legal risk in relation to business costs and benefits. I use an equation, V=LM, where the Value of a contemplated action is determined by assessing the Likelihood of its occurring multiplied by its Magnitude. For example, think of comparing a 50 percent risk of losing $10 ($5 in present value) versus a 30 percent risk of losing $100 ($30 in present value).

“This approach leads to creating multiple options and weighing them against each other. I like to start by identifying options on each end of the risk spectrum and then looking at something in between.

“In this case, the high-risk option would be to fire Jerry now. That would cut off the business cost of continuing to employ him. However, it would maximize legal risk—the Likelihood that Jerry would sue and collect a high Magnitude of money.

“The low-risk option would be to continue tolerating Jerry as best you can. That essentially eliminates the legal risk (LxM=0), but for the reasons you described, it would come at a high business cost, including the risk of further talent loss or your CEO becoming very unhappy with you.

“A risk option in between might involve bringing Jerry to the edge of discharge while leaving yourself some wiggle room. For example, you could lay out in detail why it’s in his best interest to leave the company. And perhaps incentivize him with a severance/release offer. That approach has some legal risk but also creates a decent chance of getting Jerry out of the company sooner versus later, and without legal or other trouble.”

At that point, Morton and Mary agreed to meet the following morning and develop a game plan.

A few months later, Mary called me. She said:

“We agreed on a middle option. Together, we created one of the most comprehensive performance improvement plans I’ve ever seen. We met with Jerry and walked him through his entire employment history, pointing out the many failures and failed attempts to make things work. We told him we were at a crossroads; the company could no longer tolerate the status quo. It therefore seemed to us that the best thing would be for Jerry to find other employment. If he agreed, we’d be willing to provide some severance benefits to help with his transition. Otherwise, if he wanted a last-chance opportunity, we’d need to see his proposed corrective action plan.

“We also said it was an either/or proposition—either he could elect severance or he could attempt a last-chance correction plan. If he chose the latter and was subsequently terminated, there would be no severance.

“Jerry went home, came back in the morning, took the severance offer, signed a release, and quietly and cooperatively left the company.”

“That’s great,” I said.

“I agree,” Mary said. “But you know what’s probably the best thing?”

“What?”

“It’s how I’ve interacted with Morton and the managers in his department since our meeting. They now let me know much sooner about employee relations issues. Early knowledge gives HR a lot more flexibility. Also, it’s no longer a tug-of-war between HR and management; instead, we collaborate on finding jointly acceptable solutions.”

MORAL OF THE STORY

I’ve met many managers who don’t have a high opinion of human resources, and many human resources professionals who don’t have a high opinion of management. The complaints sound familiar. From management, it’s, “They don’t understand our business!” “They slow everything down and overcomplicate things!” “They’re the Department of ‘No’!”

From human resources, it’s, “They don’t know how to communicate!” “They keep things from us, wait until the last minute, then they’re in panic mode and want immediate action!” “Their documentation stinks, and they blame us!”

However, I’ve also met many managers who say human resources helps them be more effective in their jobs (and I would consider myself one of these managers). And I’ve met many human resources professionals who experience a great deal of satisfaction interacting with management.

What distinguishes the collaboration camp from the guerilla warfare camp? This story provides a good illustration. Notice the elements. Morton had a long-time festering employee problem in his department yet never brought it to Mary’s attention. He waited until he was in crisis mode with pressure from the CEO to cut costs and anxiety about losing good employees to competitors. Morton wanted immediate action from human resources to relieve his pain.

Mary responded from a strictly human resources perspective. Her first question centered on documentation and what she suspected would fall well short of acceptable. Things went downhill from there. The meeting easily could have ended with each of them renewing their respective memberships in the “I hate human resources!” and the “I hate management!” clubs.

What did I do differently? First, I didn’t abandon the human resources role. I simply began by making sure I understood the business case from Morton’s perspective. Readers of “If You Want Engagement, Lead by Listening” will observe the EAR method in action.

Second, I resisted the temptation to jump to a conclusion. Instead, I put the issue of Jerry’s termination in a risk analysis context using the checklist.

Third, instead of saying “Here’s the answer,” I presented options, from high risk to low risk, and explored a risk option in between. This approach allowed Morton to participate in finding a solution that would work for his department and human resources.

Most human resources professionals prefer being coaches to cops yet often feel stuck in the latter role. But this doesn’t have to be. If you’re a human resources professional, I would encourage you to adopt the approach used in this story, an approach that Mary and many other human resources professionals have made a regular practice. If you’re a manager and would like to have a better relationship with your human resources people, I suggest you share this story with them and invite a conversation about it. I predict you’ll be pleased with the reaction.

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