The Layoff
Nowadays the o”layoff” is something that everyone is familiar with and everyone is worrying about. With our economy still on a decline everyday you wake up to go to work you are one of the lucky ones. So is you have to do a layoff what is best way? Do you look out for the employer or the employee? In the Harvard Business Case Study, “The Layoff” the executive committee for Astrigo Holding came up with numerous ideas such as first in, first out, rank-and-yank, last in, first out, cut a unit, or an overall pay cut. So which method is the best?
The first in, first out method seems to be a popular choose. They offer early retirement to those who have been there the longest and offer decent severance package. The problem with this is you risk the chance of being suit for age discrimination. The upside to this is someone people who are approaching retirement are already counting the days till they can retire and would be more than happy to take the layoff if they are given their retirement package.
The rank-and-yank method is probably the poorest choice. It is doing performance evaluations which we have already discovered do not work the greatest and then cutting the people withe lowest scores. The issue with this method is it turns everyone against each other, brings down morale, and in a sense gives management the room to play “favorites” with reviews. On paper this idea seems the easier, cut the lowest performing people, but in reality how do you determine the scale to rank everyone on?
The last in, first out method seems to be another common method used in today’s world. Those who were hired last are the first ones to go, meaning you have to work for your seniority. The issue with this is that you have new recruits that have fresh ideas and recent education and they are going to be the ones you left go first. What if there work performance is better than someone who has been there for 20 years and is just waiting for retirement, then you lose good employees. The upside to this is that you don’t lower morale with those who have been loyal and have seniority in a company.
Another common method is to cut a department and get rid of those who worked in that department. But once again how do you know what department to cut? What if cut a department that is doing poor in terms of revenue but has key players? The downside to this method is that you cut all knowledge of that department, meaning if you ever wanted to bring it back you would have to start from scratch. The plus to this choice is that everyone from management to everyday customer service people would get a layoff, meaning there was no favoritism over position title.
The last method and the one I like the best is the salary cut across the board. If you propose a company wide salary cut and then everyone gets to keep their jobs, then the morale stays decent and you have no hard feelings. The downfall is that those who are at the bottom of the salary range are going to feel the cut way more than those who are at the top and are probably the ones who can afford to take a cut. The plus side is that no one losing their job, you do a little team work and take one for the team but everyone comes out on top with a job.
The most important thing to remember is no matter what method you choose to do it with honor and integrity. If you do a harsh massive layoff those who are still there are going to fear for their job and eventually start looking else where even if you weren’t going to let them go and in the end your morale will be extremely low. I believe the best method is to offer the first in, first out, early retirement option to those who would like to take it and then a salary cut across the board. I hope just that this economy starts to turn fast because its awful to be stressed about finances and a job.
Jessica Plassmeyer 