Was the former manager failing at the job you took? Was it just expanded so much that he didn't have the capability of doing the job? Or did everyone assume that the old guy wouldn't want more responsibility?
What your lovely company has just done is set itself up for a big age discrimination lawsuit and by golly I hope they lose. I don't say that lightly. Normally I tell people that suing will just make their lives miserable, and I admit that if the question writer was the former director, I'd tell him that suing would make his life miserable. But, secretly I hope he'd sue and nail your company's figurative heiny to the wall.
Because even if this guy was completely incompetent the company is acting like the only reason for wanting him gone is his age. Because if he was a poor performer, they would have fired him already. And by golly, if it acts like a duck and quacks like a duck the jury will conclude that it is a duck.
Now, here is what should have happened.
- Sr. Management determines that Previous Director (PD) is not capable of handling the expanded responsibilities.
- Sr. Management documents failings
- Sr. Management coaches PD on his problems and gives him the opportunity to improve
- If improvement occurs, the process is over and he moves into the new role. If there is no improvement then...
- PD is told that his last day of work will be X and that in exchange for him signing a general release he will be given a severance package according to the company standard plan.
- PD may negotiate or not. Final agreement is made.
- PD has his last day worked, signs his general release and is never heard from again OR
- PD refuses to sign, is terminated anyway, and launches a lawsuit. Company wins because they have documented evidence of poor performance.
If he was doing the previous job competently then the lowest risk the company can take is to move you to the new role and put him back in his old position. Sorry! Not the answer you wanted. But, as I said, the way this was handled reeks strongly of age discrimination. If he was not performing at the appropriate high level then everyone needs to stop beating around the bush and terminate the poor man and let him get on with his life.
His direct supervisor (I think this is you) and a witness (either HR or another equally high level manager), need to sit down and say, "PD, the nature of business and the company has changed over the years and as a result of this your employment with X Company has been terminated. Today will be your last day of work. We have put together this severance and retirement package. In order to receive the severance and/or enhanced retirement package you must sign this general release. Please take your time to look it over. We advise you to speak with an attorney prior to making a final decision."
And then you jump to step 6 above. The only change is that you're more likely to lose the lawsuit if you have just been shuffling him around rather than documenting his inability to perform. Moving him around to "force" him to resign won't result in a clean resignation where everyone can pat themselves on the back and say, "boy, look how smart we were to get rid of him without firing him!" He will still have a case for a discrimination claim and even for unemployment, as he can claim a "constructive discharge."
So, what do you do? You go to your boss and tell him that this person's poor performance needs to be documented and then he needs to be terminated--not asked to resign, not shuffled around--terminated. Then you go ahead and do that. I know it's unpleasant. It's part of being the boss. When you take a job that involves managing other people you take on the responsibility of terminating them if the need arises. If your job was created by combining two positions into one, you don't need performance issues, as it is a position elimination. (And please note, you don't actually need a reason to terminate anyone. At will employment in almost all cases. But, the way this has been set up is going to require a reason if you want to survive the law suit.)
Your manager did you no favors by handling this poorly to begin with, but it's now your problem. So, document, terminate, provide severance and require a general release. And please, please, please, get the release written by legal counsel. It is not okay to write one up yourself.