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Severance serves an important purpose for senior-level employees and executives: it makes it more painful to fire them. This frees a good employee to take more
by a-priori 13y ago
Severance serves an important purpose for senior-level employees and executives: it makes it more painful to fire them. This frees a good employee to take more risks, hopefully for the employer's long-term best interest, because they have greater job security.
- gohrt 13y agoWould it not also free them to stop caring about their job performance?
- tomkarlo 13y agoNo, because even a relatively large severance package is still worth far less than the expected value of ongoing employment. Especially for senior executives, who will generally have to spend longer searching for the next job than a more junior employee. Getting 3 months severance then being out of work for 6 months is not a good trade.