How to Offer a Severance Package
When terminating an employee, a prudent employer often offers a severance package that includes financial terms. The termination process can include negotiation, not unlike the hiring process. When you offer a severance package to a terminated employee, the employee may counter the package with some bargaining. Reach a severance agreement acceptable to both parties.
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Assemble the details of the terminated employee’s benefits package so you can conduct an examination.
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Determine the terms you will offer as a part of the severance package. It may contain severance pay, insurance coverage extensions, outplacement service, recommendation letter and continued possession of company perks such as electronic devices and memberships. Include a clause that stipulates the employee cannot sue you after accepting and receiving severance benefits.
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3.
Write the terms of the severance package in a formal list that you will present to the employee at the termination meeting. Include a line at the end of the document for the employee’s signature agreeing to the terms.
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Meet with the employee to deliver the termination news. Provide the written severance package terms during this meeting.
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Expect that a prudent employee will use the waiting period allowed in the terms of the package to examine it carefully. After examination and analysis, the employee may accept the severance package as-is or may try negotiating a better offer.
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6.
Give serious consideration to an employee’s counteroffer. You may wish to meet the employee’s counteroffer on various points to keep the employee satisfied as he leaves your employ.
References
Tips
- Common severance pay ranges between one to four weeks of pay for each year of service.
Warnings
- Consult an attorney to learn the laws in your state that govern severance agreements. Make sure that the package you offer adheres to applicable laws.
Writer Bio
Kathryn Hatter is a veteran home-school educator, as well as an accomplished gardener, quilter, crocheter, cook, decorator and digital graphics creator. As a regular contributor to Natural News, many of Hatter's Internet publications focus on natural health and parenting. Hatter has also had publication on home improvement websites such as Redbeacon.