Severance Package

Rockie

What guidelines do you use in giving out severance packages? Is it considered routine to give a severance package to an employee over the age of 40 even though their performance is poor and documented as such?

I know it's a small price to pay sometimes to give a couple of weeks instead of going through the hassle of a possible legal proceeding (unfounded or not).

Also, what is customary to give - a week for each year of service?

Just wanted to get your feedback on what other companies are doing in this area.

LFernandes

It almost sounds like your talking about two different issues. Is this employee part of a layoff or a reduction in workforce or are they being terminated for poor performance.

If it is part of a general layoff, we use a sliding scale based on length of service. We have all laid off employees (regardless of age) sign an agreement and release in order to receive their severance check.

If we are terminating for poor performance (not part of a RIF), we normally don't pay severance. However, we have used poor performance in determining if they are going to be part of a layoff and in that case we have paid out severance.

Don D

And certainly the person's age should no more enter into severence than it should enter into the reason for termination.

ritaanz

We recently changed our severance package. In cases of RIF, the employee received 2 weeks for each full year of service. This was grandfathered and we now pay 1 week for each year of service to a maximum of 13 weeks for exempt and 8 weeks for non-exempt.

If an employee was terminated for cause, i.e. poor attendance, work performance etc. there is no severance package. However, any accrued vacation or personal days would be paid.

Carol CA

I agree with the above. You have to get your story straight. Is he being terminated for poor performance, or are you having a RIF? Age should not be an issue. If he is termed for poor performance, show your documentation and do not give severance. If he is in a RIF, we give one week for each year of service (regardless of age).

I hate to think of the precedent you would set by giving poor performers severance pay.

Down_the_Middle

I understand Rockie's question becuz sometimes it's more appropriate to offer a severance to a poor performer rather than take on the challenges of a discrim lawsuit. In spite of my aversion to "paying poor performers to leave" , I've done this in the past----altho infrequently. This type of separation always included a waiver (release and settlement agreement) and generally, 1 week of severance per year of service. Hindsight has shown me that these kinds of things make sense when the departing employee may fall into a protected class by himself/herself and on the surface it smacks of "singling this employee out".I've never been in favor of this when the job class has many incumbents, but when there is only 1 person, it does beg the question.