Planning Executive Dismissals: How to Fire a Friend

by Laurence Stybel, Robin Cooper, Maryanne Peabody



While the dismissal of an executive is nearly always traumatic event for the individual, it may be necessary one for the company. Companies which seek to operate with lean payroll costs may have to resort to dismissal action more often than other firms. While dismissal may be necessary for the company, it need not necessarily be brutal for the executive. Careful planning of the dismissal interview and careful thought about the design of severance arrangements can significantly ease the pain and insure the likelihood of a speedy and appropriate future job match for the executive. Severance arrangements should explicitly state the company's obligation to the executive in terms of cash compensation, non- cash compensation, written references and outplacement consulting services. They should also explicitly state the executive's obligation to the company in terms of previously signed non-disclosure and non-competition agreements. Selection of an appropriate local executive outplacement firm can be a valuable and helpful demonstration of the company's sincere desire to minimize the personal of professional trauma associated with the dismissal.

California Management Review

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Published at Berkeley Haas for more than sixty years, California Management Review seeks to share knowledge that challenges convention and shows a better way of doing business.

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