In negotiating terms, “no” is possibly the most effective argument available to an employer, but as with all powerful tools, it is double edged and should be used with care.
We have noticed an increasing trend amongst employers, particularly banks, which are going through a consolidation process, to provide a fixed termination package and settlement terms.
They refuse to discuss either – regardless of the individual circumstances. It is a case of “one size fits all” and generally the size of the package is enough to encourage most affected employees to take it.
Any challenge, however reasonable, is met with a “no” and perhaps a tightening of the timescale for acceptance.
Any persistent challenge – even by a valid claimant whose circumstances demand individual consideration – is still met with a “no” because, as with insurers, the employer uses two systemic methods of dissuasion:
- It works on the basis that in percentage terms, very few people with good claims will want to go against the machine, and the employer will fight every case, even if they go to tribunal, just to get across the message that it will be a long and expensive process to follow a complaint through. So very few do go to hearing. Most drop out.
- Any discussion about the terms of a settlement document are dealt with by a very junior HR representative who has been told, on pain of death, never to agree to change any terms, and to keep religiously to a script of “this is a standard clause which we never vary”. If you push hard enough, it will go up the line, and come back – some time later, when employees are edgy – with the same answer even where the clause is clearly inappropriate or wrongly drafted. Systematic intransigence and/or incompetence is another tremendous tool.
So is this the right approach for all employers? Yes and no: it works, and so long as the package that is offered meets the statutory minimum or is modestly enhanced, pretty much everyone will accept what is on offer, and the process will have been managed cheaply by junior staff. Job done.
But treating everyone in this way tends to breed universal resentment of the organisation. And in terms of recruitment this may be damaging, as research tells us that a customer who has a good experience will typically tell 3 to 5 people, but a customer who has a poor experience will tell more than 20.
This may be apocryphal, but I get sufficient feedback from clients to know which employers are seen as having toxic employee relationships, and they are not shy of telling people what they think of their former employer. So a large employer has to balance the expediency of a one size fits all approach, and the short term financial gains this provides, against long term reputational damage when they want to recruit on the upswing.
Where the power of “no” is always counterproductive, is when a single employee is being dealt with, especially where the individual is senior and articulate or there are complicating issues. In that situation, the “this is what you get” approach rarely works, it just inflames the situation. In fact its mirror works much better: in my view, it is vital for an employer to reach behind the politics and personalities to establish why a situation is not working, and then to explain that clearly to an employee and propose a solution. The power of persuasion, while not exactly a “yes” will almost always produce a better result than a “no”.
Treating employees as individuals and taking the care to resolve a matter firmly but fairly is not a selfless act, it stops things getting polarised, and costs less than a dispute – both in management time and fees. The departing employee is hardly likely to be a cheerleader for their former employer, but equally it may result in them adhering to their confidentiality provisions and stop them from denigrating that former employer in the market.
In my experience, in the long term, the power of persuasion will always beat the power of “no”.