On Severance

I recently observed a heated startup mailing list discussion about whether a to give severance to an employee of a early stage (but funded) startup. Most of the discussion focused on what was legally required and whether or not to couple severance with a separation agreement. This was my response:

I hate severance. Hate it. The thought of paying someone I was forced to fire because he (or she) is incompetent burns me up inside.

However. I always provide severance and I always require a departing employee sign separation agreements. For everyone from an executive to the janitor.

Why? Because it’s a small town and current and future employees will notice how you take care (or don’t take care) of people on their way out.

Other employees won’t always know why a former employee was fired, but they will know that you fired them with little notice* and no severance. It just looks bad and makes people worry about working for you.

Cash isn’t king. Your reputation is.

But then again. I’ve been told I’m a bit old school.


Now read this

On Hiring Intangibles

As the company has grown, my role in hiring has changed. No more am I involved in the “can they do it” part of the process (ex: assessing the technical aptitude of engineering candidates or the portfolios of designers). Nor am I the sole... Continue →