FOT Nation – today we've got a point/counterpoint related to whether you should automatically pay severance to anyone you fire. Check out the posts from Steve Boese and Kris Dunn, they're riffing off a quote from Jonathan Kaplan (founder and chief executive of Pure Digital, the company that made the wildly successful Flip camcorders) related to how he dealt with the ‘bad hire’:
“If you hire someone bad, fire them immediately and give them a big severance package so they feel good about you. We gave our workers four to six months’ severance, even if they’d worked only four months. You might think that’s crazy. But it was our mistake to hire that person. And it’s not that much money, really.”
Steve says, "Pay Up, My Friend"….
KD says, "Formal Severance Policies Are For Suckers"…
What say you?
I think that there are really excellent points on both sides, and ultimately there should be a middle ground between the extremes. Definitely there needs to be responsibility placed on those placed in the stream of the hiring process, but when it goes south I don’t believe there is anything wrong with compensating those that have been let go.
Agree with Kris-severance is a tool to be used on a case by case basis. Agree with Steve, if a bad hire is the company’s fault, some severance is probably appropriate.
I recommend severance when 1) there is a risk of litigation that can be resolved with severance in exchange for release; and 2) when service and contribution merit it (still get a release).
Automatic or formal severance is usually throwing good money after bad.
Great set of articles to make one think and question their practices. I’m finding myself falling on the side of ‘pay up my friend’. But I’m thinking on the recruiting potential – think about it, word gets out that you can try out a company, and be paid generously if it doesn’t work out. Suddenly that company is looking like a great place to work. KD’s points are valid about passing the buck on accountability – but I’d argue no HR person in their right mind would propose this without having the hiring process and accountability worked out.
Our company doesn’t have this severance policy. But now I’m seriously thinking about how I could make this work.
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Thanks all for the comments and points of view. Especially the enlightening take on cycling saddles. Well done.
Of course I agree with this idea about giving severance vimax after making decision to fire the employee.
100% agree with your opinion