172 – Fear transmission. What happens when managers’ contracts start to not be renewed?

Posted by Colin Weatherby                                                         630 words


I was talking to a colleague who has worked at a couple of councils where managers have not had their contracts renewed. She was describing the impact it had on other managers. I was interested in why it is happening, how it has happened and exactly what impact it has had.  Since that discussion I have heard of many more managers who have not had their contracts renewed.  It is almost as if the revolutionisation process has reached a new layer of the organisation.

The first manager was not re-appointed almost a year out from the expiration of their contract. They were simply told that it would not be renewed because their performance was not at the expected standard and they were unlikely to meet the organisation’s future requirements. The person was well liked by other managers. Most colleagues were unaware of any performance issues with their work.

The manager involved also said that this was the first time they had been told they were not meeting expectations in their performance.  In discussions to prepare their annual performance plan or review their performance they had not been told that their performance was such that they may have their contract terminated.

To the watching managers, at first it seemed like a decision that had some basis in ‘business’ thinking. After all, not every appointment is the right one and mistakes have to be corrected. After four years of service this manager was now working off their last year of their contract while they looked for another position. Everyone was encouraging and supportive. After three months it started to become awkward. Do you invite them to meetings about future works or not? For those working closely with the manager, every day brought discomfort in deciding whether they should be included or not.

By six months, it was becoming unbearable for everybody. It was clear that finding another position wasn’t going to happen quickly. Not having their contract renewed hadn’t helped them. Every manager began to check their own contract expiration date and to wonder whether or not it would be renewed. The organisation didn’t have a strong performance management culture, with performance plans often completed late, if at all.   Managers started to worry about their own performance and whether they were vulnerable because of the lack of clarity around performance requirements.

The manager worked to their last day. They couldn’t afford to leave and hadn’t been offered an early departure package. Every other manager watched as they became demoralised and diminished by their fruitless job hunting. Who would be next?

In the second situation, she described a manager who just disappeared. An email just arrived saying that they were leaving on Friday arrived. No one had expected their contract not to be renewed. Again, no other managers were aware of any performance issues. As it turned out, it was almost six months before the expiration of their contract. Their contract was presumably paid out. Few, if anybody, knew why they had left.

The effect on other managers was immediate. Managers started to check their contract expiration dates. Did they know whether or not their Group Manager or the organisation was happy with their performance? Had they upset any one? Had they made any big mistakes?   The disappearance of a well liked and vocal member of the senior management team without explanation created quite a stir. Experienced and high performing managers started to wonder whether or not the organization valued their contribution.

My colleague was confident that in each case there were management reasons for the decisions not to renew contracts. Whether those reasons were clearly communicated to the managers involved is less clear.   Did they know what they were doing/not doing that senior management required? Did they have an opportunity to improve?

The bigger issue is the impact on management culture and performance. I suppose the lesson is that when the Executive decide that the performance of managers is a problem and they start to manage their performance, what is happening needs to be clear to everyone. All managers don’t need to know what the specific performance issues are with individual managers but they need to know that manager performance is under scrutiny, what the performance issues are, and what the expectations are for improvement.

In some ways, the move to offer managers three year contracts and then to not renew those contracts when the Executive are not satisfied with performance, is a form of fear transmission.  The fear and insecurity of those running the organisation is being transmitted down the line.