In today's world of economic vacillation, businesses need to have the flexibility of hiring and firing employees at will. This may sound particularly harsh, but is a bitter pill that we all need to swallow. However, firing an employee cannot be arbitrary, inconsiderate and inhuman. The character of a company is determined not by how it treats its employees when it needs them, but by how it treats employees when it does not need them.
One comes across innumerable horror stories of companies firing employees at will, without even having the grace of intimating employees in advance about any such move. After having worked for two decades in the corporate world across India and other countries, I have come to the conclusion that employee retrenchment is usually a result of managements failure in recognizing business challenges or taking appropriate action at the right time.
If a company fires 100 employees because it has lost a major account, then there are two ways to look at the problem. The obvious way to look at it is that the company can no longer afford to keep 100 employees because it does not have enough business to support it. However, very rarely do people ask questions like 'Why did the company lose the account' or 'What could it have done to prevent this loss' or 'Who exactly is responsible for the company's failure to anticipate this loss'. But, in almost all the cases, the axe falls on the hapless employee who has had no role to play in senior level decisions. Senior managers either escape penalty or move on to greener pastures while leaving a trail of destruction behind them. At the peak of sub-prime crisis in the US, financial organizations were crashing left, right and centre. Employees at the middle and junior levels lost jobs in the thousands but senior management escaped penalties in most cases. Surprisingly, many of the people who were responsible for the crisis were given the responsibility of investigating the crisis or in recommending solutions to prevent such crises in future. No thought was spared for the innocent clerk or computer operator or teller in these banks who had virtually no role to play in the crisis itself.
Now if a certain number of employees have to be fired, then the most important task is to handle the activity in a humane and sensitive manner. Simple inexpensive steps can often go a long way in reducing the impact of such moves. For e.g.
1) Companies don't ever crash all of a sudden. If the writing is on the wall, let the employees know about the eventuality as soon as possible. Wasting too much time in informing employees actually heightens the pain for them, as it does not allow them time to plan their personal lives.
2) If the company has other subsidiaries, offices and divisions, explore opportunities for employees with requisite skills in those divisions. It makes no sense to lose employees who can be productively employed in other divisions
3) If the company is firing employees for extraneous reasons, be honest with the employee. Don't hurt the employees confidence unnecessarily by blaming him for the loss, if that is not the truth. I remember the incident about an Indian software company that once fired an employee one fine day saying that his performance was not upto the mark. Till that point, the company neither informed the employee about his lack of performance or invested enough time and resources to improve his performance. The incident would have gone unnoticed had the employee not had the presence of mind to record the exit interview and put it up on social media.
4) Pay the employee all his rightful dues without him having to run from pillar to post to claim his dues. Most companies get it wrong on this aspect as they do not see terminated employees dues as a priority. If cash flows are indeed a serious issue and the company needs time to settle dues in full, offer an installment based payment with clear assurances on settlement of dues like post dated cheques, bank guarantees or other financial instruments.
5) Offer the employees a good recommendation letter and provide a positive reference so that they can seek gainful employment elsewhere.
A little humaneness never goes waste. After all, the world is a small place and the employee you fire may become a client for you or a major supplier etc. Why burn bridges in this small world? I remember an incident from my own life wherein my management forced me to fire an employee for no obvious fault of his. While I was dead against this decision, I was forced into it. It was as much my fault, as I did not stand for what was right. The same employee ended up on the client side and it was no surprise that we did not get any business from them.
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