By: David A. Brookmire, President, Corporate Performance Strategies

The U.S. economy has seen tremendous change in the past three years. Virtually all companies have had to make very tough decisions with respect to cost reductions, impacting hundreds of thousands of workers. While right-sizing is not “personal,” the feelings and emotions involved in this management action are very intense and difficult for everyone involved.

The primary parties in layoffs are the individual employees (and their families) impacted by the action, the manager implementing the action, and the remaining employees or survivors of the action. We will discuss recommendations for effectively handling this difficult management action.

Planning

It is extremely important to plan effectively for the upcoming terminations in order to ensure that the employees impacted are treated with dignity and respect and that your company avoids costly employment litigation. The first step is to identify the positions that are no longer required due to the business restructuring. Once these positions are identified, individuals will need to be identified for the layoff. You need to establish the criteria for selection of these individuals and it needs to be as objective as possible. Typical criteria are length of service, performance, and skills.

Once the list of individuals is determined, there needs to be careful analysis of possible adverse impact (i.e., selecting a disproportionately higher number of one protected group) with respect to race, sex, age and other factors. There are specific federal laws that prohibit employment discrimination with respect to employment decisions (e.g., hiring, promotion, transfer, termination, etc.). These include the Civil Rights Act, Age Discrimination in Employment Act and others. Your Human Resources professional or an outside legal expert should assist you in the analysis.

Next, you should prepare for both internal and external communications. Externally, the press may pick up the story and you will need to be prepared for this with your employees. Internally, you want to have written statement and Q & A’s prepared to distribute the day of the terminations. Effective communication can prevent a downturn in morale and productivity.

You will want to have assistance identified and ready to act for those that will be impacted. Some companies fund outplacement with professional counselors and job search support. These individuals can be present during the terminations and often participate in the discussions with employees.

Finally, you need to have a master plan covering the logistics of the terminations. If you have few employees affected, this is less necessary. However, if you have several (whether 6 or 600) terminations happening concurrently, you will need to have a master plan developed so that the actions go smoothly. We recommend that you plan for individual meetings with impacted employees and not a group address. The plan must include coordinated processes to disable passwords and computer access, handle references, handle incoming phone calls, etc. Develop a checklist of items you need to collect at the termination meetings (e.g., security badges, equipment, cell phones). There is federal legislation protecting employees in mass layoff situation under the WARN Act. Consult with your HR representative or outside counsel to ensure you adhere to the procedures in the event this act is triggered by the layoff.

As the manager, you will need to realign the responsibilities of your department to be handled by fewer individuals. You may identify some activities that you no longer need to perform.

Implementation

Set up and conduct training the day before the action with the supervisors that will be providing notifications to employees. Prepare a script for the managers so that they handle the termination meeting in a professional and concise way. Many managers try to justify and defend the decision and this usually leads to problems. Use these steps in the actual termination meeting:

• set the stage as to why the company is doing the cost reductions
• explain their last day, severance, benefits, work completion
• tell them how to get their personal belongings
• provide details on the next steps for them

To handle a termination well, you must recognize and acknowledge your own feelings and deal with them. You are likely to experience a range of emotions. This is normal. Remember, this is something you would rather not be doing! If you do not deal with your emotions, you may end up trying to “help” the person and offer “false hope” of the job coming back.

The person that is terminated goes through a progression of emotions over time: shock and disbelief, anger, bargaining, depression, acceptance, hope, and finally positive activity. People normally experience each of these emotional stages.

In the actual meeting with you, the employee may express shock, denial, anger or just apathy. As a manager, there are productive ways to respond in each of these reactions. For example, if the employee is shocked (becomes very quiet, cries, etc.) you should maintain consistent posture on the decision, give them some time to accept the news before they leave your office, and close the meeting.

Do Not:

It is usually best to have terminations in the middle of the week so that employees can have access to support resources the next day. The worst day for termination is Friday.

Follow Up

After the terminations are completed and the terminated individuals are out of the facility, gather the remaining employees and discuss what just happened. Your surviving employees will naturally be wondering if and when there will be more layoffs. Their morale is very tenuous at this point. It is important for you to cover these items at a minimum:

• a new organization chart
• changes in jobs or routines
• how the separated employees were handled to show support
• let them know you appreciated the contributions of the separated employees
• discuss the rationale for the overall actions (never discuss the rationale for any individual decisions)
• advise them how this change may impact them in the future

Recovery

For the next several weeks it is important for you to be present and visible with employees in their work environment. Look for signs of apathy or low productivity. Address these symptoms immediately.

By taking these actions you will be on the road to recovery with your teams and better able to meet your business objectives.