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Make It Honourable
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Process of taking exit decisions
Since the advent of liberalisation and globalisation, it is now accepted that the top leaders of a company may lose their job if the business results in their area of responsibility are not satisfactory. Senior managers in the Indian corporate world have reconciled themselves to this new reality. At the same time, they have a legitimate expectation that the company should follow a fair process of making the exit decisions. Fairness involves openness and transparency about the grounds for the decision. After taking the decision, the company should give an opportunity to the person to present his point of view and should also give him a reasonable amount of time to quit to make the exit smooth.
In the case being analysed, Uday (who has been asked to move out of his position) has been asking Maya for a copy of his 2010 last quarter appraisal. However, this document is not being shared with Uday because nothing substantial has been recorded in it. It appears that Ajit and Mark have something in mind which they do not wish to share with Uday. For a person like Uday, (who has spent 17 years in the company and has been a good performer) this has come as a rude shock.
The situation is even more disturbing for him because he was orally given a positive feedback in the June 2011 appraisal. By not documenting the real assessment, Ajit has given rise to a serious doubt in Uday's mind. Exits of senior leaders affect not just the person concerned but the entire organisation. They have a high symbolic value from the point of view of organisation's culture. The CEO must, therefore, handle such exits with utmost care.
Giving and receiving negative feedback
The managers find it difficult to deliver negative feedback and communicate hard decisions during the appraisal process. But in the fiercely competitive business environment they have no choice but to communicate negative feedback. They have to be prepared to handle the fallout of giving such a feedback. In fact, the company should train its top management in this area. Unfortunately, Ajit has been very direct in his communication, which has not gone well with Uday.
Equally important is the way the appraisee looks at such situations. There is an expectation of maturity on his part to be ready for unpleasant decisions. In this case, Uday has not made any efforts to seek an explanation from Ajit. His insistence on the rationale for the decision would have forced Ajit to share at least some details. It would have revealed whether he had played a role in the decision or whether he was merely following Mark's instructions. Sometimes a manager is almost forced by his boss to communicate decisions to his subordinates. In such situations, the manager is expected to own up the decision and not act as a mere postman. Uday may have looked at the entire episode in a different way if Ajit had shown a higher sense of ownership.
Working out a fair and graceful severance package is a very critical process in which the HR function plays a major role. There are two aspects to this. One is to provide an alternate position and the second is to adequately compensate monetarily on separation.
If the alternate position offered is at a lower level and is not commensurate with the stature and competence of the separating employee, it is better not to make the offer as this will humiliate the person even more. In this case, Uday was offered the position of rural MR head by Ajit to purportedly "show respect".
It is either a lack of sensitivity on the part of Ajit or a deliberate move to pretend to be fair. In either case, it does not show him in good light.
Exit of a senior leader is not a normal situation and, therefore, it is inappropriate to apply the standard policy/rules to calculate the package. Ideally, HR needs to be ready with suitable alternatives and not start collecting data about best practices after announcing the decision of retrenchment. This package has to be very carefully customised for the person and the CEO himself must take personal interest. The practice of asking an HR manager to negotiate the package without empowering him is yet another mistake that organisations make.
In summary, the case highlights the need for high emotional quotient, which alone can help in handling such awkward situations arising from the changing realities of the Indian
D.T. Devare (Subhash) is a Bangalorebased freelance HR consultant
(This story was published in Businessworld Issue Dated 20-02-2012)