EARLY RETIREMENT

HCA

We are having personnel problems with one of our supervisors and his manager isn't doing a good job of disciplining him. We're working on that, but in the meantime, I want to suggest to the board that we offer the supervisor a bonus to retire. It won't be early retirement because he could retire at any time. He just isn't. My suggestion would be to offer to pay his health insurance for 5 years and pay him a small bonus. Reason being that we would save about $15,000 (because he is so highly paid over an entry level employee). That's legal (monetary business reasons), right??

Down_the_Middle

I think the short answer is yes. Not knowing what MT says about early retirement windows, I'd be inclined to suggest some type of separation agreement where he voluntarily departs in exchange for what you offer....... He either accepts or rejects the option. It avoids a host of other issues about "early retirement", it's definition, who's involved, who's not, etc... Unless you're skilled at doing a separation agreement I'd recommend retaining an employment attorney to help craft the document and identify the parameters that apply. This is not the sort of thing you create yourself and expect it to withstand and legal challenge in the future. Good luck.

WT

This sort of incentive goes on all the time. Witness GM, Ford and Delphi. The only caution I would give you is on the discipline front. If you are trying to increase discipline on this employee while dangling a retirement incentive in front of him, it may look like you are trying to pressure him out the door. Further, if he declines the incentive and you then must crank up discipline, it also looks worse. His obvious recourse is to claim age discrimination and say you just want to bring in a younger employee. You may have to decide to go one road or the other. Thus, you would use discipline to perform or an incentive to leave, but not necessarily both.