Why would you fire your chief executive officer over the telephone?  Why would anyone want to work for a company that would treat its CEO so shabbily?  Why would you do business with that company?

The sudden dismissal of Yahoo CEO Carol Bartz, reportedly an outspoken, combative, occasionally arrogant and sometimes profane executive, prompted me to think about how companies fire people, and the fact that how companies execute the termination can define an organization’s corporate image and recruiting brand.

To be fair to the Yahoo board, Ms. Bartz was reportedly failing to meet performance expectations established by the Directors. There are many on Wall Street who argue that her termination was justified.  Others say that her style made it inevitable. That said, the issue should be not the “why” but the “how.”  

There are reasons, justifications — excuses — as to why the board acted the way it did. Central among them was that Ms. Bartz was traveling and the board did not want word of their decision to leak before they had spoken to their CEO.  Others speculate that she may have had a clause in her employment contract that required immediate notification of termination. Fine, those are important issues to consider. But here is another:  if the intent was to rid the company of a leader who was failing in order to protect the interests of the brand and its shareholders, why would the board execute their plan of termination in a way that would cast a darker cloud over the already troubled company? 

That Ms. Bartz fired off an email broadside to her employees explaining that she had been fired over the telephone should not have been a surprise to the board or its advisors.  Nor should the resulting damage to  the organization’s image.

Boards frequently hire CEOs with fanfare for what they hope will be strong operating results, favorable press, and a strengthening of the corporate brand.  They are almost always disappointed, frustrated, even angry when their best layed plans fall short.  But there is no excuse for the board to make a bad situation worse with a poorly executed plan.

How an organization terminates employees says a lot about the real heart and soul of the company. Taking the high ground may not make the person or persons who have made the decision and who are notifying the employee feel less frustrated, but how they perform this important role will shape the image of the company.

Yahoo is not the lone offender in American business. Thousands of times each day, someone is fired for a myriad of reasons, from poor performance to unethical or inappropriate conduct. There may be reasons to immediately remove the employee from the workplace.  There may be ample justification to have security personnel available.  Even when companies try to terminate someone in the right way, things can go wrong. Fortunately these incidents are the exception.

But companies who do not take the high road, protecting the dignity of the outgoing employee including complimenting the employee for their accomplishments and wishing them well while keeping security out of the room and the prying eyes of their colleagues at bay, are being short-sighted.  

Miss-hires, at whatever level, are a costly mistake, but to make the matter worse by ending the employment relationship badly simply multiplies the problem.

© 2011 John Gregory Self