How Should You Deal With Legacy Employees?

Here’s a question being posed to one of my colleagues. Your organization has many employees who have been with the company for 10+ years, and who have always been loyal, hard-working, good ambassadors of your company. But your business has evolved significantly over the years. In many respects, you’re a very different company today. These people helped you get to where you are now, and you truly appreciate their contributions. It’s not their fault, but some of these people are no longer a good fit for the company as it is today. What do you do?

This is a common situation. In previous posts, I’ve written about the importance of maintaining unequivocal integrity to the organization’s core values. But in this situation we’re required to decide what to do when we encounter a conflict between two core values. I hate it. It’s difficult. All solutions have painful side effects.

In this case we have employees who’ve done everything right. They’ve earned our loyalty. Let’s assume that loyalty is one of our core values. And let’s also assume that another core value is maximizing organization performance, which benefits all stakeholders. What are your alternatives?

Re-cast them into another job.
This could require them to take a pay cut, or you could decide to grandfather their compensation. Either way, at least they still have a job. This alternative demonstrates a balance between loyalty to these individuals and your duty to maximize benefits to stakeholders.
Terminate their employment, with severance and help.
Unfortunately, re-casting is often impossible. You could give them a generous severance package, and you could extend yourself to help them find another job. It shows some loyalty and empathy for the employee, while emphasizing benefits to stakeholders.
Terminate their employment without generous severance or help.
This seems to be undesirable to me. It maximizes benefits to stakeholders, but it demonstrates no loyalty at all. Your employees will get the message. You expect loyalty, but you don’t give it. If you choose this option, quit stating that loyalty is a core value. This, at least, allows you avoid hypocrisy.
Carry them. Allow them to continue in their present role, even though they can’t meet the current expectations for the role.
This can be an attractive option at first glance. Perhaps some of these people are close to retirement. You could demonstrate strong loyalty by simply carrying them, tolerating their deficiencies. This requires extra investment to compensate for these deficiencies, and does not maximize benefits to stakeholders. And toleration of poor performance doesn’t enhance your image as a leader. Don’t choose this for people who aren’t close to retirement. And if they are, I’d choose option #2 above.
Allow them to continue in their current role, giving them the opportunity to meet the current expectations for the role.
This is the most attractive option for me. It’s not your fault that expectations have evolved with changes in the business. You can give them all the help and support in the world, but if they can’t meet the current expectations, you can revert to one of the other options above. But you must hold them accountable. I think this option demonstrates strong loyalty without compromising your duty to maximize organization performance. I’d try this one first.

Thanks to Mark Epp for suggesting this topic.

And thanks for reading. As always, I welcome your thoughts.

Larry Sternberg

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2 thoughts on “How Should You Deal With Legacy Employees?

  1. Every leader has to make decisions like this at some point, and this is a great analysis of the possibilities!

    If I had to put these in order of preference, I would make #5 first, followed, in order, by #1 and #2. There is great value in recasting loyal, engaged employees into roles where they can positively impact organizational performance. If that is not possible, termination with severance and help would be the last option.

    While they are certainly among the universe of possible options, I see #3 and #4 as unacceptable options in the scenario you’ve laid out because those options do not fit the vision of a company that that equally prioritizes BOTH loyalty and organizational performance as core values.

  2. Great topic, but i feel the solution is lot simpler than it is made out to be. Choice 2, in my opinion, is the simplest and most obvious choice.
    Terminating the legacy employees is not as bad as it sounds, as long as it is done with sufficient communication and the participation of the concerned employee.
    In most such cases the organization is now much bigger / is very different from the one that the person joined and all the employees would not be as effective. It might just be in the best interest of that employee to be let go.
    Yes, it might be hard in the very short term, but most people would find there own quickly and find a new job where they are not just more effective, but also happier.
    Any other option is just unfair to the employee or the organization.

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