Timing

Steven Cesare, Ph.D.

A business owner from Missouri called me the other day looking for guidance about how to handle one of his Field Managers. The Manager has been employed with the company for several years, performing well for the most part; until recently. Over the past several months, the Manager has lacked operational detail, received several written reprimands, and exhibited poor role modeling to staff. The honorable business owner repeatedly coached the Manager, trying to get him to regain his will, desire, and achievement.

To no avail.

Consequently, in December, the owner finally got to the point where the ultimate decision had to be made.

Accordingly, the business owner called me to discuss possible dismissal options for the Manager. At first blush, the owner wanted to terminate the Manager. On that point, he and I agreed. But then, upon extended dialogue, it was revealed that the Manager, earning an annual salary of $85,000, was due to receive a $50,000 performance bonus based solely on his department’s overall year-end metrics; metrics that would be finalized in early January once the company’s fiscal year-end process was to be completed.

Flashing red lights for Steve. Everywhere.

I have heard too many compelling and costly stories from lawyers, governmental officials, and human resources professionals of how companies had “coincidentally” decided to terminate an employee just ahead of some timely beneficial milestone was to come due to the employee, like firing an employee: before a bonus payment or sales commission was imminently scheduled to be distributed, right before 401(k) vesting was supposed to occur, or in advance of receiving a costly benefits package or perquisite.

Given that retaliation has been the number one employee lawsuit against companies for more than a decade, I swiftly dissuaded the owner to forego that option. I wholeheartedly understand the owner’s aversion to giving a significant bonus to an erstwhile failing Manager. Yet, the $50,000 bonus would have been a drop in the proverbial bucket to the owner, compared to the likely lawsuit settlement his company would assuredly have to make to the Manager-turned-victim, in response to the jury’s predicable verdict.

As a capitalist, despite the costs involved, I told the owner I would terminate the Manager, pay the bonus, and move forward supporting his company culture’s commitment to merit, accountability, and business ethics. A tough pill to swallow for many business owners. However, be reminded, the Manager was in charge of his department that exceeded performance expectations necessitating the agreed-upon bonus.

Lamentably, as stated previously, the business owner had issued multiple written reprimands to the Manager several months earlier, though did not terminate the Manager hoping, like almost all business owners often do, the Manager would miraculously return to his previous level of success. Now with the passage of time, those reprimands had been rendered moot. That moment for a timely dismissal elapsed.

Proceeding with that line of reasoning, I suggested the business owner terminate the Manager, pay the deserved bonus to him, and offer a severance package to the Manager to leave the company on mutually-amicable terms. In my opinion, I would rather pay a former employee one-two months of salary to leave the organization, rather than pay a current employee an ongoing salary to underperform, representing daily regret to a business owner of a decision that should have been made at a more strategically adept time.

Upon learning of the legal details of separation packages (e.g., 21-day review period, 7-day revocation timeframe, compensation payout), the business owner reflected contemplatively on its viability, juxtaposed against other potential options (e.g., layoff, demotion, position redefinition) that we discussed at length.

While the issue of lax timeliness by not dismissing the Manager earlier in the year was unfortunate, I am relieved the owner did not terminate the Manager right before his timely year-end bonus was due to him.

Bottom line: Do the right thing, at the right time. Every time.

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