Wednesday, April 13, 2005

I was the only person who fired their employee

Ah well. We had a negotiation simulation in my power & negotiation class. The situation: you are an employer, and your best manager asks to go to a weeklong conference in San Diego.

One day, you need some sales data, and you use your master key to open up your manager's office. You get the data you need from a binder and needing a piece of scrap paper but not wanting to use paper from their office, you grab a piece of paper from their wastebasket and write on the other side the figures you need.

Your pen jams, and for some reason you turn the sheet over. You discover a note in your employee's handwriting to one of their friends. It gives the clear impression that the employee intends to skip every day of the conference, and to use the company expense account while spending the week scuba diving and wind surfing with a friend.

In other words, the conference trip amounts to a "de-facto vacation." Moreover, it was strange that they signed up for the conference in the first place because the conference didn't seem well aligned with the company's goals or even the employee's expertise.

You are now in the performance review. The employee has previously complained that the company vacation policy was skewed towards more senior employees.
In my simulation, I focused on the fact that fraud had r -- and that my trust had been violated. I used the following framework:

0. I told the employee he was my best manager -- which was actually a true fact. Then I told him "but that's why it breaks my heart to hear these allegations."

1. Get a truthful explanation -- when confronted with what your what you know about the trip does the employee deny it? Are they genuinely remorseful?

2. Solve the problem -- As a senior manager with a fiduciary duty to the company, I decided to cancel the trip to the conference. It was clear from the case study that the conference was of no benefit to the company and was merely a front for the vacation.

3. Prevent the problem from occuring again and explain the natural consequences of continuing this behavior -- let the employee know that they are on the edge of being fired and if someone like this happens again -- trust will degrade even further resulting in their firing.

4. Get some action to occur that will rebuild trust -- Since the problem as I saw it was a degradation in trust, the solution would have to focus on rebuilding trust. I didn't want to monitor the employee. I wanted to trust them, but We couldn't just repair the situation using words alone. I needed to see some kind of action.

It turned out the employee continued to justify their actions in stage 4, by saying I needed to understand he didn't get enough vacation time. He could have gone to jail for what he had done, yet he was justifying his actions.

I fired him and I was the only person in the class that did this. I felt like I failed in the negotiation by not turning things around, but what was I supposed to do when an employee commits fraud, and is not genuinely sorry they did it? Can you trust that they won't do something highly unethical again?

Strangely half the groups in the class let the employee continue to go the conference so long as the employee gave a presentation when they returned on what they had learned -- to force the employee to show up to the conference. I think this was a cowardly thing to do and I don't think the shareholders would like to spend money on a conference that is unlikely to benefit the company.

I hung out with a friend last night who had been the general manager of one Microsoft's divisions. Since that time he has been the CEO of a number of technology companies. He told me he would have unquestionably fired the person. The fact that they were you "best employee" indicated to him that the person was experienced and that he should have known better.

Having him agree with me made me feel better, but I can't help wondering if there is something to learn from what my negotiation instructor is trying to teach me. Is there really a way to turn things around when a violation of trust of this magnitude has occurred? My negotiation instructor suggested I tell the employee "the fact that you are continuing to justify what you've done gives me less confidence that something like this will not be repeated in the future. You are on the edge." He also suggested giving the employee a paid day off to think about "what we talked about" and to "construct a plan to rebuild trust."

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