When Layoffs Are Necessary Essay

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Reduction in Force

The author of this report will be offering some words and answers as they pertain to the laying off of employees. This is otherwise known as a reduction in force. Questions that will be answered will include three ways that a manager can cope with negative emotions, a step-by-step process for conducting dismissal meetings, determining of compensation for those that are being let go and three predictions that the layoff may affect the company over the short and long terms. While a reduction in force can be a painful and messy thing to do, it is often something that is absolutely necessary and thus must be completed in a complete and professional manner.

As noted in the introduction, being on either side of a layoff at a company can be traumatic and hard to do. Indeed, it can be hard to be the person being laid off as well as being a person that is involved in doing the same to the employees that are with the company. Three ways in which a manager can cope with the layoffs and the processes involved would include the following. First, the layoffs are necessary because the future and ongoing success of the company are at stake. Sure, it would be fabulous and great if the people on staff could be kept. However, the people in question cannot be kept on as workers if the dollars and cents do not allow for it. Second, there is a chance that the employees can be brought back (at least some of them) if the company recovers. Third, the people that are laid off will be able to find new work with another company. It is not as if their life is over and that they have no other options when it comes to their career. Indeed, the vast majority of them, if not all of them, will be just fine in time (Noronha & D'Cruz, 2006).

With the above, it has be kept in mind that there must be a solid and complete communication plan for the people that shall remain with the company. Leaving an information vacuum during such a time is a very bad idea and that vacuum needs to be filled. In particular, workers that stand to be retained but do not know it may decide that they are next to be laid off (or they refuse to be one of the next possible ones to go) and they will move on to different endeavors as a proactive move (Cotter & Fouad, 2013). To be sure, workers cannot and should not be told every little detail about the layoffs and what is going on. However, they do deserve to know whether they will retained, what the true long-term prospects are for the company and what the overall plans happen to be. Speaking of plans, there has to be a strategic plan that maps out what will be done, who will be in charge of advancing that plan and so forth. In short, there needs to be a summary of what is being done to regroup and minimize the damage and what shall be done to move forward and hopefully recover over time. For example, if the financial strains in question are due to a recession, the general strategy used will probably be about getting the employee headcount to a level that manages the existing business and helps weather the storm until the business comes back. This would especially be true with a company that sells a service or product that is widely discretionary and is thus one of the first things to go when a recession or other economic calamity hits. For example, a company that sells big screen televisions is going to take a hit during a recession as big discretionary purchase are obviously kept to a minimum when a family is struggling or there is any fear of someone in the family losing their job (Vukovic, Juric & Ojdenic, 2014).

As for those that will be dismissed, there needs to be a plan in place for that as such meetings can go very well or they can go very poorly. First of all, there needs to be a setting up of a meeting that will be the revelation to the employee that they are being let go. Security will need to be made aware that this meeting is taking place, when it is taking place and so forth. Other details that would matter is where the person's cubicle or office is located and whether the employee has had any behavioral issues in the past. Of course, most employees will accept what is happening and leave in an orderly fashion.

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However, some employees react very poorly when it comes to strain and stress. As such, security should be on standby just in case something goes awry. Security should not brusquely escort people to their desk and then out of the building. However, they should be watchful of what the employee does as they engage in the business of gathering their things and leaving the building. Any laptops or other high-cost items should be remove from the person's workspace while the meeting is going on. This is a proactive move just in case the employee is wanting to steal or vandalize their equipment (Fortune, 1987).

Anyhow, the meeting should take place and the discussion will obviously include why the layoff is occurring, when it is effect and what sort of severance package will be included as part of the dismissal. The author of this report was asked to draft a severance plan for a fictitious company and the author has done precisely that. The length of the severance as drawn up by the author of this report shall be based on the time that the person has been with the company. For those that have been with the company for five years or less, the employee will get twelve weeks of severance payments at their normal salary level or amount of hourly pay. For those between six and ten years, that amount will be bumped up to fifteen weeks. For those that have been with the company between ten and fifteen years, the amount of weeks will be twenty-eight. Finally, any one with the company more than fifteen years will get thirty-four weeks of severance payments. As is probably already clear, people that have been with the company longer will receive more payments and there is a significant rise in benefit for those with the company a decade or more (Brown, 2015). A chart of how the severance pans out based on years of service can be seen below:

Even for those that are not let go, the layoff will obviously affected them as well. One way in which this manifest is that the remaining employees may wonder if they are the next to go. As such, the odds that they themselves will seek other jobs and proactively avoid being the next to be laid off (even if that is not actually the case) is much higher. Second, there will be emotional distress about the fact that the headcount has decreased and that perhaps the workload has increased. While the employer is trying to pick up the pieces and regroup and may absolutely be willing to reward employees who buckle down and do what is needed for the company, there may be employees that do not take kindly to this extra stress and workload. However, many employees will adjust well and will feel that it is the right thing to do to exert the extra effort and that they will be rewarded if they show loyalty to the company. A huge part of which way an employee sways when it comes to this is what is said to the employee by the managers and leaders that remain. If there is a recognition that staying loyal and productive in the face of uncertainty and layoffs will lead to reward, the employees that remain are more likely to respond well. That being said, the employee should not be given promises that cannot or will not be kept. Indeed, the employer should be honest about everything they can be including whether there will be more layoffs and who is subject to be part of the same, if that is known. Finally, there is the direct costs involved when it comes to the way layoffs affect the company. Sure, paying severance packages has a price attached to it because those employees are basically being paid to go away and they are not working during the time they are receiving their normal salary. Even so, severance packages are often accepted with the understanding that no future claims or lawsuits will be brought against the company. This does not protect the company against most discrimination lawsuits (e.g. ADEA claims, etc.) but it does close the book on how much more money will be paid to the employee in all other regards (Brown, 2015).

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