“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
Today I have some great links to share that should bring a laugh, or at least a chuckle, to anyone who has worked in the cubes of corporatedom.
Of all business actions, the one that people are most prejudiced against is meetings. David Silverman offers a great idea that rings organizational bells in a positive way—sanity via the 50 minute hour.
Next is a question asked by a reader of the Boston Globe. Typically questions asked publicly garner a variety of opinions, but not when the questioner is looking for support for pursuing self-recognized unethical behavior—no matter how stupid the underlying policy.
And speaking of stupid, how ’bout the newest device to deal with interoffice romance? Read all about the love contract (yes, it’s legally binding) that some companies are instituting.
Stupid topping stupid today, but first prize has to go to the Burger King manager who invoked the “no shoes” policy when dealing with a barefoot six month old baby.
“Employees Are Our Most Important Asset” It’s almost ubiquitous in corporate culture statements, but what does it really mean?
Financially, employees simply don’t show up on the balance sheet. On the income statement, employees are definitely an expense, often well over 50% for most service-oriented companies. So, in any accounting or financial sense, employees are simply not treated as assets.
Next, asset ownership. Companies own assets .They can buy assets, sell assets, and borrow against assets. Pretty difficult to do that with employees.
Finally, assets tend to have long lives. Real estate has a long life, patents last 17 years (or more); even inventory has a shelf life up to a year.
But companies treat employees just the opposite. Companies resist unionization, which creates long-term relationships with employees. Companies prefer “at will” agreements, which allow the company to terminate employee relationships with only two weeks notice. Is that long-term thinking?
Bluntly, most American companies simply do not treat employees as long-term assets. European companies are even worse. Due to government regulations limiting a company’s ability to terminate employees; most European companies go to extreme lengths to avoid hiring full-time employees.
Rather than working to acquire these human “assets,” they actively avoid them. Sounds like employees are treated more like liabilities than assets.
And in the US the concept of “employee as a liability” has certainly gained currency in the past ten years. Temporary employment, both full-time and part-time, has exploded. Outsourcing, both foreign and domestic, is simply one more way for companies to avoid acquiring employee liabilities.
While employees may be our “most important asset,” companies act as if employees are their greatest liability.
Does your organization claim that employees are its most important asset? How does it demonstrate that? Do your employees believe it? Let us know.
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
In Saturday’s links we have an example of just how badly companies write policy.
Of all business actions, the one that people are most prejudiced against is meetings. David Silverman offers a great idea that rings organizational bells in a positive way—sanity via the 
“Employees Are Our Most Important Asset” It’s almost ubiquitous in corporate culture statements, but what does it really mean?
