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Handling Separations Gracefully

30 Mins


By Team Artha

Hiring a problem employee is bad. Not firing him is worse.

Paul Spiegelman, Chief Culture Officer, Stericycle

At every startup I have seen – some very closely and some from a distance – the challenges in dealing with separations were a common theme. At early-stage startups, most entrepreneurs, with a few exceptions, did not really have the know-how for dealing with separations. Nor did they understand that the way a startup deals with separations impacts the morale & motivation of existing employees, as well as the ability to attract talent. The problem with startups that were scaling rapidly was that the skill and know-how for handling separations existed in small pockets, but like every other process, the dissemination of this know-how and consistency in implementation across the organization was poor. Processes in general, and processes that involve dealing with sensitive and difficult issues, do not take root easily.

Here are some of the most common questions and situations:

  1. One of my direct reports is not performing well. When I provide feedback, I see some improvement, but as soon as I take my eyes off, she seems to regress.

This is something you need to be careful about. Individuals who stand out as underperformers are relatively easy to spot and deal with. It is those who are on the cusp that are the problem because you are never sure if they will shape up eventually or will forever continue to be a drag. And you tend to be so occupied that you don’t even get to see the damage they are causing. There is one simple tip that always works, and like anything that always works, it is not easy to practice – don’t take your eyes off such individuals, especially if they report to you or are in key roles even two levels below you. Keep them on your radar till you decide on them one way or the other. In my experience, a lot of those on the cusp do not eventually work out, with the exception of a few. Every time you see some improvement after feedback, you hope that the change is for good, but a little later, you are again faced with the same issue. This slows you down, takes away your personal time and creates frustration. So, you need to make quick calls in such cases. Take your eyes off an individual only if you believe that she is completely in autopilot mode both in terms of performance and work ethic.

  1. Do performance improvement plans (PIP) really work? If I put someone on a PIP, I end up reviewing and supporting this person at regular intervals, so there is no way this person would fail. And, psychologically, since I am providing support during this period, won’t I perceive improvement?

Let’s think about it, what is the purpose of a PIP? It is a process that organizations have put together to ensure fairness and prevent cowboy-style managers from perpetuating a hire & fire culture. I have seen several situations where a manager does not communicate expectations clearly and does not take the time to review and provide feedback. As a result, there is a perception of underperformance. Initiating a separation based on such perceptions, without the manager doing her part well, sets off a culture of hiring and firing.

So, when a PIP is underway, you do not have to provide more support than you would otherwise. Treat a PIP as a test condition where you have taken care to clearly define expectations and are observing the individual closely. If your feedback and review mechanisms are perfect, then the need for a formal PIP is minimal. I have seen some seasoned managers pulling off separations without a PIP just because, at every stage, they did what they were supposed to do – setting expectations clearly, periodically reviewing these and providing candid feedback.

  1. This team member of mine comes across as a good performer. I have seen her generally do the right things. But there is some noise and murmur I keep hearing from her direct reports, some of it coming to me directly but more often coming in bits and pieces from others. Whenever I have asked her, she has told me that the murmurs are because she has been piling on the pressure on them, and since they are uncomfortable with that, they are just venting. What do I do?

This is a tricky one. Strong managers who make things happen and execute well in a startup context tend to break a few eggs along the way. One way to figure out whether the murmurs are valid or not is by doing a few checks. Is the manager executing well and delivering results? Are the murmurs originating from those that are unable to cope? If the answers to these questions are ‘yes’, discount the murmurs, but speak to the manager and help her round off the sharp edges that are creating these murmurs. If the murmur is from everyone, especially from those you know for sure have a track record of performance and working well in teams, then dig a little deeper. Get more feedback. Get a 360 feedback done if needed.

  1. If I tell a person that things are not working out, she may not accept it meekly and walk away. She may send me a legal notice of unfairness or discrimination. I am worried about this, so what should I do?

This may happen. The person you are planning to let go off may not agree with your assessment and may not leave without a fight. It may even get nasty. You may even be accused of discrimination, and proving or disproving this may not be easy because a startup neither has the process maturity nor the penchant for maintaining the right documentation that can stand scrutiny. You might even be forced to reach an amicable and expensive settlement. Especially if you are in the midst of a fund-raise, an accusation of discrimination can scare off investors, who would tend to conclude that there can be no smoke without a fire. The lesson in this is that separation needs to be seen as a culmination of a continuous process of feedback. Feedback that is candid, timely, accurate, and supported by multiple stakeholder input, especially if you suspect that the individual is going to be difficult, will help. Feedback that you suspect is likely to end in separation needs to always be written. Verbal feedback and corridor conversations count for nothing. Eventually, it will boil down to, “he said-she said”, kind of discussion where your credibility would be at serious stake. Never get personal in your feedback. This invariably creates acrimony, escalates tensions, and distracts from the issue. Continuous and consistent feedback, delivered without getting personal, generally creates awareness except in the rarest of rare cases. It prepares an individual for what is coming. Quite often, the individual herself would recognize this and begin to look out on her own.

  1. “I am getting a lot of questions on XYZ’s exit. Can we know the reasons?” or a senior manager might come up and inquire about a colleague’s separation saying, “I am not keen to know the reason, but my team members are asking me questions. What do I say?”

Set the basic behavior expectations right with seniors. They cannot be allowed to palm off their personal curiosity as questions from their team. Read them the riot act on how to contain curiosity about other people’s compensation, reasons for other people’s separations etc. Handle the question in a way they learn the futility of gaining such knowledge. Handle the question in a way that they will not come back with a similar question in the future. Handle the question in a way that they can handle it when others reach out to them. Every human being is a political animal. Political behavior can be nipped in the bud or encouraged. Encourage leadership traits that nip politically motivated conversations and rumors in the bud.

  1. “We are letting the person go on performance grounds. Shouldn’t we let people in the company know about that, either very explicitly or maybe subtly? If we don’t do that, everyone would assume that she is leaving for better opportunities and that she was unhappy with the organization on some count. It would also allow her to control the messaging by saying that she is leaving for better opportunities and maybe even bad mouth the organization?”

Most separations on performance grounds have very little structured documentation. HR folks might say performance improvement plans exist, but the reality is that at the end of the day, the individual under question is asked to resign. So, technically it is voluntary. Performance is, after all, in a context. Someone who is a failure in one context could be a success in a different context. There is no need to brand someone as a failure and let the world know. The separating individual can slap a legal notice on the organization for damaging her reputation. You can’t control what she tells the rest of the world. You can’t control a lot of what anyone chooses to do. If it is a very senior executive, a release agreement would anyway have the detailed terms including a clause that restricts both parties from bad-mouthing or defaming the other. And do we want to tell everyone that the person was let go on performance grounds because we don’t want people to conclude that there is something wrong with the organization!? Don’t underestimate the judgment of people. They will know whether the organization is a great place to work or not, irrespective of the odd exit. Don’t underestimate the power of grapevine. They will, in all likelihood, know the reasons for exit. They have all learnt to decipher and decode official statements. So, don’t fret.

  1. We are letting XYZ go on the grounds of integrity. Shouldn’t we tell the organization, if not by mail, then at least verbally, so that it sets an example and acts as a deterrent for others?

No, you do not need the shoulders of those who have demonstrated poor integrity to drive high standards of integrity. That’s the sign of a weak organization. The organization could also end up in some legal trouble if it tries to take such shortcuts by making examples of individuals and damages their reputation in the process. To support your efforts, the grapevine is always there to carry such messages. Where the grapevine is carrying messages you don’t want it to, intervene, counter and clarify. Where the grapevine is carrying messages you want it to, stay silent. As we said in one of the other responses, do not underestimate the judgment of people and their ability to understand what’s really going on!

  1. A lot of managers don’t seem to know how to handle an exit amicably. They stop treating them with respect, stop acknowledging they exist or even cut out their participation in activities.

If you suspect that there is more harm in allowing a person in transit to stay and help with the transition, have a quick and clinical separation, but having decided to have a person stay and help with the transition, don’t treat her as a person-non-grata. How you treat a separating employee has a huge impact on what the others think of you and what they can expect when they move. Treating separating employees with dignity by acknowledging their right to separate without unnecessary discussion on their perceived opinions about the organization is a critical component of a good culture. Some organizations have a terrible reputation when it comes to dealing with separating employees, and such organizations generally have low employee morale, and good people are reluctant to join them. Separated employees are some of your best brand ambassadors.

  1. One manager asked me once: “I had put this team member of mine on a performance improvement plan (PIP) for two months. Now at the end of two months, I’ve figured out that this isn’t working. So, I am asking her to leave. Why do I have to serve notice or pay salary in lieu of notice because I had already served a two-month notice via a PIP?”

Sorry, you had not served notice when you put her on a PIP. If you were sincere about the PIP, you wanted her to put in her best and show improvement. Did you expect her to start looking for a job when you put her on a PIP!! So, the notice period starts the day you make the call to let her go!

  1. One manager asked, “I had told this team member of mine around four months back that we are restructuring and her role may not exist. The restructuring plan has now taken shape and I am asking her to go. Do I really need to serve notice or pay her in lieu of notice?”

Discussions on separation need to have an air of seriousness. They cannot be corridor conversations quoted later on that can result in “she told-he told” situations. They need to be documented. What was the need to have this casual discussion on restructuring four months before it took concrete shape? The notice period starts only after a firm and definitive communication to part ways!

  1. I have encountered situations where a manager comes up and says, “I haven’t documented any feedback, but this person isn’t performing, so how do I ask this person to leave?” We have also encountered situations where a separated employee had escalated, and on enquiring, the manager said that feedback had been provided and, upon checking, found that no feedback had been provided.

Encourage every performance discussion to be documented in the form of a short mail. Write down the gist of the feedback, actions agreed, and timelines. You don’t need more than 10 minutes to do this. This does not mean that you won’t provide spontaneous or verbal feedback. You will do this, but document every formal performance feedback, especially if there is a performance issue. An exit discussion is far easier to handle if it is a culmination of appropriate feedback. You don’t necessarily need to make the whole process bureaucratic.

  1. A team member has resigned, and the notice period as per the employment agreement is two months. She insists on leaving within a month. What should I do?

The employment agreement has a clause on the notice period so that the employee can do a smooth transition, with defined penalties for breach. It may or may not be possible to identify a replacement (internal or external) within this notice period, but it helps mitigate the disruption created by the separation. If you have a replacement available in, say, ten days and don’t need more than 15 days for a transition, then you don’t have to worry. You can let her leave and waive off the shortfall in the notice period. If you need her to serve the full two months because you don’t have an internal candidate (or need two months even with the internal candidate for an effective transition), they insist on the two months’ notice. Explain to her the consequences of doing a shoddy transition. She may or may not agree and may still insist on leaving in 30 days. Beyond recovering the shortfall in notice through the full and final settlement and mentioning the fact in her relieving letter, you do not have an option.

Some companies insist on a separating employee serving the full notice to make life difficult for a competitor she may be joining, but this is not a prudent long term policy.

In addition, notice periods should be linked to the time it takes to find a replacement and do a transition. Therefore, it should be linked to the level. It can be longer at senior levels and shorter at more junior levels.

Not many managers realize that the way they handle exits determines how the people who stay look at them and the organization. Most managers look at exits as a necessary evil that they should somehow get over. On the contrary, they are great opportunities for sending the right messages across teams if they are handled with finesse and clarity.

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Team Artha