MERRY CHRISTMAS YOU'RE FIRED!
These next weeks before Christmas should be a time for "Peace on
Earth; Good Will to All." Firing a key manager during this time seems to
be a singularly inappropriate managerial action to take. And yet, we usually
get new clients just around the corporate Christmas party season.
Merry Christmas. You're Fired!
The typical corporate client which engages in Yule Tide terminations often
pays out year end bonuses to its key executives. These companies also lack
performance appraisal systems or tend not to be thorough in its on-going
administration. The result is that senior management often is perceived as
making subjective decisions regarding end of year bonuses.
Assume a CEO has targeted an executive for dismissal early in 1997. The
boss plans to give this executive some nominal bonus at year's end. The CEO
pays a visit to the corporate attorney to discuss his intentions. She tells the
CEO that the plan is most unwise. If the executive is At age 55, Fred is
covered by the Age Discrimination in Employment Act of 1967. That law prevents
employers from using age as a basis for hiring or firing people ages 40 and
above. Any form of bonus pay-out in December would imply that the executive's
performance is within the range which the company still considers acceptable for
In a scenario when a December bonus is followed-up with a January dismissal,
the executive might come to the conclusion that the firing has less to do with
performance and more to do with age.
Based on 280 Federal court cases involving claims under the Age
Discrimination in Employment Act, 59% were filed by managerial and
professional employees and 54% were filed by employees between the
ages of 50 and 59.
Age discrimination is the fastest growing type of bias charge in the
workplace. Thus, if the CEO provides any year end bonus, that
act can be used against the company if the action is contested on the grounds of
age discrimination. On the other hand, to provide all employees except one with
a year end bonus would certainly ruin that executive's Christmas. It would also
serve as a strong signal that he ought to look elsewhere for employment.
Christmas Season Firings Are Symptomatic of a Performance Appraisal System
That Is Not Working.
Most of our corporate sponsors who fire people around Christmas are caring
individuals who are upset at this unfortunate timing. But they see no
alternative. To give a year end bonus could get the company into trouble; not to
give a year end bonus is going to ruin the employee's Christmas anyway.
The key to avoid Christmas firings is not to get into them in the first
place. Beginning in January, 1998, pledge to provide honest, written performance
appraisals once a year for most employees and more often for employees who are
experiencing performance difficulties. Such a proposal helps to insure no
surprises when employees do not receive year end bonuses.
This systematic approach also provides the company with necessary
documentation to justify the termination decision, should it ever be
contested. Standards for the awarding of bonus should be clearly stated well
in advance of the actual award date. We do not think it makes good sense to
fire an employee around Christmas time. Such an action does more harm than good
for both the person who is terminated as well as the employees who remain. At
the very least, it certainly spoils the Christmas party!
Beyond the employee relations problems, terminations at this time of year
can sour community relations in return for virtually no long-term corporate
benefit. This is a particularly sensitive issue for companies located in small
If the person is to fired early next year on the grounds of poor
performance, it certainly doesn't make sense to compromise your position by
providing a Christmas bonus. Provide a zero bonus at Christmas and then conduct
the firing in January.
Maryanne Peabody and Laurence J. Stybel are co-founders of Stybel
Peabody Lincolnshire, a consulting firm devoted to senior executive career
effectiveness. There are twenty five Lincolnshire offices located in three
countries. All programs are corporate sponsored. Stybel Peabody Lincolnshire
was voted "Best retained search Firm" by the readers of Massachusetts
For further information, contact Maryanne Peabody at 781