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WHAT Were They Thinking

by Miki Saxon

How do you set policy at your company?

In Saturday’s links we have an example of just how badly companies write policy.

“His severance package gave him 6 months salary guaranteed, plus a 3 month extension if he still hadn’t found a job at the end of the 6 months. The culture of the company is such that most people just don’t notify the company when they find a new job, and so end up getting the full 9 months of severance. As a manager, he told people he had to lay off to do this (not report their new job), and his manager told him the same thing. He recently met with a former HR manager who is also now laid off from his former company and she is doing the same thing…not telling and just collecting the extra 3 months. She says it is common practice.”

The numbers are nothing to sneeze at, for an executive at $100K annually that’s 50 thousand dollars; Assuming it’s the same at all levels, a far more junior person, say $40K/yr, its ten grand. Even today that pays the mortgage for several months.

Sure, it’s unethical to take the money, but it’s also appears to be common practice in this company. It’s difficult to believe that the company, in the form or the CFO or someone else in finance, isn’t aware of what’s going on; HR certainly must know, since one of its own is doing it.

Who writes a policy such as this? Maybe HR, but since it involves severance it would be signed off by finance and, depending on the size of the company, the CEO.

So the question becomes WHY? Why would the executive team approve a policy that could cost the company tens of thousands of dollars when it could least afford it?

WHAT were they thinking? Two things come to my mind…

  • The board favored a stingy severance package (although six months doesn’t seem stingy) and this was management’s way around that; or
  • management is completely asleep at the wheel.

What do you think?

Image credit: MichiganMoves on flickr

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