How Prepared Are You if Confronted With A Layoff?


		The following article was published in the Charleston Post & Courier's* Business Major, a featured monthly column in the Business Review Section on September 10, 2001.* How Prepared Are You if Confronted With A Layoff? Monday, September 10, 2001 By DOROTHY P. MOORE Special to The Post and Courier Business Major Terminating employees is one of the most difficult tasks business owners and managers have to do. This is the case in good times and even more so when business slacks off because of economic changes in the market. At best, termination interviews are stressful for all parties. At worst, the face-to-face discussions can become confrontational or even dangerous. As a result, some employers and managers try to get through the termination process as quickly and abruptly as possible. This can be a mistake for firms covered by the Equal Employment Opportunity Guidelines when the standards used to decide who gets laid off or terminated appear unfair. Ex-employees who feel unjustly treated may decide to file discrimination claims, escalating the process into a costly business operation far surpassing the cost of keeping the employees in the first place. At the annual meeting of the Academy of Management in early August, Professor Barry Goldman of the Department of Management and Policy at the University of Arizona suggested several steps employers can take to avoid the dark side of terminations. The mitigation of the negative effects begins in understanding the process people go through in arriving at final decisions to file a discrimination claim. Employees feel that firms should make decisions based on a worker's performance and that the leader's behavior should be consistent across employees. Two variables are involved. One is a perceived standard of fairness, the other the process through which decisions get made. An employee who says to himself, "I got laid off but people whose performance was clearly inferior to mine were not" perceives an unfair standard. An employee who understands that layoffs were made by seniority or accurately measured job competencies in all cases, not just his, is less likely to feel unjustly treated. If the layoff process appears unfair or inconsistent, the employee can also perceive unjust treatment. The effects compound, warns Goldman, when employees feel that the decisions to let them go were made without fair standards and then carried out through unfair procedures. The management lesson is that in terminating employees, organizations should do as much as possible to ease tensions. This begins with an open and comprehensive system for informing all employees of the reasons that make the terminations regrettable but necessary. Firms should plan before layoffs become unavoidable. Companies need training processes in place to ensure that, if the time comes, the people being let go will be treated with respect and dignity. Even better, says Goldman, employers should plan to fully inform those being terminated of all their rights, in writing. Also, before making final decisions, companies should provide employees a voice through an appeals procedure. Avoiding discrimination complaints against the firm, Goldman notes, involves an understanding that decisions made by terminated employees depend largely on ideas and information they will get from friends, family and co-workers after they have been let go. A woman who is terminated and turns to co-workers to be told "women are always fired first" or "this company never does anything right" will be reinforced in feeling she should file a claim to redress the "unjust" treatment she feels. The terminated employee whose co-workers sympathize with her and others like her, but perceive that the termination process is based on performance and clearly laid-out standards applied equitably, is less likely to get reinforcement to take action. Having fair and just standards leaves three winners: the present employees, the company and the customers. Who is most likely to file a discrimination claim? Some of the answers are surprising. To be sure, says Goldman, unpublished statistics from the Equal Employment Opportunity Commission indicates that nearly nine out of 10 charges against employers "involve either race (37.3 percent), sex (30.9 percent), or age (18.3 percent)." But contrary to the conventional wisdom, a white person may be more likely than a minority to file a discrimination claim. There are a number of practical implications from Goldman's research. The first is that, in good times - when layoffs are not even on the horizon - companies should have in place and follow procedures that ensure employees are treated equitably and fairly. This will establish an environment where, if terminations later become necessary, employees do not automatically assume that decisions will be capricious and unjust and the process unfair. When layoffs must take place, companies should treat the process as something important. They should do as much as possible to reduce tensions and anger. Three actions are particularly important. First, the firm should be as open and informative as it possibly can; facts are the best antidote to the rumor mill and grapevine inaccuracies. Second, it should take definite internal steps to reduce the fears of the retained coworkers. Third, companies need to look outward to the many public observers. Terminations affect more than an individual. They impact whole families, communities, customers and can provide competitors a special edge. To mitigate some of these tensions, companies should consider offering outplacement services, assistance and resources not only to those being terminated but also to their families. This will represent some of the dollars best spent in the transition period. For Questions/Comments about this site, contact dot.moore@comcast.net. Site designed by Jackye Cocoros.