The first part of this article addressed a CEO’s thought process in deciding (often reluctantly) to terminate a long time employee who has contributed to the company’s success to date but doesn’t good enough to help the company get to the next level.
Now that the decision has been made, executing it deftly and sensitively becomes the priority. A challenging decision revolves around the actual departure date. Some companies require the person being terminated to leave immediately – turning in keys, credit cards, computers, etc. and being escorted out of the building! This is harsh and embarrassing for all. However, it may be necessary due to the sensitivity of the information and content available to him or her. Other organizations allow a longer transition time of a few weeks or a month. This is entirely dependent on the nature of the business; the individual’s attitude toward the company and his or her access to proprietary information.
The termination should be done both verbally and in writing. The letter should include the effective date of the termination; the reason for the termination; property to be returned to the employer (including repayment of loans); details regarding the final paycheck, severance pay, vacation pay, etc.; and health and welfare benefit coverage and COBRA continuation alternatives. Be sure to check with legal counsel regarding additional information needed relative to employment agreements that contain confidentiality agreements or non-compete agreements.
Cultural Impact
You should expect that some employees will have a very negative reaction to such a termination. They will think that you are unappreciative of the efforts and sacrifices that the employees made during the lean years. And to a certain degree, they are right. Unfortunately, they are not in a position to see the bigger picture of where the company is going and the caliber of people needed to get it there. Still others will think that the company is becoming too political or too bureaucratic. It will reinforce some employees’ anxiety that they are next in line to be let go.
The best way to mitigate negative morale is to use this opportunity is to reassure the survivors. Companies consist of people, all of whom have (right and wrong) expectations about their employer. Consider scheduling one-on-one meetings to communicate each person’s value to the organization. Use these meetings to discuss performance expectations and how you plan to balance them with a supportive work environment that doesn’t punish failure, for example well intended innovation that proves unsuccessful.
This may be a good time to consider career building opportunities for the remaining staff – demonstrating that you are investing in their future can go a long way to improve morale. Keep in mind that rebuilding trust doesn’t happen overnight. Allow time for your staff to adapt to the change. Time—and the company’s growth and success—will have a healing effect. And you will have taken an important step toward strengthening your management team and affirming the high performance expectations you have for the entire company.
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Contact Ann at ann.oconnell@newportboardgroup.com
