Real Issues. Real Answers: Managing Generational Transitions

By / 5 months ago

Real Issues, Real Answers.

In a very real sense, our companies are our people. They’re what set us apart from the competition, and they’re a big reason for our successes. Still, they’re people…and people age. That reality poses a fundamental challenge for companies with an aging workforce who want to do right by their long-time employees whose performance isn’t what it once was, while avoiding age-discrimination lawsuits. That’s why this month’s Real Issue addresses…Managing Generational Transitions.

This month’s question was suggested by a distributor in the Midwestern U.S. who asked not to be identified. In short, it’s about tough personnel decisions that company leaders face. As with all of our Real Issues, there are no easy answers. But as you’ll see in the thoughtful responses that follow, this is one that touches most companies at some point, and how it’s handled has very real consequences.

As we do each month, we emailed a very brief survey to subscribers who’ve opted in to receive our emails. A big thank you to those who took a few minutes to share their insights, experience and opinions with their fellow dealers. If you’d like to participate in future Real Issues surveys, just drop me a note at Rick@LBMJournal.com, and I’ll make sure you get our next survey.


The Question
“We have a situation in which an aging professional who’s been with us for many years is no longer performing as well as we need, and we’d like to promote a hard-charging, energetic newcomer to fill that position. What’s the best way to manage this situation for the company’s future, while doing right the right thing for the senior employee, and without encountering age discrimination?”

The Responses

“Pair the two together to see if the hardcharging newcomer can create a spark for the aging professional. This gives both an opportunity to learn from each other without jeopardizing the accounts and risking an age discrimination suit. If, after a period of time, the aging professional does not improve then you transition to the hard-charger.”

“Ouch! I wonder if I would fit that description? That is a hard question. Is it possible to ask the ‘aging professional’ if they would like to work part time? They might be relieved with that option, to help them transition into semi retirement. Then open another space for the upcoming person, let them loose to sell/perform. That way you are not putting an ‘old horse’ out to pasture to be replaced. Rather just adding another person to sell.”

“Every position should have a welldefined job description and every job should have a clear set of standards and expectations. This makes it easier to judge an associate on their performance. Age should never come into question when rating an associate’s performance.”

“Twice, on advice of labor counsel, I offered aging employees whose productivity had fallen a lot, one-year consulting contracts at half pay for just being accessible to their successor 15 hours a week, if necessary. In both cases they took the offer and we had a smooth and litigation-free transition. This was a lot less expensive than the average age discrimination settlement of $630,000.”

“Offer the senior employee the role of a mentor to the hard-charging, energetic newcomer. The newcomer is likely to encounter issues and situations that the more senior employee has experience navigating. Also, let him keep the accounts that like him and continue to buy from him. This will also be a lead in for the newcomer to meet and learn about those customers. Keep in mind that the older employee has gotten your company to where it is today. Be respectful.”

“First I would ask what type of counseling you have given the senior employee and what your goal setting process is. I think too often managers give up on employees without putting in the real effort required to give them the runway needed to be successful. I would always argue that if goal setting is done correctly there is no ‘old dog/new tricks’ scenario. My recommendation would be to bring in new talent to challenge the ‘old dogs,’ but I would never demote or kick out someone that has long standing with the company. That person has obviously brought value to the table for a number of years, and kicking them to the curb could send a damaging tidal wave through your organization. Ask the senior employee how he or she thinks they could help you train the new talent. He or she will likely get the message, say ‘challenge accepted,’ and show those new guys how it is done.”

“I would sit down and talk to the older professional, and ask about health, home and life issues before I did anything. If this employee has been loyal to you for years, they at least deserve sitting down and talking. As we grow older, we are not as fast, nor can we multitask as well as we used to. That is not a reason to send them out to pasture. After speaking with them, you should be able to have a feel for what is happening in her personal and work life, and maybe can have them choose to work part time, or take some of their tasks and give them to someone else to handle. They may welcome the opportunity to hand off some of their work to someone else. Speaking as a 60-year-old, long time manager of a company, I know that I can not complete as many tasks in a day as I used to. If someone were to tell me that they were going to replace me with a ‘youngster,’ I would be deeply hurt. You give your life to a company, only to be slapped in the face. If you don’t take the time to find out what is happening in their life and demote them, you will be opening yourself to a lawsuit.”

“Bring the younger associate in as an ‘assistant’ to the older associate. In this relationship, the older, more experienced professional is allowed to ‘share’ his knowledge, gained through years of work, while the younger professional may be able to use his energy and technological insight to the benefit of all in this tricky situation.”

“I would start with my attorney!”

“Our company is developing a culture of mentoring which assists us during times like these. We speak often about what each individual’s changing goals may be (some may want more responsibility and some actually may want less—you don’t know until you ask), and which emerging leaders might benefit from being paired with tenured staff who have seen many ups and downs in our industry. It doesn’t happen quickly, but frequently, when tenured staff invest time and wisdom in others who have a real desire to learn, the result is a win-win situation. It’s not a quick fix, but transitions can open opportunities for both staff members.”

“I would speak to the senior employee and see if they were willing to take a step back and help train his/her replacement and find a suitable position for them afterwards.”

“Give them what they can handle, keep their spirit alive. They need to be independent and bring knowledge to the table. Hire a young person to fill the gap and let them shadow the aging person. Best training in the world.”

“A lot has to do with the age of the senior professional. Another big factor is the ability to factually show the deterioration in performance. Can the senior staffer be enticed to resign? Is he/ she aware of their drop in performance? Is there any other function he/she could perform that serves the company and helps them save face?”

“Pray.”

“Have a business discussion with the individual first, put all facts before him and then decide what is best.”

“This is unfortunately an issue that every company fortunate enough to mature into a ‘second generation’ company will face. It is unfair to simply discard old assets, and it is also unfair for some to think they will live forever. Change is inevitable, and I would simply put myself in that person’s chair and realize there are two sides. Ultimately, if the company cannot afford to move forward with both employees, the answer is obvious. If a part-time or reduced salary is available, that would be your best option.”

“Make sure to implement a performance review twice a year, document it, and make sure your company policy states reasons for reprimand. Make an enticing reason for retiring.”

“You really have to look hard at the young, hard-charging, energetic newcomer. If he is as good as you think he may be, he may not stay around very long. I would have the new guy and the senior work together. The experienced old-timer and the inexperienced newcomer could learn from each other. Then, by having feedback from each, you could get a new perspective from what is going beyond your desk. I would think that by having the senior working with the younger person, the senior would begin to think about his future.”

“Move the elder to another position in the company. Explain why to him. Hopefully the company can absorb not cutting his pay much.”

“My previous employers would have his supervisor add additional work, become increasingly critical, find fault with his work and look for cases in which he lost the company money no matter how small, even if in the best interest of the customer. He would either quit or his performance would degrade to such an extent he could be easily fired.”

“Succession planning is an important part of running a successful business. I would approach the older employee and ask him how he would feel about being a mentor? If management recognizes the older employee is under-performing, chances are he has noticed the change in his performance and will be willing to do the right thing for the good of the company. It is very important to remain polite yet firm when dealing with these type of situations.”

“If you respect the ‘elder statesman,’ and admire the job that he’s done, create a new position for him. Give him the opportunity to share what he knows with other, younger, less-experienced members of your organization. His guidance to others could prove not only beneficial to the company, but could prove to be profitable, too. Make clear to him that his role is to mentor and provide guidance to keep the company solid. Pay him a salary, and a performance bonus/incentive (to keep his earning on an even keel), if his department shows increased production, and/or profitability.”

“Ask the senior if they would be interested in a severance package to retire. A lot of times they would take that without it being discrimination. The new blood coming into this industry are enthusiastic go-getters, which is just what companies need to survive.”

“We are in the middle of a similar situation with a very knowledgeable yardman whom we no longer want to do physical labor but who could still be valuable for his knowledge. He’s been hurt at least twice on the job, so over the last few years we have curtailed his outside duties and have been having him oversee receiving and teaching him some computer skills. We have basically carved out a new position for him. Unfortunately we have met with some resistance, and he tends to gravitate back to his old duties. We’ve documented in his personnel file all the meetings we’ve had with him about the problems with the transition, just in case there’s ever any suggestion that we’ve acted inappropriately. We also spoke about cutting his hours; a suggestion he used to oppose but now seems to be open to.”

“Be honest and let the senior member know, although he is still valued you need to look towards the future. Involve the senior member in the process letting him know the newcomer could use his experience.”

“Set aside time to discuss the situation with the employee. Explain your concerns and discuss their future with the firm as you see it. If the employee has been diligent and preformed the job well in the past, be sure to show them the respect you would want to be shown. Ask how they feel they are doing in their job and what they see in the future. Keep your options for this employee open. How can you put their talents to better use. By getting them involve in the discussion you will find the situation much easier to resolve without showing bias.”

“Acknowledge how well he/she has done and that it is time to lighten the burden and pass the knowledge on to someone who wants to learn and do more.”

“Ask the senior employee to help with the training and be upfront about it. You can do this and find another position for the senior employee, if you wish to keep them. The key is to be truthful.”

“Present the senior employee an opportunity to mentor the up and coming employee. You will make the senior employee feel well respected in that you want him to pass his knowledge to the younger employee. Eventually the younger employee will surpass the senior employee in performance as well as knowledge. Then you can approach the senior employee about taking a role with less responsibility for the future of the company and the younger employee’s career growth.”

“It is a tough question without knowing all of the facts. This is something we all deal with in this industry. We have a lot of long-term employees. However we do have to keep in mind we have to remain profitable. The younger employees will look to see how we deal with this. We have to find a way to be fair to both employees and do what’s best for the long-term of the company.”

“About a year ago our yard manager nearing retirement age was not performing to the level that he used to. We also had a bright young man who was performing at a high level that we felt like could do a better job than him. We brought the senior yard manager in and discussed with him our plan to make him the new yard assistant manager (a position which we never had before) and explained to him how valuable he was as a consultant to the new younger man. We explained that his pay would be frozen at its current level and the stress of the job would be greatly reduced. He loved the idea and has been invaluable to the new man. I think I would make the aging professional a sales consultant to all the salespeople, explaining to him that his wisdom and guidance is valuable to the company. Try to use him in a different way that he is happy with yet allowing the younger more energetic newcomer a chance to flourish as well.”

“Honesty. Never delay personnel decisions!”

“Not sure. Very touchy.”

“Communication, communication, communication. Have you addressed your needs and expectations with the senior employee? Maybe they are ready to step aside, step down, or retire. Is the senior’s experience helpful in mentoring the newcomer? Can this have a positive side? If the senior resists, make clear the expectations and goals and set times to review if the senior is meeting those goals. If not, then begin the transition.”

“I would base it solely on performance.”

“He/she may not like it, but you should do your best to find a diminished role for your aging employee. If you approach them carefully, and help them understand why the change needs to take place, they may not like it, but will eventually accept it. I have an employee that has been with the company for 46 yrs. and still has two years to retire, and can physically no longer fill his role. The yard foreman who is replacing him is a young 30-something that learned under the older guy. I was able to find a role that worked for the aging employee, with the explanation that this role is better for him physically, and will save his body for retirement. It took a few months for him to accept, but now he thrives in his new role, and he doesn’t hurt at the end of the day anymore. Three weeks ago, he came into the office and thanked me.”

“A lot depends on what that employee is doing and where he or she wants to go. In situations were the job is physical, try seeing if they want to move to a less demanding job. If the person is in sales, review whether their sales are increasing or stagnant. And at the management level what and when they move must be handled carefully. As always, communication is key. Sometimes you may have options that come to you from your employee, talk to them and be honest. If they have been a resource for you over the years, there is always a way to fit them in and infuse that new hardcharger into your team.”

“If it is an outside sales position and the veteran is not conquering new markets, the fix is a simple one. Keep the veteran with his existing accounts and compensate accordingly and give the new person the rest of the territory. Discuss a transition plan after talking with the veteran on what his long term plans are (i.e. phased retirement transition), an offer to do inside sales. At the end of the day, each position has minimum requirements whether physical, whether travel is required, whether specific hours and tasks are required. If the current job holder is unable to perform those duties then a consultation with that person is critical to assess where to go from there.”

“I would include the senior professional in all related discussions in an open forum with the decision-makers for the company, allowing him or her to be part of the decision-making process. After all, this would be no different than an apprenticeship for the newcomer and a graceful way for the senior to gradually bow out with dignity. A start and ending time needs to be defined. If the senior is part of this decision process, all should proceed with clarity and goals can be achieved.”

“I would see if there is a way to woo the senior employee into a more suitable position for them to ride out the remainder of their career. Express the need for someone of their expertise at the new position. Concentrate on the positives of the senior’s new role and not the negatives of their lack of performance. I have seen titles created to accommodate this scenario.”

“I would have a meeting with the managers in the company to see if there are any positions that need to be filled that wouldn’t require the skills that a younger person would have. It all depends on what the shortcomings are of the senior employee, if it’s physical then they could potentially do some administrative things . If they have experience working in the yard, they could dispatch or train new employees. If it’s mental, than that’s something that I would let HR handle. Regardless, I would keep HR involved throughout the process to make sure you’re legally covered.”

“It’s a hard situation. If you put the older employee with the younger to train then you might have two employees leaving. The older because he doesn’t want to train his replacement and the younger because he doesn’t get trained and thinks he does not have much future at the company. Creating a position to promote the older employee is not good for the company either. This question is why there are trained Human Resource professionals. Get guidance from someone you trust in HR. The older employee’s experience is valuable or it is not. As the owner or manager, you have to determine the older employee’s value. If he is valuable, then talk to him about his performance and try to work together to come up with a solution that trains the young guy and keep the experience of the older employee. If he is not valuable then the HR professional would probably recommend an ‘early retirement’ or demotion and give you the legal way to do it.”

“Ask the senior employee if he or she has an explanation of why the performance has slipped. Perhaps that alone will help. You owe it to that individual to address your concerns with them to see if the problem can be resolved or at least improved on. If not, bring in the new younger employee.”

“If possible, find a position for the aging professional to contribute. If not you risk losing your future leaders and deprive your company of much needed experience.”


Have a Real Issue? Contact me at Rick@LBMJournal.com.

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Rick Schumacher

Rick Schumacher is the editor and publisher of LBM Journal, and has more than 24 years experience covering the industry. Rick@LBMJournal.com