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 employment.

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 communities.

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 Lawyers Weekly.
For further information, contact Maryanne Peabody at 781 736 0900.