Negotiating better severance

Dear Bob …

In the event of employment termination — be it for cause, at-will, or that your leadership is mentally unstable and has you targeted as his next victim (can you guess which scenario applies?) — the terminated employee is presented with a contract to sign, upon departure, to collect any severance pay, temporary health benefits, etc.

Past performance reviews have been commendable, with one or two well-qualifieds thrown in. I’m wondering how the employee might best protect his/her interests. From the employee’s perspective, would it be of value to present a contract or counter-proposal to the company and/or your soon-to-be-former leadership upon termination? Is there any precedence for this? Should this be something to pursue? And what things should such a contract address? I’d appreciate your valued insight.

– A deer in the crosshairs

Dear Deer …

As with so many questions, the answer is, “it depends.”

In general, if you’re part of a programmed layoff, you get a package that’s standard by policy. There’s no point in trying to negotiate – it’s a take-it-or-leave-it affair. The only possible leverage point you might have is if managers get one package, staff get another, and you’re in a role that’s somewhere near the border. If that’s the case and someone who has proper authority likes you, there’s at least a chance.

If, on the other hand, you’re all alone … perhaps your position has been eliminated due to a change in direction or reorganization … then you’re in a position to negotiate. It’s a position of weakness, admittedly, but you might have a card or two to play if you don’t like the package.

In this kind of negotiation, the key is that the other person has all the organizational power, and no logical reason to give you anything. You, on the other hand, have relationship power – you can help the other person feel either good or bad about themselves.

But be subtle about it. Bursting into tears about your imminent financial collapse is a bad idea in so many ways. Creating guilt is useful; trying to create it so obviously just means you’ll be less likely to succeed.

If you know you’re going away and want a sweeter pot than you’re being offered, a good starting point for the negotation is to suggest that the way the package is currently structured doesn’t provide for as smooth a transition as you’d like to see – that it’s important to you that your responsibilities are taken over by others in the organization without major bumps.

That leads to a value-based discussion. If it doesn’t close the deal, it at least gets the other side talking. And it creates camaraderie, which can lead to the valuable side-effect of guilt.

An acquaintance of mine, reorganized out of a job within two years of accepting it, used the line, “When I took this job we both agreed I was taking on risk. I’d like to ensure a smooth transition. I also expect a package in line with the risk I took on.” Guilt is good.

Gauge your audience. It might make sense to say, “We’ve known each other a long time, Fred. What we’re looking at here is a lot smaller than I expected from you.”

Feeling guilty yet?

Don’t get mad. Doing so will kill any chance you have.

And whatever you do, don’t make threats. Despite what you read in the funny papers, the use of allegations of harrassment to extort larger severance packages, while occasionally successful, are more usually a great road to permanent unemployment.

Word does get around.

– Bob

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