Question

After implementing efficiency-improving techniques, many companies commonly lay off hundreds or thousands of employees whose services are no longer required. And frequently, the remaining employees must perform tasks more quickly—a situation that can generate employee stress and other work-related problems. In addition, these employees may experience “survivor’s guilt” because they kept their jobs while many other of the colleagues and friends were let go.

    Discuss how to think through the ethical implications of using a new operations management technique to improve organizational performance.
    What criteria would you use to decide what kind of technique is ethical to adopt and how far to push employees to raise the level of their performance?
    How big a layoff, if any, would be acceptable? If layoffs are acceptable, what could be done to reduce their harm to employees?

Answer 1

Layoffs are not a cake-walk for any organization. It is the worst and the last decision that an organization would make to survive. Hence, it should be pre-planned with utmost care so that the laid off employees have a soft landing and the left over employees also remain guilt free and stress free.

1. Managing communications is a major part of the process of transitioning to a post layoff workplace environment. A fundamental communication after the layoff should be there to explain the employees that how the management believes this change will improve the organization. More importantly, the management should try to convince employees that the layoffs were legal, necessary, appropriate, fair and compassionate and were designed in a way so as to create a stronger organization; and all of this should be the truth.

2. The organization should let the surviving employees know about the core reasons of the layoff. They should feel safe and secure and be made aware of the job reallocations. If they dislike the new job, then they should be given personal counselling sessions and should be made to realize the benefits of the new job for them and the organization.

3. Downsizing of firms generally leads to a setback for employees' morale.They might feel lucky for not being laid off or they might also have bitterness for not getting a raise for the additional responsibilities. In such times, the performance of employees might go low. Therefore to boost their morale, following practices can be adopted:

• Tell the truth by overcommunicating.
• A perception of fairness on the restructuring decision should be ensured by survivor employees.
• Communicate the grievances of employees to the HR.
• Motivate them by setting objectives and the rewards infront of them.

4. Define the skill sets the organization wants and direct the employees to work towards it.

A layoff can be acceptable upto the extent that:

• It does not hamper the daily operations of the business. The employees that are to be laid off should be decided according to their roles and past performance reviews.
• The employees do not start revolting because if this happens, the whole layoff thing will come out to be a disaster. it will become a negative mark on the head of the organization forever.
• The company is able to reduce its cost and increase its turnover. in other words- economies of scale.

To reduce the harm to the survivor employees- As we have discussed before, we can communicate grievances, give them a raise, make them realize their importance to the organization, retrain the employees for their new roles.

To reduce the harm to laid off employees- We can give them prior notice for their retrenchment or layoff, give them linkedIn premium account subscription to help find new jobs, retrain them to enhance their skills before they seek a new job, organize employment or placement camps, offer them some kind of severance package (healthcare benefits and salary), voluntary retirement, vouching for potential employees at other organizations to help them get a new job.