ASK HR: Which criteria should I use to decide which employees to lay off?
During a retrenchment, the employee most likely to survive isn’t necessarily the one who comes in first in the morning or who volunteers to do everything when others won’t. PHOTO | FILE | NATION MEDIA GROUP
What you need to know:
- Make it voluntary. It is better to lose one employee who is willing to go and retain those committed to the company’s vision.
- If you retain someone who is keen to leave, he or she will eventually leave anyway, and that might happen when you need them most.
- Make prudent decisions and be at peace with the outcome you present, whether you stay or leave.
Q: I was appointed to supervise a team of sales staff last year and we have worked quite well and exceeded our targets many times. However, the company is now struggling to meet basic costs. For this, I have been asked to effect a 30 per cent pay cut on all staff and to lay off 10 colleagues. I feel so lost. I can’t think of where to start. Please advise?
Letting go of any staff, for no fault of their own, is one of the most difficult tasks for any manager. It is more excruciating when the affected workers are great at their jobs and have formed bonds that stretch beyond work.
But then, the reason you are their leader is so that you can make tough and objective decisions during times of crisis. Since the pay cut affects all staff, you need to familiarise yourself with the organisation’s guidelines.
Most companies will use a clear criteria to effect the salary reductions to ensure that it is applied across all roles, and to ensure that the process is objective and fair to all parties.
Whether this criterion exists or not, there are three points you could consider when coming up with the names to put forward for redundancy while ensuring that the team remains united.
The first will always be productivity. I know you say you have had excellent results as a team, but if you delve deeper into individual contributions over a period of time, you will see where the weakest links are. It is better to let go a poor performer and retain the strongest.
The second is to look at the business needs. Perhaps there are product lines being phased off, or a plan to outsource operations, or new business lines coming up. It is best to retain those with the transferable skills you need most.
The third is to make it voluntary. It is better to lose one employee who is willing to go and retain those committed to the company’s vision. If you retain someone who is keen to leave, he or she will eventually leave anyway, and that might happen when you need them most.
You could also consider the last-in-first-out principle, but this only serves to reduce cost. It doesn’t mean that your longest serving employees are the most productive.
Make prudent decisions and be at peace with the outcome you present, whether you stay or leave.
Mwikali Muthiani - Managing Partner, MillennialHR; @MwikaliN
