4 ms·
Employers give it for one of three reasons: 1. It was negotiated as part of your job offer. (It is too late to try to negotiate it at any other time.) 2. It p
by dsr_ 6y ago
Employers give it for one of three reasons:
1. It was negotiated as part of your job offer. (It is too late to try to negotiate it at any other time.)
2. It provides a lever for future behavior. "By accepting this severance payment, you agree not to sue THE COMPANY for any reason, and not to disparage THE COMPANY, and ..."
3. It makes the employer look reasonable to current and future employees. "Laid off 11% of the workplace due to economic conditions; 3 months of severance and various benefits" is much more conducive to hiring than "Laid off 11% of the workforce with no notice, no severance, no nothing".
- pnw_hazor 6y agoWhile severance benefits may help with company goodwill or assuage the feelings of the survivors, I believe the real reason is mostly number 2. Exit aggreements almost always come with liability/discrimination disclaimers and usually new or updated language related to disclosures, company equipment, digital access, IP rights, non-compete language, and so on. Tying the exit agreement to new money provides the necessary consideration to establish a valid contract.