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The word that comes to mind is 'diplomacy' but I don't believe that is quite it. It is a practice that's seems more nuanced in Asian cultures than Western. For instance, if a person is fired, rather of publicly stating the individual was fired, the person is allowed to say they wish to pursue other interests or something less harsh. It's a bit of an unwritten and unstated custom that allows the a person in a more superior social role to allow the other individual to basically save face.

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4 Answers 4

Tact ("the ability to deal with embarrassing situation carefully and without doing or saying anything that will annoy or upset other people") may be used. Also discretion ("the quality of being discreet or circumspect") and finesse ("skill in handling of a situation").

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+1 for discretion, also defined as 1.The quality of behaving or speaking in such a way as to avoid causing offense or revealing private information. –  JLG May 3 '12 at 15:01

This is called a courtesy: a general allowance despite the facts

In your example the person is being given a courtesy by being allowed to resign rather than being fired.

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You've selected the wrong meaning, sense 2a, from your link. The example phrase for 2a is: "hills called mountains by courtesy only". It illustrates an irrelevant sense. But 2b is more applicable. –  jwpat7 May 4 '12 at 7:25
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@jwpat7, Hmmm, I'll agree that the example doesn't quite fit the sense we are discussing. BUT, the definition fits quite nicely- an allowance despite the facts. So, despite the fact that we are well within our rights to fire you, we will grant you an allowance and give you the opportunity to step down gracefully. With respect to definition 2b which has been summarized as a gift or privilege I consider this sense to apply in situations like, "The hotel provides a courtesy shuttle to the airport" or "Lunch has been provided courtesy of jwpat7." –  Jim May 4 '12 at 13:18

In a general sense, what we use in such a situation would be a euphemism. To say something less straight-forward and harsh (harsh on oneself or on others), we use a euphemism.

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Euphemisms are a softening of words (classic example: passed away in lieu of died), but I think the O.P. was asking more for a softening of actions, so to speak. –  J.R. May 3 '12 at 15:31
    
Saying "something less harsh" (OP) and "softening" (@J.R.) do agree! :-) –  Kris May 3 '12 at 15:54
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Being given the opportunity to resign instead of being fired isn't a euphemism - even if it does allow someone to "say" something less harsh. I interpreted "say" in the O.P.'s question as meaning "to allow to couch a certain way in a public setting, so as to save face" more than "to phrase in a particular manner, so as to not shock or offend." If I'm right, euphamism wouldn't work very well, but, I'll admit, it's a bit unclear whether the O.P. is merely talking about the gentle wording, or maybe about the "diplomacy" (OP) used as motivation to conjure a euphamism at all. –  J.R. May 3 '12 at 16:17
    
@J.R. You're completely off the mark. Please read the question again. –  Kris May 3 '12 at 16:25
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Kris, you're completely off the mark. Please read my comment again. –  J.R. May 3 '12 at 16:53

Wikipedia cites "influential Chinese authors" on the subject of face. One, Lin Yutang, is quoted on the practice of granting: "grant face; give (someone) a chance to regain lost honor." A guide for non-natives doing business in China reads: "Directly rejecting a request may cause considerable face-loss since it signals that the person receiving the request is not granting face to the person making the request. Chinese face-saving practices allow all members of a social interaction to preserve dignity and to avoid embarrassment."

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