Tuesday, July 15, 2008

Managing Employee Terminations

This is a followup to this post, as well as a series of tweets I read. However, I'm not dealing with any specific issue (which isn't confirmed yet anyway), but I wanted to look at the issue of employee departures in general, and cite some OTHER examples.

Whether you're dealing with a layoff or a firing, and whether you're dealing with a public figure or a figure that is not known, employer-initiated terminations of employees usually go through three stages:

  1. The employer determines that the employee must be terminated.

  2. The employer informs the employee that he/she has been terminated.

  3. The employer informs interested stakeholders that the employee has been terminated.
Perhaps I'm naive, but I believe that these three events should occur, in sequence, as quickly as possible. Make the decision, the inform the employee and interested stakeholders before rumors start to spread.

What happens if there's a long gap between step 1 and step 2? I have two examples, one drawn from an ethics question at the Online Ethics Center:

Just as Tony was finishing his task, Arnold Raskin, Vice-President of Manufacturing approached Tony.

"Tony, I know this is really bad timing, but it has to be done," Arnold began. "I've just come from an executive meeting. We have to lay off some people early next year. I'm afraid the ax has come down on your unit. By the end of January everyone will have to be laid off. We'll have to transfer you to another division. I want you to let them know as soon as possible--this afternoon."

Tony sat glumly at his desk for several minutes, pondering what to do. He thought, "If it were me, I sure wouldn't want my Christmas spoiled. Maybe I should wait until the day after Christmas to call everyone. I don't want to be a Scrooge."...

Tony decides to wait until after Christmas to inform the workers that they will be laid off. However, unknown to Tony, Arnold attends the same church as Ralph, one of the workers to be laid off....Arnold makes a special point of talking with Ralph and expressing his regret at the layoff. From the shocked look on Ralph's face, it is obvious to Arnold that Tony has said nothing to Ralph....

(Cite this page: "Informing Employees About Layoffs" Online Ethics Center for Engineering 4/1/2006 3:19:03 PM National Academy of Engineering Accessed: Tuesday, July 15, 2008 )

See the entire case, and various comments, here.

Here's another example, from a Fast Company article, indicating that you sometimes have to read tea leaves to know your own future:

Amanda did not see it coming. Her most recent performance review was strong, plus she had a great rapport with her manager, so when the year-end layoff rumors began circulating around the office, she thought she had immunity. She should have known better. She, along with the thousands who were axed, never received an invite to the Christmas party and got the worst gift of all -- a severance package.

And no, these things in dusty textbooks aren't completely made up. Here's a real story, ripped from February 3, 2007's headlines:

Hawaii Medical Center handed out formal layoff notices yesterday to about 10 percent of its work force, citing a deteriorating financial and staffing situation at its two recently purchased hospitals....

Talk of the impending layoffs had swirled this week through Hawaii Medical Center West in Ewa Beach and Hawaii Medical Center East in Liliha, but HMC officials declined to publicly acknowledge layoffs were planned until yesterday.

Boy, how would you have liked to work at those hospitals during the week in question? For whatever reason, the management delayed the notification, resulting in inconveniences for not just 10% of the workforce, but 99.5% of the workforce.

OK, so you can see that a delay in notifying the employee of his/her termination can cause problems. What about a delay between items 2 and 3 - in other words, a delay in letting everyone else know what just happened? Better yet, what if the notification to stakeholders never takes place at all?

Let me cite an example. One morning, person A told person B that layoffs were occurring that day, so person B told person C, and so forth. However, there wasn't really good information about who was being laid off. Reports were that five people were being laid off, but six names were circulating. So who were the five? Or were there six? Or four?

In a late morning meeting, an attendee mentioned the rumors of layoffs, and the supervisor of one of the six people confirmed one of the layoffs. But the other five weren't being confirmed by anybody.

Eventually it appeared that only five people were being laid off. Who knows whether the sixth person knew that he/she was a rumored person in the layoff? What if he/she would have found out inadvertently?

Management eventually sent out an email message confirming various reorganizations - but not mentioning the names of the five people who were laid off.

Now that can be a tough situation. And what benefit was there in withholding the names of the laid-off employees? It just raised more questions than anything else.

Some things to think about...

P.S. If you're interested about a particular employment situation, it has been confirmed in a Disqus comment.


"Why didn't we announce Shel's leaving? Because I don't believe in announcing people have left. Microsoft didn't announce it when I left, either...." (Scoble)

"If you were in his place would you say more publicly? I wouldn't. What goal would it serve?" (Heiny)]

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