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Layoff Secrets You Need to Know

Posted on November 9, 2010
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Layoff Secrets You Need to Know

by Maria Hanson, LiveCareer

In an ideal world, layoff decisions are made in a systematic, objective way. Review committees (or, in smaller companies, managers) look at qualities like employee performance, skill set, and tenure, as well as whether or not a position is really necessary.

But layoff decisions are not always so neat and neutral, say experts.

“Layoffs are sort of like making sausage,” says Dan Bowling, senior lecturing fellow at Duke Law School, specializing in labor and employment issues. “You don’t want to see what went into the process, even if it looks tidy at the end.”

With the recession still causing job casualties at companies large and small, knowing what goes into layoff decisions can be useful. Here are five layoff secrets you need to know, as revealed by top employment experts:

Challengers face a challenge. Employees who question the status quo can be good for a company. But do it too often, and you could be on the chopping block. “Those who challenge management generally have big targets on their backs,” says Linda Pophal, corporate communications specialist with Strategic Communications.

Grade inflation can be deflating. Even when trying to be objective, companies are often hobbled. “If you’ve ever wondered why a company kept a perceived laggard and laid off a superstar, it’s because the review committee couldn’t find a way to justify retaining the stellar, often younger employee,” says Paul Falcone, the author of “101 Tough Conversations to Have with Employees.” He says this often happens because managers engage in grade inflation during annual performance reviews. Substandard employees end up getting good scores, and this limits management’s ability to oust them when layoffs loom.

It helps to have friends in high places. “It’s the old country-club mentality, where the senior execs, along with their cronies, sit around a table selecting who gets to stay on the team based partly on friendships and alliances,” says executive coach Scott Ventrella, adjunct professor at Fordham University’s Graduate School of Business. “It’s a popularity contest, and good people often get chopped.”

High salaries are high on the list. “During difficult financial times, the first thing that happens is ””> accountants come in and look at the books. The highest salaries in large public companies typically get cut first,” says Elizabeth Lions, the author of “Recession Proof Yourself.” “They don’t look at work performance.”

Little things mean a lot. All else being pretty equal, layoff decisions can end up being based on really oddball details. “Everyone’s on the razor’s edge these days,” says Frances Cole Jones, the author of “The Wow Factor.” “There are no insignificant actions.” She recalls a layoff decision coming down to the employee who was known for leaving dirty dishes in the sink in the common kitchen. And Brad Ellis, of recruiting firm Kaye Bassman International, says he has seen a close decision come down to the food an employee cooked and ate, which some considered “smelly or offensive.”


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