Costly Consequences

One of the perils of working in Human Resources is getting blamed when things go wrong.  This seems to be the case in a recent costly settlement scandal, unfolding at Concordia University in Montreal.

Man Holding Money
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How does one jump to the unfortunate conclusion that the reason for this settlement at termination, comes from a fault in the hiring process?  Before we begin to speculate, let’s be clear in our understanding that none of the facts related to this situation have been acknowledged or identified by the two primary parties in this case.

It does seem evident, however, that there are a few costly lessons to be learned from this case.

First and foremost, no matter how senior the position may be, is the person selected for the role truly skilled and qualified to meet the requirements of both the position and the organization?  Good human resource practices should ensure that hiring decisions are based on more than just professional reputation alone.

Second, are the terms of the employment contract, which solidifies the employment relationships at the time of hiring, reasonable and mutually beneficial? Typically, reasonable termination clauses are included in the employment contract signed and agreed to by both parties at the time of hire.  In this case, it seems that the benefit in the form of the amount of severance, which was provided as a result of the ‘mutually agreed’ termination of the employment relationship, rests with the departing employee.  From the perspective of an outsider to this particular situation, it appears to be out of proportion to the benefit gained by the university based on the amount of time the individual was employed.

Third, what is the organizational risk assessment and risk tolerance for a hiring decision that does not go as planned?  As HR practitioners, we do not spend enough time in the recruitment planning and hiring process to gauge the consequences of poor hiring decisions.  We should definitely be doing our due diligence homework at the time of hiring and include the risk of impact on organizational reputation when these types of situations do not go exactly as planned, especially when they end up in the public domain.

Discussion Questions:

  1. As the HR advisor in this case, what processes or steps would you have put into place to prevent this situation from happening as it did?
  2. Do you think this level of executive severance pay out is appropriate? Why or why not?
  3. Identify three additional lessons learned from this case in relation to employment contracts and the hiring process.