Letting go good employees: The trend of golden handshakes
Top performing employees, usually talent on board after acquisitions, being let go with a fat paycheck and a thank you letter from the organisation is rather unusual. Here is what is happening in corporate India.
Hard working employees are often felicitated within a company and sometimes appreciated in the most unusual way even in the time of corporate crisis too. India Inc is silently, but increasingly, employing the idea of a golden handshake while letting go of top performers, usually taken on board while acquiring another company. Here is what recently happened at two large companies:
An electronics giant: This MNC had acquired an ailing firm a few years ago. At the time of merger, all employees of that firm were taken in the new fold. Gradually the original teams were trimmed. This year, the parent company called in the top performers and top line managers of the firm it had acquired. They were felicitated as being best employees around but since the business directives didn’t allow, the company had to let them go. This announcement came with buffer salary packages and hefty compensation packages to the tune of Rs 30-35 lakh. This amount was handed over to a mid-level manager and the company promised that in case of future vacancies, they would consider these employees first and also that they would put it a word for these employees wherever needed.
An FMCG giant: This homegrown company bought over a popular cosmetics company. The staff of the acquired firm was told to find employment elsewhere. A handful of those employees, mostly top performers, were called and handed over a grand compensation. A zonal manager was awarded a package of Rs 60 lakh.
This is a new way in which the company has to lay off good workers but in a manner which is not painful or hurting for the employees and does not botch the company’s image. You don’t have it happening daily but when it does, the employees being laid off and the companies both remember this sequence with dignity.
Recruiting from Antal Partners’ Managing Partner, Anil Dev had a point to make here. “This is the only and the best solution in such situations. It gives employees some time and security as well. In fact, the current market firmly believes in ‘Love your job and not your company’. In such scenarios, employees too are prepared to accept the decision of the company and move on rather than burn bridges and strain relationships with the company by resisting the decision,” he says.
When asked about any such other practices being around, he said that till now, there aren’t any such practices prevalent known. This one was unique but certainly important.
- Employees gets paid well
- Employees get buffer time to find new jobs
- Employees feel rewarded
- Employers feel being just to employees
It makes money as a leveller for employees who have a larger stake in the company other than compensation. For good performers, promotions and bright future matter as much as financial consolation.
Anil Dev has an insight here. He says, “Employee being laid off has to look for a new job in a highly-competitive segment. There is an uncertainty as to when the individual would find the next job. Also, the entire hiring process at the senior level may take a while. In such a situation, the thought process of the individual is to first mitigate the situation of financial instability caused due to loss of job (on a priority) and later look for another job and therefore a fat pay cheque in such a definitely does matter.”