Employment contracts have more to do with the personal relationship between executives and subordinates than we think

Research around the reasons the employment relationship between talented, long-serving executives and companies can sometimes break down and end in retrenchment, indicates lack of timely confrontation on the part of managers in charge of talented executives. This worsened the relationship between both parties and ultimately led to the termination of the contract, according to research by Schuitema and Associates consultants on their clients' companies. Research found that not all employment rleationships require the same 'emotional qualities'. Some call for kindness and generosity; others call for courage. According to the findings, managers of talented executives lacked courage when dealing with performance issues.

The research, done according to The Schuitema Care and Growth™ Leadership model, showed that although poor placement decisions at senior management level cannot be entirely avoided, they can be significantly reduced through more rigorous (as opposed to ruthless) people selection.

According to the research, one of the most important factors in avoiding a breakdown in the employment relationship of talented, loyal, senior executives is the need for an ongoing, frank feedback within the relationship. Again this required courage from managers.

Reasons for the breakdown

Interestingly, the research revealed that the executives and their managers did not agree on the fundamental reasons for the breakdown of the relationship.

Managers acknowledged the influence of external factors like company downsizing, but placed emphasis on ability issues such as the executives' lack of competency or unwillingness to make the required changes in attitude.

The executives, however, felt that they had the inherent ability to do their jobs and attributed job termination to factors beyond themselves. They felt they hadn't been given the necessary back-up and support from management: that this could have been forthcoming if management 'chose to do so'. Many executives contended that had they had more time they would have achieved significant succes in their role.

There was also a discord between the parties on how well the executive was performing and, if poor performance was acknowledged, the reasons for it. Finally, there were also opposition of views on selection: most of the managers felt that, in hindsight, bad appointments had been made; the executives believed that poor selection was not the issue.

Delaying the inevitable

One thing that both parties realised – well before the end of the employment relationship – was 'that things were not going to work out'. However, in almost every case the executive had a sense that 'it was over' earlier – and in some instances much earlier – than the manager.

In hindsight, most of the managers believed that they should have acted faster and more decisively in terminating the relationship. They felt the process had been unnecessarily protracted and painful for both parties. The executives agreed that a shorter, more decisive process would have been preferable.

Notably, the painful part of the process did not refer to a distasteful haggle over money. The majority of the executives acknowledged the severance settlement to have been generous and not an issue. The executives' pain was associated with other factors: the breakdown of a long-term relationship and feelings of regret, betrayal, failure, hurt and guilt.

The question of intent

From a Care and Growth™ perspective the intent (the 'why?') of the managers and executives surrounding the ending of the relationship is crucial.

Managers maintained that they had the interests of the individuals in mind when they decided to end the relationship. While they were required to take into consideration the interests of the company, they were also genuinely concerned about the individual.

Without exception, the executives disagreed. They felt the needs of the business or the manager had been the major factor. Several executives commented that their managers could have done much more to help them succeed in the job or to facilitate placement in an alternative position within the organisation. Here they cited the manager's personal career ambitions or lack of courage in opposing dictates from up the line. None of those in the line of command, but particularly their immediate managers, were viewed positively by the executives. Instead, they had a sense of being 'let down by' or even 'betrayed'.

However, a few managers – interestingly, always outside the direct 'firing' line – were singled out as having a genuine interest in and wanting the best for the individual. Where these people had at some point conveyed negative feedback on the executives' poor performance, this had been more readily accepted.

The lessons

Concerning Care and Growth™, the following lessons emerged from the research:

1. Act swiftly and decisively
In the real world, poor decisions are made. People choose or are directed to the wrong seat on the bus. To know the right decision is sometimes only possible once the effects of the wrong decision have been experienced. Nevertheless, the following lessons should be borne in mind by those in leadership positions.

When it comes to appointments, don't compromise. When probed, several of the managers acknowledged that they should have been more unconditional in their appointment decisions. Although they were aware that particular individuals were less than ideal, they went ahead with the placements – because they either were anxious to fill the post or lacked the courage to say 'no' to the individual or to management up the line.

If you have to act – act. Letting people languish in uncertainty, sometimes for months, is not only inappropriate, but cruel. Once the need to act has become apparent, it is vital to deal with the issue urgently. the longer a person is allowed to continue in uncertainty, the greater the disservice to the person and everybody else around.

Another perspective, especially from someone not so emotionally involved, should be sought. 'Caring' for the person in this context means being decisive early on, then helping the person get out of the situation and get on with his/her life. Both the manager and possibly even the executive could have 'moved on' quicker if they had sought the right counsel. Those executives in the interviews who spoke of a 'vague unease' and 'a sense that things were going the wrong way' didn't take the initiative to either resolve the alleged perfomance issues or move on. Generally, others did not share the manager's indecision. Colleagues, HR professionals, consultants – and ironically the executives themselves – saw the need to act before the manager did and were often clearer on the issues.

2. Face and deal with the issue of intent
All of the executives interviewed were acknowledged as having previously performed well – in some cases exceptionally well – in the organisation. For things to end in this way was understandably devastating for them.

It is not surprising that they viewed the people who had them retrenched as 'malevolent'. It is only human to find someone to blame.

Generous retrenchment settlements softened the blow, but could not compensate entirely for the emotional pain they suffered, they said. It is unrealistic and naive for managers to expect the retrenched executives to view them in anything other than a negative light.

Managers, by virtue of their position, need to take some tough decisions. Leadership is not a popularity contest – it is not easy to lead and be popular all the time. Where 'it hasn't worked out', managers need to stand back, reflect and ask themselves honestly what their real intentions were. If they believe their intentions were sincere – rather than expedient – they should be allowed to proceed. They must realise that the act of retrenching the executive might never be accepted – and that the executive concerned might never acknowledge the decision was right.

3. Take action to improve appointment decisions
Organisations should be much mroe rigorous in their selection and appointment processes. Doing so will reduce not only the number of people who end up 'in the wrong seat on the bus' but the time and emotional trauma associated with retrenchments. Two key issues need to be addressed: Firstly, care should be taken to specify the success criteria for a particular job level, function or role.

In addition to the relevant experience, knowledge and skills required, the necessary behavioural competencies should be determined. In particular, due consideration should be given to identifying those critical personal attributes which can either enable or derail the individual once he is in the position. Personal attributes like 'a positive disposition', 'courage' and 'humility' are both difficult to acquire and to change.

Secondly, significant rigour is required in assessing the candidate against the characteristics required for the job. The assessment sould be used not simply to make a 'go'/'no go' placement decision, but as the basis for a strategy to be put in place before the person enters the role. The strategy should cover both how the position can be used to further refine/hone the person's strengths and what should be done to overcome or limit the effects of critical weaknesses.

Significant improvements in 'right' placements can be realised when people know at the outset both what they need to achieve in terms of performance deliverables and what they should learn, practice or change in themselves.

4. Grow people through feedback and watching the game
It is useless giving peple candid feedback at a time when it will be seen as endorsing termination of employment or as an admission of failure. Honest feedback should be given regularly outside of a crisis, and as early as possible in a person's career, while changes are easier to make – not after 20 years and a string of previous managers who have avoided leveling with the person and helping him/her to come to terms with and work on areas of improvement.

Identifying an individual's growth points and then supporting the person while he/she works on them is the essence of Care and Growth™ in action. This cannot happen by e-mail or remote control. It requires the leader to be generous with his most precious resource – his time – and to get out there, 'watch the game' and follow through with feedback, coaching and support. This is, after all, what he is there to do. the leader should be measured on and rewarded for doing so.

The termination of a long employment relationship is typically seen to revolve around the twin issues of fairness, within the dictates of the Labour Relations Act, and a suitably negotiated severance settlement. But the reality is, the intangible aspects of the employment contract are more important than previously believed.