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Colorful cautionary tales from a man who spent decades keeping companies out of court.
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Ignoring management problems won’t make them go away—in fact, it usually only makes them scarier. In his new book, Hard-Won Wisdom: True Stories from the Management Trenches (Amacom, 2016), attorney, blogger and consultant Jathan Janove shares colorful stories—and the sometimes painful lessons he learned—from his 25 years of working to help keep employers out of court. Enjoy these excerpts adapted from the book, which will be available for sale in November.
A company needed to hire a CFO. Following a nationwide search, it hired Ralph, who held an MBA from Harvard. Terms were negotiated, a contract was signed, and Ralph started the job.
Soon afterward, he participated in his first executive committee meeting, during which he made a comment that bothered the CEO, Jordan. Although he said nothing at the time, Jordan sent Ralph an e-mail later that morning.To: RalphFrom: JordanSubject: Today's Executive Committee MeetingSent: October 14, 10:14 a.m.I was disappointed with your comments in today's meeting about our expansion plan. I'm not sure you fully understand what we're trying to accomplish.Send.
Audio Interview: Jathan Janove
Listen to author Jathan Janove share one more true tale with
HR Magazine editor Christina Folz.
Ralph responded with a message of his own:To: JordanFrom: RalphSubject: Re: Today's Executive Committee MeetingSent: October 14, 10:39 a.m.You are mistaken, Jordan. I fully understand the company's objectives. However, I was hired to ensure that they are pursued within a framework of sound business practices and with a view to protecting the company's assets and preserving shareholder value. I'm simply doing my job.Send.
Jordan stewed for a while, then composed the following e-mail:
To: JordanFrom: RalphSubject: Re: Today's Executive Committee MeetingSent: October 14, 11:49 a.m.
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!
Given the heated tone of Jordan's message, Ralph decided it was best not to reply.
The two men went on with business as usual—until another disagreement touched off a new round of tit-for-tat e-mails. Jordan ended that exchange with the following message:
To: RalphFrom: Jordan Subject: Moving On!Sent: October 31, 2:43 p.m.
It has become increasingly clear to me that the company 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.
After Ralph received this message, he didn't click "Reply." Instead, he hit "Forward"—and sent the e-mail to his attorney.
Acrimonious negotiations ensued. Ralph alleged breach of contract and made whistle-blower claims. Eventually, a deal was cut. It wasn't cheap.
You might think Jordan chose e-mail to communicate due to some geographic separation between him and Ralph. Perhaps the executives worked in different cities or at least different buildings. Wrong! Jordan and Ralph were separated by only four office doors.
Teaching from the Trench
Few of us enjoy face-to-face conversations on difficult subjects. E-mail seems like a less stressful way to convey tough messages.
Yet it’s a big mistake to inform an employee of problematic behavior without speaking to him first. Your lack of directness may be perceived as disrespect, and 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, stewing over perceived slights.
Avoid "dissing" employees and instead "DIS" them—that is, be direct, immediate and specific. E-mail doesn’t satisfy the "direct" test. Nor does a text, letter, memo or voice mail. A real-time, face-to-face exchange is the least comfortable option for sure but by far the most effective.
That said, e-mail does have an important role in workplace communication—as a vehicle for an after-the-fact summary of key points discussed in person.
A company’s HR director, Mary, invited me to sit in on a meeting with a senior executive, Morton, who wanted to fire a longtime employee in his department, Jerry, and sought Mary’s backing.
For years, Jerry had underperformed, alienating co-workers and disappointing customers. Morton explained that he had given Jerry extra coaching, had tried performance improvement plans and had even switched Jerry to alternate supervisors. However, no sustained positive change had occurred.
He explained that there was a new urgency—technological and market changes had created industry upheaval, and the company’s CEO had declared he could no longer tolerate deadwood.
"It doesn’t get much deader than Jerry," Morton said.
Mary spoke for the first time: "What documentation do you have?"
Not surprisingly, the documents weren’t very helpful—and Mary let Morton know that.
"But what about all the performance improvement plans we’ve put him on?" 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.
"That doesn’t constitute clear disciplinary notice that an employee faces termination," Mary responded.
Things were getting tense. Mary turned to me. "Jathan, do you have anything to say?"
I wanted to make sure I understood the business case, so I attempted to summarize the problem from Morton’s perspective—the long, frustrating years of employing Jerry; the failed attempts at improvement; the heightened sense of urgency.
After Morton confirmed that I’d accurately assessed the situation, I said, "Now, let’s examine your desired action through a risk-analysis checklist. There are four questions to address:
1. Would the termination be substantively fair?
2. Would it be procedurally fair?
3. Would it be consistent?
4. Are there any complicating factors?"
I told Morton he had 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," I said. "You’ve given him repeated opportunities to improve, but he remains unwilling or unable to close the gap."
Next, I turned to procedural fairness. "Has adequate notice been given so that firing Jerry won’t be a surprise?" I asked. "Unfortunately, Morton, I see real problems with this part of the checklist."
I was also dubious that firing Jerry would be consistent with the disciplinary procedure listed in the company’s handbook. "Consistency isn’t just about protecting the company against workplace claims," I said. "It’s about supporting a culture where employees feel they will be treated fairly. When management bypasses its own policies, it often creates the sense that leadership can’t be trusted."
Finally, there was the legal risk. "In this case, Jerry is well over 40, and he could be replaced by someone younger," I pointed out.
The room was silent.
I explained that clients often find it helpful to analyze legal risk in relation to business costs and benefits. I use the equation V = LM, where the value (V) of a contemplated action is determined by assessing the likelihood (L) of it occurring multiplied by its magnitude (M). For example, think of comparing a 50 percent risk of losing $10 vs. a 30 percent risk of losing $100.
"This approach leads to creating multiple options and weighing them against each other," I said. The highest-risk option was to fire Jerry immediately. 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 was to continue tolerating Jerry. That would essentially eliminate the legal risk (L×M = 0) but would come at a high business cost, including the risk of talent loss or the CEO becoming very unhappy.
I offered a middle-of-the-road approach: "A risk option in between might involve bringing Jerry to the edge of discharge while leaving some wiggle room. For example, you could lay out in detail why it’s in his best interest to leave the company. And perhaps incent him with a severance/release offer. That approach has some legal risk but creates a decent chance of getting Jerry out sooner rather than later."
At that point, Morton and Mary agreed to meet the next morning to develop a game plan.
A few months later, Mary called me. "We agreed on a middle-of-the-road option and created one of the most comprehensive performance improvement plans I’ve ever seen," she said. "We met with Jerry and walked him through his employment history, pointing out the many failed attempts to make things work. We told him 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, we’d put him on a last-chance corrective action plan."
It was an either-or proposition—Jerry could either elect severance or attempt to improve. If he chose the latter and was terminated, there would be no severance.
"Jerry went home, came back in the morning, took the severance, signed a release, and quietly and cooperatively left the company," Mary told me.
"That’s great," I said.
"I agree," Mary said. "But you want to know the best part?"
"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, and it’s no longer a tug of war between HR and management."
Teaching from the Trench
I’ve met many managers who don’t have a high opinion of HR and vice versa. The complaints are familiar. From management, it’s "They don’t understand our business! They slow everything down! They’re the Department of ‘No’!"
From HR, it’s "They don’t know how to communicate! They wait until the last minute and then want immediate action! Their documentation stinks, and they blame us!"
However, I’ve also met many managers who say HR helps them be more effective as well as HR professionals who value working with managers.
What distinguishes the enthusiasts from the cynics? This story provides a good illustration. Notice the elements. Morton had a festering employee problem, but he never brought it to Mary’s attention. He waited until he was in crisis mode to loop in HR.
For her part, Mary responded from a strictly HR perspective. Her focus was on the documentation Morton had gathered and the problems it raised. Things went downhill quickly. The meeting easily could have ended with each person renewing their respective membership in the "I hate HR!" and "I hate management!" clubs.
What did I do differently? I resisted the temptation to jump to conclusions. Instead, I put the issue of Jerry’s termination in a risk-analysis context.Rather than saying, "Here’s the answer," I presented options so Mary and Morton could find a solution that worked for both of them.
Most HR professionals prefer being coaches but feel stuck in the role of cops. It doesn’t have to be that way. If you’re in HR, try adopting a risk-analysis approach; Mary has made it a regular practice. If you’re a manager, share this story with HR and invite a conversation about it. I think you’ll be pleased with the outcome.
Tale No. 1: ‘I Can’t Log In’
For 26 years, George worked for the same company. One morning, when he booted up his computer, the username/password combination didn’t work. He tried twice more without success. As he reached for the phone to call IT, he noticed he had a message from Betty in HR: "George, please call me as soon as you get in. It’s important."
He called Betty, who 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. "This is Bill from Security," Betty 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 benefits and a separation agreement. "If you decide to sign the agreement, the company will pay you four weeks of severance. You can take it home and decide later," she said.
George was too shocked to say anything. After a few minutes of silence, Bill handed George boxes, and he began packing family photos, personal books, company mementos, a couple of plants and his Chicago Cubs coffee mug. Bill looked on to make sure no company property was taken.
As Bill escorted George out of the office, the two had to cross an open area where other employees could see them. George saw several colleagues, but none made eye contact.
Neither George nor his wife was impressed with the company’s 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!"
Shock turned to anger. "They wouldn’t even let me say goodbye," George remarked. "They walked me out in front of my co-workers like I was some kind of criminal!"
George decided to file a federal lawsuit alleging age discrimination.
After two years of litigation, the case went to trial. George’s attorney introduced evidence that younger colleagues kept 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 legal wrangling, the parties reached a settlement. The company ended up paying $850,000. By then, it had already spent nearly $300,000 in litigation costs and attorney fees.
Tale No. 2: Too Much Information Is Better Than Not Enough
We sat around a table in my client’s conference room—five members of the executive team and me. I’d been asked to do a risk assessment of a proposed reduction in force (RIF). The company had purchased a large tract of land near St. Louis and had begun constructing a distribution center. Once that facility was operational, the company intended to close its existing center outside of Atlanta. Only a few Atlanta employees would be offered relocation packages; the remainder would be let go.
One of the topics of discussion was what to say to the Atlanta employees about the impending change.
"Nothing, until we tell them that their employment has been terminated," said one executive. "We need them to perform right up until St. Louis goes operational."
When asked for my advice, I said, "I think you should be upfront about what you’re doing and why and how employees fit into the plan."
An energetic discussion ensued. Eventually, the executive team agreed to follow my recommendation. 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 staff meetings to explain the company’s plans. Additional information was given through the intranet and e-mails from the CEO. Employees were encouraged to ask questions. If managers didn’t have answers, they promised to respond as soon as they did.
Not surprisingly, many Atlanta employees were unhappy. "Why St. Louis?" they asked. "What’s wrong with staying where we are? Why are only a few employees being offered relocation packages?"
Management didn’t duck any questions. When dissatisfaction persisted, the senior team acknowledged employees’ point of view. "We’re trying to use our best business judgment to keep our company competitive," an executive said. "You may not agree, but these are decisions we felt we had to make, and we wanted to share them with you early so you had time to plan."
How did this approach work? A total of 460 employees were let go, and there were no lawsuits. There wasn’t even a single attorney demand letter.
Moreover, employees performed until their release dates. They signed the separation agreements, accepted the severance and moved on. Productivity did not suffer.
In fact, a customer told a facility manager how impressed he was by an employee: "We had a problem with a shipment, and he jumped on it. … I was amazed we received such great service from somebody who knew he was about to lose his job!’"
These stories illustrate two strategies for handling layoffs and RIFs. Unfortunately, the first scenario is more typical: The employer takes an almost adversarial approach, showing a lack of trust in employees and sharing as little information as it can as late as possible.
By contrast, being upfront in sharing sensitive information sends a message of trust and respect. It upholds employee dignity, which often distinguishes workplace layoffs that go well from those that don’t.
If you’ve ever been part of a layoff, you understand. Taking away someone’s job is inflicting an injury; don’t add insult.
Jathan Janove, J.D., is principal of Janove Organization Solutions in Portland, Ore.
Illustration by Jan Feindt for HR Magazine.
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